Managed Retreat Toolkit
Introduction to Voluntary BuyoutsSee footnote 1
When thinking about managed retreat, “voluntary” property buyouts — where people choose to accept a buyout offer — are often the first adaptation tool that comes to mind (compared to eminent domain or "involuntary" buyouts and acquisitions). While buyouts are a valuable tool to acquire properties in vulnerable coastal areas and remove existing structures, they should be coupled with other tools discussed in this toolkit to prohibit, regulate, and discourage future development or redevelopment as part of a comprehensive retreat strategy.
MostSee footnote 2 state and local governments use the terms "buyout" and "acquisition" interchangeably to describe the set of actions whereby a government generally: purchases a property from a willing seller, demolishes existing structures on the property, and prohibits future development (i.e., through deed restrictions or a conservation easement) and allows the property to naturally revert to open space (or be restored to specific environmental conditions depending on varying degrees of human intervention) in perpetuity; post-buyout, property ownership can vary among different entities including the government (federal, state, or local) or nonprofit conservation or land trust organizations. Properties purchased through buyouts are generally acquired for hazard mitigation and passive recreational purposes and will already be developed (compared to open space acquisitions of undeveloped property with a high conservation value). For purposes of clarity in this toolkit, “buyouts” will be used distinctly to only describe the former compared to “open space acquisitions.” Buyout programs can be administered at the state (e.g., New Jersey Blue Acres Program) or local levels (e.g., Charlotte-Mecklenburg County, North Carolina, City of Austin and Harris County, Texas, New York City, New York).
|Credit: Sandy Urgo, The Land Conservancy of New Jersey.
In regards to scale, buyouts can proceed on a parcel-by-parcel basis or more comprehensively either within a defined area (e.g., a neighborhood), or, where an entire community is relocated (e.g., Isle de Jean Charles, Louisiana). While the latter community-level relocations are an emerging concept in response to climate change and sea-level rise,See footnote 3 and likely to be rare in the foreseeable future, it may become increasingly common for governments to move beyond individual, standalone buyouts and evaluate the need for larger-scale buyouts in a jurisdiction’s most vulnerable coastal areas. Specifically, as the threats of sea-level rise, flooding, and erosion become more widespread over time, an increasing number of people, from residential homeowners to landlords and tenants, to commercial business owners, will have to weigh the costs of “staying in place” against the benefits of relocating to higher ground. Where enough consensus from residents can be generated, state and local governments can seek to work through community-based and -driven processes to facilitate larger areas for buyouts, whether the buyouts occur all-at-once or through a phased approach (e.g., to align with funding availability or when set regulatory requirements are triggered, such as like minimum beach width, are triggered). Larger bought-out areas can maximize the benefits that buyouts can offer, including flood reduction through the greater conversion of open space and minimized or eliminated government costs for providing services (e.g., emergency, infrastructure development and repair) to remaining hold-out residents.
Buyouts in a Managed Retreat Context
Historically, buyouts in the U.S. have predominantly occurred post-disaster in riverine floodplain communities, particularly in the Midwest.See footnote 4 Moreover, buyouts have not traditionally been implemented as a part of proactive efforts to prepare for climate impacts, but are more often reactive responses to extreme storms or flooding events.See footnote 5 Riverine examples of state and local buyout programs, like those featured in this toolkit, can provide a longer-term lens and lessons learned to avoid “reinventing the wheel” for coastal decisionmakers increasingly encountering similar questions in response to climate change.See footnote 6
Regardless, the large cost of coastal development and its force as an economic driver can pose political and funding hurdles that are likely to be magnified in a coastal context. The high value of coastal properties and potential reductions in local tax bases can act as barriers for governments considering buying out homes even if they will result in post-disaster benefits and reduce risk. This latter barrier is especially challenging for local governments in states like Alaska, Florida, and New Hampshire where property taxes are a primary form of government revenues. Regardless, as sea levels rise and coastal impacts become more pronounced, real estate and insurance markets may begin to factor in increasing risks of flooding that affect property values in high-risk areas ahead of government action. Some communities have successfully mitigated the negative financial consequences of buyouts by: encouraging and facilitating relocation within the same jurisdiction (e.g., Lumberton, North Carolina, Minot, North Dakota); using buyouts to generate overall cost savings by phasing-out infrastructure and services (e.g., Charlotte-Mecklenburg County, North Carolina, Oakwood Beach, Staten Island, New York, Woodbridge, New Jersey); generating additional tax revenues by incorporating trails and other recreational amenities on bought-out properties for nearby homes (e..g, Charlotte-Mecklenburg County, North Carolina, Harris County, Texas, Woodbridge, New Jersey); and generating new sources of revenue from bought-out properties (e.g., leasebacks in Charlotte-Mecklenburg County, North Carolina and Wyoming County, West Virginia). State and local coastal governments could learn from these and other examples to support potential buyout strategies that can act in advance of disasters, increasing climate impacts, and negative-trending market forces and result in long-term economic, community, and environmental benefits.
