Buyout Benefits: Retreating from U.S. Climate Risk Zones

John Holdren, who was President Barack Obama’s science advisor, has contended that when it comes to climate change, we basically have three responses: “mitigation, adaptation and suffering,” with a combination of them offering the way forward. Within adaptation, three choices also exist: adapt, prepare or retreat.

But in the United States, what constitutes retreat? Or, as a friend of mine at the Federal Emergency Management Association, reflecting his military background, prefers to term it: “retrograde” or “retrograde in force.” Another way to put it is by using the Department of Housing and Urban Development’s favored term, “buyouts.”

HUD, arguably, is the biggest retreater. Its Community Development Block Grant (CDBG) program, FEMA’s Hazard Mitigation Grant program, as well as various state and local government programs that match FEMA-funded efforts, have paid for buyouts in climate risk zones across the country. The state of New York, for instance, has used CDBG-Disaster Recovery program funds to purchase 1,277 homes in its New York Rising program since 2015, while New York City acquired 120 homes in its Build it Back Program after Hurricane Sandy. 

Federal rules require a buyout to be the acquisition of real property—residential, commercial, agricultural or vacation—and it must be removed and follow subsequent land use and deed restrictions that require the land be for non-structure use. Generally, buyouts are valued at the pre-disaster price and are available for properties located in a flood plain or disaster risk-reduction areas defined in a post-disaster action plan.

As for buyout benefits, there are several reasons why they may tempt citizens, including:

• Move people and their homes out of harm’s way, minimizing repetitive loss of property.
• Restore the natural sponge function of a flood plain.
• Provide additional green space and coastal or rivers-edge buffers. 
• Offer long-term cost savings to a municipality by decreasing disaster and damage-recovery fund demands.

However, recovery programs face challenges. In many instances, there isn't enough public or political will to support a buyout program. As Pete Plastrik, vice president at Innovation Network for Communities, notes in his coauthored report, Can it Happen Here? Improving the Prospect of Managed Retreat by U.S. Cities, leaders “can foresee that considering retreat would produce substantial political, financial and emotional pain locally—an array of immediate and intimidating difficulties with little gain in the short run.”

Plus, since the programs are generally voluntary instead of being about taking property by eminent domain, low participation can result in a checkerboard of houses with some neighbors taking the buyout and others staying put. The results include decreased cost savings, the loss of any infrastructure buffer and opportunities to avoid repetitive losses. In addition, tax base implications can arise if residents move outside of the local government area and bought-out residents struggle to fund replacement housing at a price that matches their buyout proceeds. Of course, the social impacts, both on those who move away from their community and those who stay, are real and quantifiable.

As the number of buyouts grows over time, paid for with U.S. taxpayer dollars and forever impacting affected households and communities, important questions should be addressed:

• What are clear and replicable guidelines and policies for appraising home values that protect both tax payers and homeowners?
• How can we ensure those who move do not resettle in places that face future risks – which would mean potentially repeated future buyouts, especially since coastal families might choose to find homes with familiar coastal assets?
• Since lower-income housing, including public housing and mobile homes, have historically been developed in flood plains, how can these residents be accommodated in dignified affordable homes out of harm’s way?

These are serious questions to ponder—and they will not recede anytime soon.

Image credit: Jim Gade/Unsplash