American homes like this one.

Some homeowners in floodplains may voluntarily

sell their doomed properties to the

government.

Since 1989, FEMA has funded something on the order of 45

to 50,000 home buyouts.

Fema is estimated to have spent somewhere around $4

billion on the project so far.

But that's just a fraction of the total amount spent on

buyouts. Since there are programs outside of FEMA,

but not everyone is convinced buyouts are a good

idea.

It's a bit of a mixed bag.

I think in some cases they're successful, and in

some cases they're not.

Any person that is moved out of harm's way is a positive

move forward, provided that they're given appropriate

resources to move and to start their lives anew

somewhere else.

Because there's so much variation, sometimes buyouts

are heartbreaking and sometimes they're a

celebration.

Kinda tugs at my heart a little bit.

I was there for 17 years.

I'm like, they're going to tear this house that I was

living in down.

I miss the neighborhood, but I'm happy in this

location. It's not in a flood zone.

Buying up homes and demolishing them seems

pretty counterintuitive to solving the housing crisis.

The US is still short, up to 7.2 million homes.

We're talking about a crisis of affordability in housing

across the country, combined with the crisis of

the climate change effects, how do we ensure that we

provide for our population while making sure that

they're not in harm's way?

So do floodplain buyouts help or hurt American

homeowners, and can the US afford to bail out

communities?

The general way that floodplain buyouts work is

that a disaster occurs.

There's damage done to people's homes, the

community, the local government.

They decide that it might make sense to offer buyouts

to residents in those damaged areas.

Most often, the local government and the state

then request funding from the federal government.

They receive the funding.

They make an offer to purchase a home from someone

who has a damaged home.

That homeowner decides whether or not to sell.

If they sell, they relocate somewhere else.

The government owns the property, they demolish the

home and create open space, and there are almost

infinite variations at every single one of those

stages I just described.

But that's the really general process.

These homes are often located in the floodplain,

or in an area that is deemed likely to flood.

One of the most successful buyout programs has been in

The area near Charlotte, North Carolina,

where there's almost 20,000 acres of floodplain.

Over 475 homes have been purchased since 1999,

relocating over 785 families and businesses

outside of the floodplain.

My name is Andrea Jones.

I'm 59 years old and I work for a bank, so I've been in

the banking industry for 36 years now, and I moved here

to start that job and I stayed, didn't have a reason

to to move back to South Carolina until now.

I moved with the buyout program in May of 2023.

So ten months now, 11 months now, I do consider

myself a member of the Charlotte-Mecklenburg

community because I still work there, and that's where

I do the majority of my shopping.

My doctors are still there.

Um, I didn't move any of that because I'm not that

far away. So I am still a member of the community.

I just don't live there anymore.

The county says $90.5 million have been invested

from federal, state, local and other sources and claims

it has avoided $40.9 million in losses.

Some of the largest programs that support

floodplain buyouts are FEMA's Hazard Mitigation

Grant and three programs from the US Department of

Housing and Urban Development, or HUD.

They all come with different requirements and different

provisions.

For example, from FEMA, the flood buyouts tend to occur

for severe repetitive loss properties.

So places that have gone through several floods.

For HUD for example, if a state chooses after a

disaster to use its funds to allow for buyouts, then

those homes that went through the flood are

eligible.

On average, federal buyouts can take 2 to 5 years,

though 80% of FEMA acquisitions are approved in

less than two years.

And that's a long time to wait. If your home has mud

in it and you're trying to figure out whether to

rebuild or not.

And it usually is predicated on which program is funding

the buyout.

Some buyouts have happened in as little as 3 or 4

months, especially when the funding comes from the state

or local level instead of the federal.

It was a letter sent through the mail, and it was sent to

all of the homeowners on the street.

Within three years of me being in the house was the

first time I experienced the heavy flooding.

It came up to my mailbox.

You could not see the street.

You could not see the beginning of my driveway.

A couple of years later, the street flooded again

because of the pandemic.

Finally got everything completed in December of

2022, um signed my contract for them to purchase my

house in January of 2023, and then we had to start the

appraisal process.

Once they did the appraisal, I did a second

appraisal. They allow you to get your own.

The one thing I didn't like about that was my appraisal

had to include the flood zone.

And I thought because my house was not in a flood

zone when I purchased it, that I didn't have to do

that. But they said, yes, I do.

Once I found a home, the process was easy.