Policy Tradeoffs of Voluntary Buyouts
- From educating and engaging communities about buyouts to the active restoration and maintenance of bought-out land, buyout programs necessitate a long-term commitment of resources and diversified support staff that can contribute important expertise (e.g., grants management, real estate, economics/benefit-cost analysis, floodplain and natural resources management, community development) and play a variety of different roles to help governments and communities navigate complex and often long buyouts processes. Staff may also require regular training and/or new staff could be hired to address emerging needs.
- Governments without an existing buyout program will have to develop one, which can require new investments in staff, the identification of new funding resources, and that agencies navigate potential political and community concerns around buyouts (e.g., potential loss of property tax revenue, a perception that managed retreat could negatively impact community cohesion or character).
- Federal funding opportunities may only be available in a disaster context that can disincentivize or inhibit pre-disaster buyouts. While there are examples of buyout programs with state and local funding sources, more sources are needed to implement buyouts at a pace and on a scale unique to sea-level rise and other gradual or chronic coastal threats.
- High-valued real estate in wealthier coastal communities can be costly for state and local governments to acquire through their own funding sources and limit the ability for them to conduct large-scale buyouts, including on groups of contiguous properties or clusters. Even if federal funding is available, it can be difficult for state and local governments to provide a required match to buy out higher-valued properties and for these properties to meet eligibility requirements through, for example, the Federal Emergency Management Agency’s benefit-cost ratio.
- If bought-out residents do not relocate within the same jurisdiction, local governments can face losses in property tax revenue that can reduce a municipality's overall funding availability.
- For comprehensive buyouts, decisionmakers have to budget and allocate funding for property restoration and long-term management, and/or relocation assistance, which will exceed the price tag for the traditional expenses of only purchasing a property and demolishing structures.
- Governments should also evaluate funding for investments in affordable housing, infrastructure, and community services in “receiving areas” that can minimize the economic and social costs of relocation.
- Through property restoration and protection, communities can earn flood insurance discounts for their residents under the National Flood Insurance Program’s Community Rating System.
- The restoration, protection, and management of bought-out properties can maximize the attainment of environmental benefits, like reducing flood or storm impacts, reducing flood insurance premiums for neighboring residents, and providing habitat for species like migratory birds.
- Through meaningful and sustained community engagement into the design and use of bought-out properties, they can be transformed into important community assets, like parks or passive recreational trails, that can bring people together (barring any legal restrictions on future uses on the land e.g., through federal grant requirements).
- Open space can remove existing development and hard, structural barriers to facilitate the inland migration of coastal wetlands and forests that are unable to keep pace with sea-level rise, saltwater intrusion and salinization, and a loss of sediment to “adapt-in-place” on the coast.
- Underserved or lower-income neighborhoods with lower property values can be disproportionately identified for buyouts, even if they are voluntary, which can create social inequities. This is a complex issue with many contributors including the high cost of buyouts and the concentration of lower-income neighborhoods in higher risk areas.
- The buyout price (e.g., fair market value) offered to participants can create barriers for people relocating in coastal areas with historically strong real estate markets, particularly for frontline populations or the elderly who cannot afford or do not want to take out a large mortgage to purchase a new home in their existing communities (for more discussion, see the Crosscutting Policy Considerations>Community Engagement and Equity section of this toolkit).
