Preventing Neighborhood Blight After Natural Disasters By Using Home Buyout Programs Strategically

(July 2018) An ongoing rise in the number of catastrophic flood events, like the two recent “1,000 year storms” in Ellicott City, Maryland, has prompted government officials to re-examine the potential of home buyout programs as a key solution to the costly issue of repeated flooding in the same communities. These efforts are critically important, but they could achieve even better results if they were undertaken within the larger framework of a neighborhood stabilization strategy.

The May introduction of bipartisan legislation (the “Promoting Flood Risk Mitigation Act”) in the U.S. House (where it was also marked up at the end of June) and Senate is a partial step in the right direction. The Act commissions a federal study of funding sources for buyouts and paperwork processing timeframes for the Federal Emergency Management Agency’s property acquisition programs.  NCST believes that the proposed study should also examine best practices around using buyouts as part of a longer-term strategy to prevent neighborhood blight.

When designed thoughtfully, home buyouts can offer a structured option for preventing blight by addressing repeatedly flood-damaged properties that owners may be inclined to abandon. Currently, few communities know how to strategically use buyouts in a way that prevents future destabilization of neighborhoods. Communities do not always have enough information or funding to create a cohesive buyout strategy, or they give up after struggling with federal and local bureaucracy.

As a result, efforts to address longstanding blight can take place years after the disaster event. For example, local officials in Minot, North Dakota recently advanced a proposal to address blight caused by a 2011 flood after struggling with acquisition strategy for years. Similarly, communities in North Carolina are still grappling with “checkerboards” of vacant lots after Hurricane Matthew in 2016. Such examples should be the exception, not the rule.

Going forward, we are likely to see an increasing number of flood events, given climate change as well as the continued use of impervious surfaces in watershed areas, which means the topic of home buyouts will arise with increasing frequency in federal and local policy conversations. However, buyout programs that do not operate within a larger framework of a neighborhood stabilization strategy are missing an important opportunity.

NCST has previously worked with partners to support communities in flood-affected areas, and now we would like to see steps taken to avoid such disasters in the future. The deadline for reauthorizing the National Flood Insurance Program is July 31. It would be a good idea to include a study such as the one proposed in the Promoting Flood Risk Mitigation Act, which should also examine the use of comprehensive buyout strategies for blight prevention and the re-establishment of healthy neighborhoods.

Theodora Chang serves as Senior Policy Associate for NCST. She joined NCST in June from Fannie Mae, where she held a management consulting role. She has previously served on policy teams at nonprofit organizations, and in federal and local government.