Are Buyouts a Viable Tool for Climate Adaptation?

After a disastrous flash flood event inundated Allegany County, Maryland in June of 2014, the owner of the Garden City Mobile Home Park put in a request: add his land to the state buyout list. Now, some seven years later, the county is purchasing seven acres of the 11-acre property and relocating 28 tenants out of the flood plain.

Similar buyout programs are taking place across the country as climate change increases the frequency and severity of extreme weather events. By the end of the century, 13 million Americans could be displaced by sea level rise alone. But while the need for adaptive solutions is clear, questions remain as to where buyouts can and should fit in.

From June 22 to 25, stakeholders from around the world grappled with the role of buyout programs during the Columbia Climate School’s conference, “At What Point Managed Retreat? Resilience, Relocation, and Climate Justice.” Across panel discussions, participants agreed that if buyouts are to function as an equitable and effective tool for managed retreat, then they have a ways to go — especially to meet the scale of climate-driven migration expected in the coming decades.

How buyouts work

On the surface, buyout programs seem like a straightforward proposition. A resident whose home is increasingly vulnerable to the impacts of climate change agrees to sell their property to their local government and relocate. Within that proposition, however, is a web of complex decision-making for both property owners and program practitioners.

“It’s not just buying a particular piece of property on a particular parcel of land,” said Matthew Fuchs, who works in the Flood-Prepared Communities Initiative at the Pew Charitable Trusts. “You’re talking about all the things that make up a community — social networks, economic networks, transportation, supply chains.”

Administering a buyout program requires intricate coordination across every level of government. Local officials work with members of the community to develop and submit a grant application to their state hazard mitigation officer. States review these applications and then pass them on for the Federal Emergency Management Agency, or FEMA, to approve.

FEMA is the federal government’s primary vehicle for supporting buyouts. The agency doesn’t have a pot of money specifically reserved for local property acquisition but rather provides states with grant funding from two buckets: pre-disaster funding and post-disaster funding. Once FEMA approves an application, these federal funds can be used to finance up to 75 percent of a project. The other 25 percent has to come from the state, county, or locality — one of the many barriers that inhibits communities from considering buyouts in the first place.

“A lot of the issues we come across are related to community buy-in,” said JaLeesa Tate, the state hazard mitigation officer for Maryland who is overseeing the Garden City Mobile Home buyout. “Especially in our low-resource communities, there are numerous concerns about how they can provide that non-federal share [of funding] for FEMA grants.”

The application process is also time-intensive, requiring local governments to have enough staff with the right mix of expertise. On average, it takes about 15 months for a property acquisition application to go from local to state to federal government, according to Eric Letvin, FEMA’s director of hazard mitigation and risk reduction policy. In some cases, the local government will spend years building partnerships within the community and participating in community-led planning processes before they submit their application to the state, as was the case with the Garden City Mobile Home park buyout. FEMA’s approval of the funds can then take up to another four months. “We would certainly love to see that number go down,” Letvin said. “Especially in the post-disaster environment [when] people’s homes are damaged, and they want out.”

Letvin estimates that, over the last 40 years, FEMA has spent $3.4 billion dollars on approximately 48,000 successful buyouts in the United States, a vanishingly small number when compared to the 14.6 million properties currently located in the 100-year flood zone. By 2050, that number is expected to climb to 16 million properties, according to research group First Street Foundation.

Who has access

FEMA-funded buyout programs have predominantly taken place in wealthier, urban counties — or, as A.R. Siders of the University of Delaware put it, the counties that are best positioned to “game the system.” Buyouts within these wealthier counties are then concentrated in neighborhoods with lower average incomes and greater social vulnerability.

Linda Shi, whose research at Cornell University focuses in part on the equity of buyouts, said there are a number of compounding reasons as to why these programs typically serve such a narrow subset of people. When deciding which properties to include in a buyout program, local governments often rely on cost-benefit analyses based on property values, she explained. Homes with lower property values that are in a greater state of disrepair are natural buyout candidates, as their removal reduces community risk and the costs associated with rebuilding.

This reliance on cost-benefit analyses to determine buyout recipients raises important equity and environmental justice concerns. Low-income communities and communities of color are more often impacted by extreme weather events because they suffer from a historic lack of infrastructure investment. In many cases, the reason why these communities — particularly Indigenous tribes — are located on the front lines of climate change is because of forced displacement driven by centuries of racial injustice. Now, faced with increasing climate risks and limited means to adapt in place, homeowners may have few other options than to opt for a buyout.

The extent to which buyout practitioners account for equity varies from program to program. Throughout her research, Siders has found that some practitioners choose to prioritize buyouts in low-income areas in an effort to break the disaster-rebuild cycle. Others explicitly choose not to prioritize buyouts in low-income areas out of concern that residents will feel coerced out of their homes or struggle with finding replacement housing in the same community.

“Personal values are shaping how buyout programs are structured and implemented in ways that really matter for the people who are participating,” she said.

What is left behind

The same holds true for the people who aren’t participating in buyout programs. Because the majority of buyouts are voluntary and relocation is rarely, if ever, offered for whole communities, streets once lined with houses can start looking like rows of jagged teeth.

“What we want when we talk about buyouts — after all the sacrifice — is to leave these restored, beautiful and pristine environments,” said Shi. “But what we often see, if we get buyouts at all, is a fragmented landscape.”

The responsibility of maintaining parcels of land post-buyout falls to the local government. For communities with sufficient resources, this presents an opportunity to create protected natural areas or intentional green spaces like parks. But for communities without those resources, the maintenance alone can be a financial burden, particularly when paired with the loss of property tax revenue. In one study, researchers found that of the roughly 10,000 parcels of land involved in FEMA buyouts between 1990 and 2000, about 35 percent were left as vacant lots, 20 percent were turned into parks or recreational trails, and less than 8 percent were preserved.

Where to go from here

From start to finish, the implementation of buyout programs as a tool for managed retreat is, much like managed retreat itself, highly controversial. Conference participants agreed that the sustained viability of the policy will depend in large part on the improved design of buyout programs and, relatedly, the improved outcomes for those who participate in them.

“In the long term, there are intergenerational gains from moving that are possible for some people under a certain set of circumstances,” said Miyuki Hino, an assistant professor at the University of North Carolina Chapel Hill. “I think the challenge is understanding who those people are and what support structures they should be provided with.”

One of the recommendations put forward by the Flood-Prepared Communities Initiative at Pew is to establish an interagency task force within the federal government that would guide state and local applicants through the buyout process and consult them on the full range of options available. At the community level, Tate underscored the need for more proactive engagement with residents about the concept of resettlement and the value of resident-driven decision-making through exercises like community visioning sessions.

There is also a widespread need for better housing alternatives. “Deciding not to put more housing in harm’s way can only happen if we create places where people really want to live,”  said Micahel Wara, director of the Climate and Energy Policy Program at Stanford University. “And those places need to be affordable.”

While the complexity of scaling an equitable system for managed retreat looms large, Hino is optimistic that more and more people are beginning to recognize the possibility for positive resettlement experiences. “We can lose things even when we don’t physically move,” she said, “and we can move things without losing them.”