- Meaningful and sustained community engagement can help residents: learn about potential buyout options, understand issues related to buyouts, build support for buyouts, and inform the design and management of post-buyout community assets.
When implementing buyouts in a managed retreat context, decisionmakers may consider the following practice tips to address and balance different policy tradeoffs:
- Develop sustainable sources of state and local funding: There is a lack of consistent or predictable sources of non-disaster-related funding to plan for and implement buyouts. Moreover, the amount of funding generally available is not comparable to the current needs of state and local governments, residents, businesses, and other important stakeholders in coastal communities. To minimize the administrative, economic, and social/equity costs of buyouts, the most successful examples of retreat will leverage state and/or local funding sources; however, many state and local governments struggle to identify viable ways to fund adaptation efforts on their own or without significant federal support. In order to implement buyouts in a non-disaster recovery context, state and local governments need to develop new, non-disaster-related sources of funding. Local programs in Austin, Texas (impervious surface cover fee), Charlotte-Mecklenburg County, North Carolina (stormwater fees), New York City, New York (water and sewer bills), and Harris County, Texas (property taxes) offer successful examples of governments implementing a phased-approach to buyouts supported by local funding. Dedicated local funding sources can also enable willing property owners who are otherwise ineligible for federal disaster-recovery dollars to be bought out. Charlotte-Mecklenburg Stormwater Services acquires homes that do not otherwise meet federal requirements through an “orphan” buyout program. States could consider enacting a comparable funding mechanism, loan program, or revolving fund to either support local buyouts or conduct buyouts at the state level. For example, New Jersey amended its constitution to annually appropriate a portion of its Corporate Business Tax for buyouts conducted through the New Jersey Blue Acres program. In addition, in 2019/2020, California and South Carolina proposed bills to create a state revolving loan fund that local governments could draw on for buyouts.See footnote 7 Independent sources of state and local funding can also be used to provide the state match, as needed, for buyouts under federal grants.
- Restore and manage bought-out land: In institutionalizing managed retreat through buyouts, governments need to think beyond the purchase of a property and the demolition of existing structures to the long-term use, management, and maintenance and quality of the land left behind. To attain objectives of long-term risk reduction and coastal resilience, buyouts have to be about more than an exercise in “walking away.” In addition to environmental benefits to reduce flooding and conserve ecosystems, communities can be further enhanced by and should be engaged in the development of nature-based assets, such as parks and trails.
Where possible, governments should pursue larger-scale buyouts and avoid checkerboarding to maximize these benefits. Governments should take a long-term or phased view of buyouts, especially for larger-scale areas comprising multiple contiguous or groups of properties. Often, residents are ready to move at different times due to various reasons like life events and for financial reasons. Returning over time to review if there is new interest in a buyout from remaining property owners can help reduce or eliminate checkerboarding. Other Acquisition Tools, such as leasebacks and life estates, can also help governments pursue larger-scale buyouts by working with property owners to balance their current needs with long-term risk reduction and managed retreat objectives.
- Provide relocation assistance: To minimize the social/equity costs of buyouts, governments can offer bought-out residents money in addition to the (pre-storm) fair market value they receive for their old homes to enable them to purchase quality new homes in less risky coastal areas or outside of 100- or 500-year floodplains. To facilitate buyouts, most governments offer participants the (pre-storm) fair market value of their homes; however, that amount can often create a barrier if it is not sufficient to acquire a new home outside flood hazard areas within the same jurisdiction, particularly in coastal areas with historically strong real estate markets. That barrier can be exacerbated for frontline populations, like the elderly and economically disadvantaged, and even younger generations who cannot afford or do not want to take out a large mortgage to purchase a new home over a decades-long time horizon. To mitigate or remove this barrier, state and local governments can look at examples from other jurisdictions, like Austin, Texas and the State of New York, who offer/have offered different types of financial incentives above the (pre-storm) fair market value of their homes to encourage participation in buyout programs and facilitate better transitions to higher value, lower risk properties within their jurisdiction. Moreover, proper financial incentives can also help people to relocate within their same state or municipality to maintain community cohesion and prevent the loss of different tax revenues.
