By a News Reporter-Staff News Editor at Real Estate Weekly News -- In the face of rising sea levels, more frequent and severe storms, and other climate change risks, flood-prone communities need to give greater consideration to strategic retreat through buyouts, a policy tool for removing residential development from the most vulnerable areas, according to new research published by the Lincoln Institute of Land Policy in collaboration with the Regional Plan Association.
In Buy-In for Buyouts: The Case for Managed Retreat from Flood Zones, authors Robert Freudenberg, Ellis Calvin, Laura Tolkoff, and Dare Brawley demystify the mechanics of buyout programs and how they have been implemented in the U.S., with a focus on communities in the New York metropolitan region that suffered damage from Hurricanes Irene and Sandy. They provide a roadmap for making programs more effective and more likely to garner the support of local governments and community members.
Managed retreat "allows residents to forge new beginnings on safer ground and helps create public amenities by acquiring homes in the flood-prone areas and restoring the land to natural floodplain functions," the authors write.
The fiscal impact of buyout programs is one of the biggest factors weighed by local governments in embracing or resisting buyout programs, according to the report. Incorporating financial considerations into the reuse of acquired properties and the relocation of residents is critical. For example, well designed parks can make nearby property more desirable, and open space projects can deliver water supply and flood prevention benefits.
"Restricted land use coupled with new amenities can increase property values and, in turn, increase local revenue," the authors write. "If local governments plan properly, homeowners can relocate within the municipality and thereby maintain, and even enhance, the tax rolls."
Buyout programs in the U.S. date back to the 1970s. They are funded primarily with federal grants from the Federal Emergency Management Agency (FEMA) and the Department of Housing and Urban Development (HUD), but programs are typically managed and overseen locally. The details of programs vary greatly, but in most cases a public agency acquires properties from homeowners and converts them to a less risky use, usually open space or parkland, although in some cases structures may be rebuilt to meet strict building code and elevation requirements.
Buyout programs can help break a cycle in which homeowners are incentivized to live in disaster-prone areas by federally subsidized flood insurance, which effectively shifts financial risks to the public. Under the 2012 Biggert-Waters Flood Insurance Reform Act many of these subsidies will be phased out, which is expected to raise premiums sharply for some residents and increase the need for alternative solutions such as buyouts.
Buy-In for Buyouts examines the use of buyouts in five communities in New York, New Jersey and Connecticut, analyzing the implementation of programs at the state, county and municipal levels. The report includes a detailed fiscal impact analysis for each community, untangling the costs and benefits of removing properties from the floodplain and from property tax rolls, as well as an analysis of local demographic factors such as income, ethnicity, and homeownership rates, which are critical for understanding how well programs serve socially vulnerable populations. The local communities include Oakwood Beach, Staten Island, New York; Mastic Beach, Long Island, New York; Wayne Township, New Jersey; Sayreville, New Jersey; and Milford, Connecticut.
Buyout programs played out very differently in each community. For example, the Oakwood Beach neighborhood benefited from being part of New York City, which made the loss of property tax revenue negligible and helped achieve 99 percent participation. In Mastic Beach, by contrast, buyout efforts were hamstrung by opposition from some municipal officials, and "conflicting programs and messages from different agencies and levels of government led to confusion among residents over their options."
Keywords for this news article include: Government, Homeowners, Real Estate, Property Tax, Lincoln Institute of Land Policy.
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