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Sluggish U.S. flood buyback programs, rising waters, threaten homeowners

U.S. needs better policy for flood zones, says NRDC report, or risks “cycle of flood-rebuild-repeat”

Rising brown floodwaters engulf a pair of white, two-story single-family homes
Flooded Houston-area homes in the aftermath of Hurricane Harvey in 2017. The federal government has allocated millions of dollars to buyback flooded homes.
Xinhua News Agency via Getty Images

After a hurricane or flood, the federal government offers a helping hand to homeowners, offering relief funds to relocate or rebuild. But a new report found that Americans with flood-damaged homes wait an average of five years for federal buyout assistance, a delay that can lead to risky, costly rebuilding in flood-prone areas as rising sea levels and more severe storms push more people to relocate further inland.

Going Under: Long Wait Times for Post-Flood Buyouts Leave Homeowners Underwater, a report released earlier this week compiled by the National Resources Defense Council (NRDC), examined three decades of buyout and funding data from the Federal Emergency Management Agency (FEMA). The report describes a program with promise that’s been hampered by delays; nearly 200 properties approved for buybacks more than five years ago were still awaiting official closure.

But the bigger problem, according to the report, is that the delay in buyout assistance often causes homeowners to lean towards rebuilding, due to the guarantees backed into the National Flood Insurance Program, or even sell to an investor or speculator for a loss. The investor then flips the property to the next unsuspecting owner or renter, prolonging the problem.

As NRDC interim president Mitchell Bernard writes, the “cycle of flood-rebuild-repeat must end.”

Our current costly system of flood response

Along with the National Flood Insurance Program and Community Development Block Grants from HUD, buybacks form part of a multi-billion dollar federal relief system for storms and flooding that is being reevaluated in the age of climate change. A number of proposals before Congress currently seek to reform how this system works after a decade of increased hurricane activity and record midwestern flooding has underscored the system’s vulnerabilities and challenges.

Especially in light of climate change, an orderly buyback system is crucial to help homeowners, conserve resources, and even build more resiliency into our nation’s coastal areas, the NRDC report argues. Three parallel shifts—warming seas providing hurricanes with more power, warming air holding more moisture, and rising seas making waterfront property more vulnerable to storm surges—are increasingly threatening the nation’s coastal real estate.

Underwater: Rising Seas, Chronic Floods, and the Implications for U.S. Coastal Real Estate, a 2018 report by the Union of Concerned Scientists, predicted that by 2045, these forces may cause $135 billion in property damage and force 280,000 Americans to adapt or relocate.

NRDC notes that by the end of the 21st century, “13 million people in the United States will see their homes affected by sea-level rise.”

“As seas rise and floods grow more common, a buyout must become one of the first options available to owners of increasingly vulnerable homes, not one of the last and least accessible options,” write Anna Weber and Rob Moore, authors of the new NRDC report. “For this to happen, we need a more efficient, equitable, predictable, and timely way of facilitating buyouts.”

FEMA has funded thousands of home buybacks since it began the program in the late ‘80s, including programs in New Jersey and along the Mississippi River, as well as hundreds of millions of dollars allocated to buy back homes in the Houston area impacted by Hurricane Harvey. The homes are then demolished and often turned back into natural wetlands or coastal landscapes that help absorb water and make coastal areas more resilient to storms. Buyback delays explored in the report have blunted the program’s effectiveness.

Americans who have gone through the flood relief system, like New Jersey residents who suffered the long-term effects of Superstorm Sandy, know that delays in relief add extra housing expenses. This is especially damaging to low-income coastal residents, who often don’t have the resources to wait on a multiyear buyback process.

How to help homeowners

While acknowledging that the program has numerous interconnected challenges, including larger land planning issues and environmental justice concerns, NRDC suggests a few steps be taken immediately to expedite buyouts.

First, FEMA should pre-approve and guarantee buyouts as a benefit of a home insurance policy, so a transaction can take place quickly after a storm. In addition, new funds for flood mitigation—the new Community Development Block Grant Mitigation (CDBG-MIT) program—should be approved to use for buybacks. In addition, coastal states should also examine how they can streamline processes and create their own parallel programs for homeowners.

“These changes would go a long way toward making buyouts more timely and better aligning the nation’s flood response assistance with the rising challenges we face,” Mitchell writes. “As a matter of environmental justice and a matter of prudent planning, an effective program for buying out damaged properties in flood-prone areas is an essential part of making our communities more resilient in the face of the changes to come.”