When evaluating the amount of and types of potential relocation incentives for homeowners, governments do not have to “reinvent the wheel” and can draw from existing resources. The Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (URA) is a federal law enacted to provide standard and predictable real property acquisition and relocation expenses for homeowners and tenants of land acquired through eminent domain. URA ensures consistent treatment for people displaced through federal programs or with federal funding. In accordance with URA, states have developed relocation assistance laws and guidance for properties acquired through eminent domain for transportation (e.g., rights-of-way, road improvements) and other public works projects. States or local governments can replicate or build on this already-established work and adapt it for institutionalizing voluntary buyouts in a coastal context. For example, in Austin, Texas, the city’s Watershed Protection Department has exceeded federal and state requirements and adopted URA's relocation assistance model for voluntary, in addition to involuntary, buyouts for flood risk reduction projects. Austin utilizes an existing system to provide relocation assistance (in the form of payments above a buyout offer to enable people to purchase a “comparable home” in Austin) and does not need to dedicate limited city resources to develop new relocation assistance policies from scratch.
- Coordinate buyouts with investments in receiving communities: To minimize the economic and social/equity costs of buyouts, it is important that governments remember getting people out of harm’s way is only a part of, and not the entire, objective of managed retreat. Retreat also necessitates facilitating meaningful transitions for people to safer, higher ground locations or “receiving areas or communities” where they can, at a minimum, have their basic needs met for affordable, comparable housing and necessary infrastructure and community services (e.g., Minot, North Dakota, Lumberton, North Carolina). Governments can, for example, minimize losses in property tax revenues if people relocate locally by moving into homes within their current jurisdiction (For more discussion about receiving communities, see other sections in this toolkit).
- Build public-private partnerships: Governments can build different types of public-private partnerships to maximize environmental and social/equity benefits and minimize administrative, environmental, and social/equity costs. Depending on the purpose of a given partnership, nongovernmental partners can include a host of entities like environmental nonprofits, universities, local industries, community development or community-based organizations, religious charities, and land trusts. Public-private partnerships have led to successful post-buyout restoration projects and supported on-going stewardship. For example, environmental nonprofits, universities, and conservation land trusts can lend governments scientific expertise, volunteers, and funding support or supplement limited government staff and funding resources to restore and monitor bought-out land. Moreover, these organizations could potentially be given title to and management responsibilities over bought-out land (barring any legal restrictions on title transfers, for example, through the Federal Emergency Management Agency’s Hazard Mitigation Grant Program regulatory requirements). In addition, public-private partnerships with community-based organizations can facilitate better engagement with residents to educate them about the tradeoffs of participating in a buyout and empower them with accurate information to make informed decisions. These types of relationships can also help governments overcome community engagement barriers due to fears of government mistrust or eminent domain, particularly in historically marginalized or underserved communities. Partners like religious charities can also provide bought-out residents with relocation assistance or “gap” funding above the price they received for their homes to ease transitions to a new area (e.g., moving costs).
To sustain buyout programs and justify the expenditure of public funds, governments will likely need to demonstrate the benefits of buyouts, including their returns on investment (e.g., Charlotte-Mecklenburg Storm Water Services, North Carolina) or potential to offset lost property tax revenues, through comprehensive benefit-cost analyses and other tools (e.g., Harris County, Texas Flood Control District’s use of GIS technology to show avoided flood damages in bought-out areas). Governments could consider developing public-private partnerships with universities or nonprofits that specialize in data collection and analysis to evaluate the benefits and costs of buyouts and potential increases in properties that surround bought-out areas that may offset property tax losses, at least to some extent.
