Just one inch of flood water can generate tens of thousands of dollars in property damage. Homeowners trying to move and start over after such a disaster may find a surprise buyer for their homes: the government.
The Federal Emergency Management Agency, or FEMA, has spent about $4 billion to help buy out about 45,000 to 50,000 damaged homes since 1989, according to A. R. Siders, director of the Center for Climate Change Science and Policy at the University of Delaware, who analyzed FEMA data. In 2019.
The floods affected these homes to the point that the homeowners decided to move away. To encourage homeowners not to sell to new buyers and stop what Sider calls “the terrible game of hot potato,” FEMA’s Hazard Mitigation Grant program supports local and state governments in buying up homes, demolishing them, and converting the properties to public land, in what are called operations Acquisition in floodplains.
'I have no regrets'
Andrea Jones has accepted the purchase of her home in the Charlotte, North Carolina area.
CNBC
Andrea Jones, 59, sold her home in the Charlotte, North Carolina, area in a floodplain purchase. Jones, who works in the wealth and investments department of a bank, bought her home in 2006 for $135,000. Her home was appraised in 2022 for $325,000.
Jones said her house never flooded, but her street did.
“In three years of being home, it was the first time I'd ever had torrential flooding. It arrived in my mailbox,” Jones said. “You couldn't see the street. You couldn't see the beginning of my driveway.”
The commute to her home, which wasn't in a flood zone when she bought it but was later converted, made her anxious.
“Sometimes when I'm at work and it's raining really hard I wonder, 'Will I be able to get home? Will I be able to get home? Will I make it? Should I park on the street?' She said. “It didn't happen very often. But when it did, it was scary.”
The photo on the left shows the former home of Andrea Jones before it was torn down after a purchase in the floodplain. The image on the right is what the Earth looks like now.
Courtesy: Andrea Jones
Jones allocated the proceeds from the sale to buy a new home, which she said was more beautiful, for $437,000. Jones said that since the house has become more expensive and interest rates are higher, her monthly mortgage is twice what it used to be.
Her new home is located outside the floodplain and about a 10-minute drive from her former neighborhood.
“I miss the neighborhood, and I miss my friends,” she said. “I miss seeing people walking their dogs, standing, talking to them, having conversations…things like that.”
However, she said she feels more comfortable and has peace of mind living in her new home because she doesn't have to worry about street flooding.
“I will not go back. I do not regret making the decision I made,” she said.
How floodplain acquisitions work
Floodplain acquisitions help the homeowner stay out of harm's way and may help the community by creating open space and/or an area that can collect floodwater to protect other homes in the area.
For FEMA floodplain acquisitions conducted under the Hazard Mitigation Grant Program, 75% of acquisition funding is provided by the federal government, with the remaining 25% coming from state, local and community funds. In some cases, the bipartisan Infrastructure Act of 2021 could cover 90% of acquisitions with federal funds.
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However, experts say that acquisitions as a strategy can be controversial.
“It's a bit of a mixed bag,” said Matthew Sanders, chief U.S. conservation officer at the Pew Charitable Trusts. “I think in some cases they succeed and in some cases they don't.”
Some communities may be wary of taking on the responsibility of land ownership, Sanders said. “There is a legal liability associated with owning property in general, so it ends up, in some cases, being a fairly significant drain on local resources,” he said.
The Congressional Research Service found that without full participation, floodplain buyouts can also lead to problems such as blight, community fragmentation, difficulty with municipal services, and the inability to restore floodplains to be able to properly absorb water.
For homeowners, it may be a 'long wait'
Of course, a buyout can be a huge advantage for someone who doesn't want to live in a floodplain but may not have the resources to leave their home.
However, acquisitions can take a long time. On average, federal acquisitions can take two to five years, although 80% of FEMA acquisitions are approved in less than two years.
“That's a long time to wait if your house is full of mud and you're trying to figure out whether or not you want to rebuild,” said Siders, of the Center for Climate Change Science and Policy.
Jones' purchase was delayed due to the pandemic, but once the process began again in May 2022, things moved quickly. She purchased her new home in January 2023.
How long an acquisition takes often depends on the program that is financing the acquisition. In addition to FEMA, the U.S. Department of Housing and Urban Development and several states and local communities fund floodplain acquisitions.
And all of this is happening at a time when the United States is facing a housing shortage of at least 7.2 million homes, according to Realtor.com.
“We're talking about a housing affordability crisis across the country, coupled with a crisis of climate change impacts. How can we ensure our residents' needs are met while making sure they're not in harm's way?” asked Carlos Martin, director of the Redesigning Futures Program at Harvard University's Joint Center for Housing Studies.
Watch the video to learn more about how floodplain buyouts work and whether the United States should continue to invest in buying and tearing down homes facing flooding.