I told them when I could move and we scheduled the

closing. So the home that I was in, we closed on the

Thursday and then I closed on this home the very next

day.

Andrea said some of her neighbors took the buyout,

but others didn't, especially those who didn't

have a mortgage.

The estimates of homes in the United States who are at

risk of being flooded ranges from somewhere to

between 4 and 41 million by 2100.

That's a big margin of error. But regardless, if

we've spent the last 30 years buying out 45 to

50,000 homes, and in the next 80 years we need to do

4 million, we're nowhere near the scale that would be

required.

The FEMA grants are funded through a cost share, where

the federal government provides 75% of the money,

and the remaining 25% comes from a different agency, the

state or local government, or the homeowner.

In some instances, the 2021 bipartisan infrastructure

law can cover 90% of the buyout with federal funds.

The non-federal funds are generated straight from the

tax revenue or,

Income tax revenue. Sometimes they're coming

from a sales tax.

There's a couple communities who put in a

sales tax specifically for this issue.

Sometimes it's a bond measure, sometimes it's

volunteering, volunteering the fire department's time,

for example, to demolish some of these bought out

homes or it's other voluntary donations in kind

of time or services or others that are meeting

those requirements.

Some communities may not have the funds to support

their part of a plan like this, and worry the buyouts

could chip away at their already stretched taxbase.

Downe Township's mayor says without its bayside

sections, the rural communities already small

tax base, would be decimated.

We're not going have any ratables or revenue left,

and I don't see anything else except bankruptcy.

We're a hurting community in terms of we are built out.

We're two square miles, and every home we knock down, we

lose the tax revenues and there's nothing to replace

it. Individual homeowners may also be concerned about

how much money they'll be able to make in the sale.

The water was up to here.

The idea is that the government will buy the home

for the same value that someone could have sold

their home on the private market for a private sale,

But that doesn't mean every homeowner will be happy with

their buyout offer.

Right now. The way the market is, it wouldn't be,

you know, it wouldn't be to our advantage.

How much would you lose?

At least $100,000.

It's not just our home, it's our entire life.

It's everything that we've worked for and built up to

this point that we're gambling with.

Typically going to run into a situation in which the

value of the buyout offer is not going to match what

it's reasonably going to cost for the recipient to

relocate to a higher, drier, safer location

outside of the floodplain.

That could be because the average cost of a house in

the US has jumped 3.5% from 2022 to 2023.

The house originally sold for $135,000.

That was back in 2006.

The, uh appraised value was 325,000.

So we paid off my the remainder of my mortgage.

The new home was 437,000.

Obviously, um, values, home values gone up.

Um, I did buy a nicer home than what I was in.

If I'm going to move, I need to get what I want.

This house is three bedrooms, two baths as well,

but there's also a half bath.

Even though I put a good bit of money down on this

house, my mortgage still doubled.

I had a 3.62 mortgage interest rate.

Um, it went up more than two points.

I have a 5.99% interest rate now.

And then the amount of the house, it was $206,000 for

the mortgage, whereas when I originally bought the

other house was 135.

The actual execution of the buyout work is done by the

state or local government.

And so those local governments can make lots of

decisions that are appropriate for their

context. How many homes they want to make offers to,

how much additional assistance they want to make

to help people relocate afterwards, how they use the

land after it's purchased, and on and on.

Larger buyout programs can offer additional incentives

for the homeowner. For example, the Blue Acres

program in new Jersey is able to negotiate lower

mortgage rates for buyout recipients when they look to

relocate. If a homeowner still holds a mortgage, the

balance will be paid off to the bank directly.

The land is then deeded to the local government with

restrictions on how it can be used.

You can't go in and redevelop. There's a few

very, very small exceptions, like if you made

a community garden or a park, you can put a

restroom, but that's basically it.

That's that's the level of reconstruction you could do.

Ideally, the land is maintained as some sort of

public benefit, like a park or a swale, which is a

depression in the land that can collect flood waters to

protect the other homes in the neighborhood.

Some municipalities even create wildlife corridors.

Others won't have the funds to maintain or transform the

land, and it simply remains a vacant lot.

I drove by and took a picture of the empty lot.

There's legal liability associated with owning

property generally, and so it ends up in some cases,

being a fairly significant drain on local resources.

That's why oftentimes, you know, localities are not all

that keen on buyout activities because they end

up with a burden.

Not all homeowners in the floodplain are eligible for