Managing the Retreat from Rising Seas — State of New Jersey: Blue Acres Buyout Program
Managing the Retreat from Rising Seas — Woodbridge Township, New Jersey: Post-Hurricane Sandy Buyouts
Established in 1995, the New Jersey Blue Acres Buyout Program is a nationally recognized example of a longstanding, state-run buyout program. Blue Acres works closely with local advocates that have first-hand experience from repetitive flooding and municipalities throughout the state to identify privately owned properties that are routinely threatened or flooded due to sea-level rise and more frequent weather events. The program’s experience with buyouts positioned the state to respond quickly to purchase properties from willing residents in the wake of Hurricane Sandy. The program works directly with local governments to prioritize comprehensive buyouts of affected neighborhoods, instead of individual properties, and restores and protects the properties to maximize the flood and cost-reduction benefits for communities and the environment. To accomplish effective state-local coordination, the program has a diversified staff that meets local needs including case workers who work directly with participants in each buyout area, and a financial team that negotiates mortgage forgiveness with banks and other financial lenders on behalf of homeowners. Blue Acres has been funded by state bond acts and federal disaster recovery grants. In 2019, the New Jersey Legislature passed a constitutional measure to provide a sustainable source of funding for Blue Acres from a portion of the state’s Corporate Business Tax.
New Jersey Payment-in-Lieu-of-Taxes (PILOT) Program
The Township of Woodbridge, New Jersey is vulnerable to tidal and fluvial flooding and coastal storm events. The impacts of these events have been exacerbated by the township’s low elevation and highly urbanized land cover. Following Hurricane Sandy in 2012, which caused significant damage to low-lying neighborhoods within the township, Woodbridge was one of the first communities to benefit from New Jersey’s Blue Acres Buyout Program assistance through three funding rounds, for a total of 200 homes. The Blue Acres Program uses state and federal funding to voluntarily purchase privately owned properties in New Jersey that are routinely threatened and flooded. Woodbridge has been a successful participant in the Blue Acres Program and provides an example of how comprehensive planning and community engagement can lead to an effective voluntary buyout process.
Managing the Retreat from Rising Seas — Charlotte-Mecklenburg County, North Carolina: Floodplain Buyout Program
In 1971, New Jersey implemented the Payment-in-Lieu-of-Taxes (PILOT) Program. Through this program, the state pays municipalities to protect and conserve open, undeveloped lands owned by the state and tax-exempt nonprofit organizations. This program was created to serve the environmental quality, quality of life, and economic health in New Jersey by conserving open space for natural resources and recreational purposes. While this program has been amended throughout its tenure, it is a noteworthy example of a state program that creates incentives for local governments to create open space by mitigating the impacts of lost tax revenue. In a managed retreat context, a similar program could be coupled with hazard mitigation buyouts and open space acquisitions to encourage local governments to conserve vulnerable properties impacted by sea-level rise and flooding.
Managing the Retreat from Rising Seas — Harris County, Texas: Flood Control District Local Buyout Program
Mecklenburg County, North Carolina, which includes the City of Charlotte, is vulnerable to the impacts of flooding due to property development within the flood zone. In 1999, Charlotte-Mecklenburg Storm Water Services (a county-wide regional utility) launched a Floodplain Buyout Program to relocate residents out of the floodplain and reduce long-term flood damage. The buyout program is focused on risk reduction and flood mitigation best practices, where once bought out, properties are returned to open space uses to restore their natural beneficial flood retention functions and provide passive community amenities, like parks and trails. Charlotte-Mecklenburg Storm Water Services has also supported a number of leaseback arrangements on a case-by-case basis with property owners to increase participation in the buyout program and reduce property maintenance costs. As a result of the floodplain acquisitions, the community has benefited from creating an additional 185 acres in open space and recreational assets as well as other community benefits, such as the development of newer code compliant buildings in less vulnerable locations within Mecklenburg County. The program has been funded through a combination of federal and local government sources, with leasebacks also supporting some cost recuperation. Between 1999 and 2019, more than 400 flood-prones homes and businesses have been purchased by Charlotte-Mecklenburg Storm Water Services through the Floodplain Buyout Program. This program has enabled over 700 families and businesses to relocate to less vulnerable locations outside of the floodplain.
Managing the Retreat from Rising Seas — City of Austin, Texas: Flood Risk Reduction Buyout Projects
In 1985, Harris County, Texas initiated a voluntary home buyout program through an established government agency, the Harris County Flood Control District (HCFCD). As a result of the program, more than 3,000 properties (as of 2018) have been purchased to remove residents from flood-prone areas and prevent future flood damage to people, property, and the environment. HCFCD has developed an effective communication and outreach strategy to educate the public and encourage program participation. Properties have been acquired with grants from the Federal Emergency Management Agency’s Hazard Mitigation Assistance program, Department of Housing and Urban Development’s Community Development Block Grant program, and local funding from a dedicated ad valorem property tax (i.e., a tax based on a property’s assessed value). The buyout program is focused on risk reduction and flood mitigation best practices, where once bought out, properties are returned to open space uses to restore their natural beneficial flood retention functions.
Managing the Retreat from Rising Seas — New York City, New York: Land Acquisition and Flood Buyout Programs
The City of Austin, Texas has adopted a model to provide consistent relocation benefits for voluntary home buyouts in the city’s floodplains as a part of its “flood risk reduction projects.” In addition to the cost of a person’s original home, the city will provide homeowners with moving and closing costs, and a replacement housing payment if the cost of a new comparable home (located outside of the city’s 100-year floodplain) is more than the original home. Floodplains cover nearly 10 percent of Austin’s land area. This policy encourages owner participation in buyout projects to reduce the risks associated with flooding and to minimize the economic and social costs of displacement. Since the 1980s, the city has implemented 10 different buyout projects, with each project ranging from a handful of properties to more than 800 properties. The city’s Watershed Protection Department prioritizes buyouts in accordance with a Watershed Protection Master Plan that strategically guides city actions to reduce the risks associated with erosion, flooding, and poor water quality. A mix of municipal bonds, federal grants, and local funds (primarily through a drainage fee for impervious surface cover) have been used to fund the buyouts. The Watershed Protection Department works closely with the City’s Office of Real Estate Services to administer the buyout projects.
Managing the Retreat from Rising Seas — Staten Island, New York: Oakwood Beach Buyout Committee and Program
The New York City Department of Environmental Protection (NYC DEP) offers flood mitigation buyouts within the NYC watershed, in cooperation with the state, through a Flood Buyout Program that can serve as a model for other coastal and riverine jurisdictions considering retreat. These buyouts are part of a comprehensive flood hazard mitigation program that relies on scientific studies termed Local Flood Analyses (LFA). LFA enable NYC DEP to identify solutions to reduce flooding that may involve buyouts, and then to fund and implement recommended projects. NYC DEP’s buyouts are primarily funded by local sewer and water bills and may be supplemented by grants from the Federal Emergency Management Agency. NYC’s work is also supported by the Catskill Watershed Corporation (CWC) (a locally based nongovernmental organization), Cornell Cooperative Extension, and a network of Soil and Water Conservation Districts. Communities completing a LFA can apply to CWC for planning grants to help identify areas in local plans, codes, and maps where bought-out residents may relocate to minimize the social and economic costs of buyouts, including loss of local tax bases. Notably, NYC DEP administers a Land Acquisition Program — in addition to its Flood Buyout Program — with a focus on conserving land within the NYC watershed to protect water quality. This dual approach to both buyouts to mitigate flood risk and open space acquisitions to enhance water quality is a unique model that other state and local governments can replicate to achieve co-benefits through land acquisitions.
Buy-in for Buyouts: The Case for Managed Retreat from Flood Zones
Following Hurricane Sandy in 2012, Oakwood Beach on Staten Island in New York City became the first community to take advantage of New York State’s post-Sandy buyout program. As a whole, the members of the small community formed the Oakwood Beach Buyout Committee, and petitioned the state government to buyout entire neighborhoods, which resulted in large-scale risk reduction and cost-saving benefits compared to individual buyouts. Less than three months after Sandy, Governor Andrew Cuomo announced a state-funded buyout program, pledging upwards of $200 million to relocate families in high flood risk areas in places like Oakwood Beach. The State of New York offered residents a ten-percent incentive above the pre-storm fair market value of their homes to participate. In addition, the state offered a five-percent incentive for participants who would relocate within the same five boroughs of New York City or county to maintain local tax bases. One year later, 184 out of 185 homeowners applied to the program — and by 2015, 180 of those homeowners were accepted to participate in the state’s voluntary buyout program. This process serves as an example of a successful, community-driven voluntary buyout effort.
Floodplain Buyouts: An Action Guide for Local Governments on How to Maximize Community Benefits, Habitat Connectivity, and Resilience
In this report, the Lincoln Institute of Land Policy and the Regional Plan Association present best practices for state and local governments to encourage residents and communities vulnerable to flooding to relocate from coastal and riverine areas through managed retreat. Based on the experiences of communities in New York, New Jersey, and Connecticut following Hurricanes Sandy (2012) and Irene (2011), the report summarizes the political, social, and economic challenges of using buyouts and acquisitions as an adaptation strategy. Despite these challenges, the authors conclude that buyouts and acquisitions are viable and important tools that can help states and local governments address flooding impacts associated with natural disasters and rising seas. The report also provides recommendations on how to establish, fund, and implement such programs.
Minot, North Dakota Floodplain Buyouts and Affordable, Resilient Housing “Buy-In” Program
In this report, the Environmental Law Institute (ELI) and University of North Carolina (UNC) collected case studies from across the country of communities that have established buyout programs and management structures to “make the most” out of acquired properties in terms of minimizing governmental costs and maximizing community, ecosystem, and resilience benefits. The report includes examples and recommendations that could spark discussion, and potentially innovation, at the local level. For example, the report features case studies of Green Forks, Minnesota and Tulsa, Oklahoma that fund greenway maintenance with an annual utility fee and stormwater fees assessed on new construction projects, respectively. Wyoming County, West Virginia leases bought-out properties to neighboring landowners for $25 per year for non-intensive agricultural (e.g., gardens) and grazing uses. Although the rent charged is minimal, the greater advantage is that a private property owner assumes maintenance costs and can give life to open spaces. The report also includes a useful decionmaking framework that local governments can consult to assess potential uses for acquired properties against different tradeoffs, such as funding, the size and scale of a bought-out area, and legal feasibility and political acceptance questions. Ultimately, ELI and UNC find that while there is not a “one-size-fits-all” answer to what local governments should do with bought-out properties, there is increasing evidence — and an increasing number of jurisdictions — actively planning for and managing this land.
South Carolina Disaster Relief and Resilience Act
In 2011, Minot, North Dakota experienced a record-breaking flood impacting more than 12,000 residents and three to four thousand homes. Concurrently, Minot suffered from an affordable housing crisis due to a boom in oil production in the region that brought more people to the city for work. To address these housing issues and become more resilient to future floods, the city applied for and won $74.3 million (in Community Development Block Grants — Disaster Recovery) through the U.S. Department of Housing and Urban Development’s National Disaster Resilience Competition. Between 2017 and 2022, the city will undertake several projects including buying out over 400 homes. Minot will simultaneously develop a “Buy-In” Program to create 609 new affordable housing options (both single-family homes and rental units) in three new “Resilient Neighborhoods,” which will enable both bought-out and new residents, including the city’s elderly, disabled, homeless, and financially burdened, to “buy-in” to Minot. To support the Buy-In Program, Minot partnered with the North Dakota Housing Financing Agency to initiate the “Resilient Homebuyer Program” to offer accessible mortgage loans and other financial assistance to low-to-moderate income residents purchasing a new home in one of the Resilient Neighborhoods.
Annexing Higher Ground and Preparing Receiving Areas in Hamilton, Washington
South Carolina's Disaster Relief and Resileince Act models how states can support local policymakers and communities considering buyouts as a potential option to implement managed retreat. South Carolina can fund voluntary buyouts that increase the state's resilience to natural disaster and flooding events through its Disaster Relief and Resilience Reserve Fund and its Resilience Revolving Fund. Through the Disaster Relief and Resilience Reserve Fund, South Carolina can provide aid to communities with "significant unmet needs" following a federally declared disaster event. These funds can support floodplain buyouts, resident relocation, buyout assistance, and floodplain restoration for single- and multi-family units not eligible for a buyout under the Federal Emergency Management Agency's Hazard Mitigation Grant Program. Funding priority is given to projects identified in South Carolina's Statewide Resilience Plan or in local hazard mitigation plans, as well as to projects that provide enhanced protection from future flood events and/or incorporate nature-based solutions. Additionally, the state provides low-interest loans and grants to local governments to perform floodplain buyouts and restoration projects through the South Carolina Resilience Revolving Fund. Communities can apply to the the Resilience Revolving Fund to finance projects to buy out properties experiencing repetitive flood loss and to restore floodplains in bought-out areas. The Resilience Revolving Fund prioritizes buyouts of multiple or clusters of properties, rather than buyouts of individual scattered properties. This Fund also prioritizes voluntary buyouts and relocation for low- to moderate-income households.
Post-Disaster Community Investments in Lumberton Through the North Carolina State Acquisition and Relocation Fund for Buyout Relocation Assistance
In 2019, after decades of repetitive flooding, the town of Hamilton in Skagit County, Washington partnered with Forterra, a local land conservancy nonprofit, to annex a 48-acre parcel of land located outside of the town’s 100-year floodplain. Annexing this land will provide Hamilton with a higher, drier ground area where town residents could voluntarily relocate to new homes. Hamilton and Forterra have yet to conduct any buyouts related to the annexed land. However, if and when homes in the floodplain are bought out, the homes will be razed, infrastructure will be decommissioned, and the lots will be revered to riparian habitat. Hamilton homeowners could use their buyout funds to purchase a subsidized, affordable home in the new annexed area or anywhere else. Accepting a buyout and relocating to the new development is completely voluntary. Hamilton provides an example of how local governments can utilize various strategies, such as annexation, to incentivize voluntary buyouts within a community.
Uniform Relocation Assistance and Real Property Acquisition Act of 1970
Lumberton, North Carolina provides one example of how state funding for relocation assistance can help support local buyouts and community investments in underserved areas. In the Fall of 2016, the small community of Lumberton was devastated by Hurricane Matthew when the Lumber River flooded. As the city was beginning to recover, only two years later, Lumberton was hit a second time by Hurricane Florence. As of 2019, Lumberton is seeking to leverage several grants and funding programs, including North Carolina’s State Acquisition and Relocation Fund (SARF), to rebuild the community and provide residents with relocation assistance to obtain new homes in Lumberton through a state-local partnership. Specifically, with funding from SARF, the local government is considering opportunities to invest in new homes in one existing, but underserved neighborhood of Lumberton that can offer safer homes for bought-out residents. As SARF and the ongoing work in Lumberton demonstrate, state and local governments can support voluntary, post-disaster transitions of people and minimize negative impacts to individuals, communities, and local tax bases from buyouts by reinvesting in underserved areas within their municipalities.
The Uniform Relocation Assistance and Real Property Acquisition Act of 1970 (URA) (42 U.S.C. §§ 4621 et seq. (2020); 49 C.F.R. pt. 24 (2020)) is a federal law enacted to provide standard and predictable real property acquisition and relocation expenses for homeowners and tenants of land acquired through eminent domain. URA ensures consistent treatment for people displaced through federal programs or with federal funding. State and local governments can learn and draw from URA when evaluating the amount and types of relocation assistance potentially provided for bought-out homeowners and tenants as a part of comprehensive retreat strategies. Relocation assistance can help people impacted by disaster events, like flooding, or more gradual changes from climate change, like sea-level rise, afford a new home on safer ground by offsetting the different costs associated with buyouts. In addition, relocation assistance can potentially incentivize and better enable residents to relocate within their same municipality or region if housing prices are cost prohibitive without gap or supplemental government funding above the money provided for a buyout (e.g., pre-storm fair market value). Local relocations can help to preserve communities and minimize the social and economic costs of moving and reductions in tax bases.
Acquisition Tools Open Space Acquisitions