Buyouts Transform Flood Prone Neighborhoods

HOUSTON – (By Michelle Leigh Smith for Realty News Report) – Governmental buyouts of flood-prone homes, a remedy used in the wake of Hurricane Harvey that flooding 100,000 homes in Houston, are gaining momentum across the nation.

Flood-related buyouts have generally been focused on residences, but it has been suggested that the program should be used for more commercial property as well.

Other important questions are being discussed regarding the ultimate use of land acquired in buyouts and its eventual use for community open space or parks.

ULI report: “On Safer Ground: Floodplain Buyouts and Community Resilience”

A new report from the Urban Land Institute (ULI) details how floodplain buyouts can be a  cost-effective method to mitigate damage from rising water levels, and could offer other community benefits.

The ULI report “On Safer Ground: Floodplain Buyouts and Community Resilience” provides an interesting and upbeat forecast in a logical progression of flood damage reduction.

“Floodplain buyouts are a key tool for real estate and land use decision-makers to understand,” said Katharine Burgess, vice president of Urban Resilience at the Urban Land Institute and contributing author of the report. “Notably, buyouts offer one key example of household-level migration away from sites which are experiencing repetitive flooding losses and offer a glimpse into potential future migration trends due to the impacts of climate change.”

Harris County and Inundation Pathways

Harris County, the center point of the Houston metroplex, has faced the issue of catastrophic floods for decades. In response, the Harris County Flood Control District mounted the Voluntary Acquisition Program to identify property in likely inundation paths and work with residents. It finds success on two paths: delivering public spaces that control flooding impact and executing buyouts that rescue homeowners. The Community Flood Resilience Task Force advises county officials on how to equitably distribute a $2.5 billion bond for flood mitigation projects and buyouts for homes affected by Hurricane Harvey.

Regardless of locale, the common chorus from all respondents was “Divided We Fall, Together We Rise.” Community-based organizations like the Westbury Civic Club help raise residential awareness.

Craig Maske, Chief Planning Officer at Harris County Flood Control District, and James Wade, Manager of the Property Acquisition department are two key stakeholders in the comprehensive study. HCFCD’s territory encompasses all the land around the county’s 2,500 managed waterways and 1500 bayous.

James Wade is a good listener.  He is working with homeowners in 70 identified areas where the flooding was so intense and the water was so deep that it makes no economic sense to rebuild.  He has around half a billion in funding to buy those homes and help relocate the families. He notes, “The biggest thing is the fact that we do have such a large buyout program. People have told me in the past that were have the largest in the nation, that is really by virtue of being the 4th largest city. We have been very successful getting FEMA grants,

The key to success of the buyout program is outreach – getting the word out that the FEMA funds will not be there for the families unless their decision to sell to HCFCD and move is voluntary. Then, grant applications are written and submitted and 8 – 18 months later (if lucky) the Flood Control District gets grant money. With the HUD funds, the voluntary component is not necessary but it helps keep the costs more reasonable.

“The Harvey (HMPG) grant application period did not open until February 2018, but by the end of May, we had our first grant, we were making offers by July, as soon as we received authorization from Commissioners’ Court.

“When you look at the recent HUD funding, it’s just not a certainty,” he says. “At first we weren’t going to get any of those dollars. With our Harvey FEMA buyout money, we’ve been very successfully getting grants.  We have over $516 million in FEMA, HUD, and local funding. The FEMA Hazard Mitigation grant (HMPG) funding resulted after Harvey in 2018.”

“So far, we’ve already bought over 442 homes in our FEMA HMGP grant, with 213 in-process homes,” Wade says. There are also 6 other active buyout projects.  All 7 projects total over 650 properties currently in process of purchase and over 650 purchased since Harvey. Seven have been in Westbury, the largest neighborhood in Houston with 8,740 homes.  Those homes were on streets along the Willow Waterhole bayou.  “These 7 were actually not HMGP buyouts. These properties were purchased to install overflow swales (ditches) and used no grant funds,” says Wade.

After Being Flooded 12 Times, House Meets Bulldozer

Becky Edmondson, past president of the Westbury Civic Club, cited an example of a flooded home that seriously needed to be demolished.The house was flooded a dozen times before it was sold to HCFCD in February of 2021.  The  dwelling has been demolished and the land is being used for improvements along the Willow Waterhole Bayou.

In Meyerland, where there are homes that flooded in 2017’s Hurricane Harvey, the Tax Day flood (April 18, 2016) and the Memorial Day flood (May 25, 2015), most of the homeowners have built elevated in order to stay. “In Meyerland, we are widening and deepening the bayou, a lot of private property owners are doing a lot of home elevation,” says Wade. Overwhelmingly, he said, Meyerland property owners are not interested in buyouts and the community isn’t interested in checker-boarding that sometimes occurs with buyouts.

Life, Death and The San Jacinto River

Many buyouts are occurring in the floodplain around the San Jacinto River, where flooding has often gone beyond damaged property into a matter of life and death. “In the Forest Cove area, there were places where entire structures were washed off their foundation, so these are areas where it is the most critical,” Wade says.  “People could die.”

In addition to the scourge of flooding, buyout opportunities can cause social and psychological impacts. For many homeowners, the prospect of moving away from established social and community networks, their trusted family doctors or neighborhood school translate to them preferring to stay in their neighborhoods.

“This situation is particularly stressful for property owners in a post-disaster context,” says Wade. “Many homeowners experiencing long wait times are those who can least afford it.  As a result, some property owners may have to list their house to avoid the risk of a denied buyout application or a long period in limbo.”

ULI DEFINITION of Buyouts

“A floodplain buyout is a property acquisition in which a government agency purchases private property, demolishes any structures on it, and preserves the land as open space, as an area that absorbs excess water, or for both purposes. Although buyouts are currently almost entirely used for residential properties in the United States, the increased use of the approach in urban areas has important implications for all real estate types and for future land use regulation and climate resilience strategy.”

 In Harris County Commissioner Adrian Garcia’s Precinct 2, there have been over 230 buyouts since Harvey.  There are over 200 more buyout currently in process.

Additionally, three voluntary buyouts have been completed through the Harris County Community Services CDBG project, another 18 are in the process or very close to being completed countywide, says County press secretary Scott Spiegel.

“Neighborhood canvassing will resume soon. We partner with Community advisory groups such as East Aldine District to let the residents know their options.  Once a home is purchased, a covenant is placed with Harris County Clerk’s office to ensure the property is never built on again. Owners in the process are urged to contact the county if predatory buyers/flippers try to swoop in underneath to purchase the property,” Spiegel advises. “The County can offer Fair Market Value with the most up to date current comps, the owners have a waiting period to find a new place and they also can get moving assistance. With flippers or predatory buyers, once they close, if they don’t have a new home to move to, they’d have to pack their stuff in storage. In this especially hot real estate market, this is a very important protection for folks in the program.”

‘The County Helped Us Find a New Home’

For homeowner Bedina Houston, the buyout process went smoothly and allowed her to move into the home of her choice in Woodland Trails North less than ten minutes from her home that flooded near Antoine Drive and White Oak Bayou in northwest Houston.  “I found out about the program when I went to get my flood permit in order to start reclamation,” she recalls. “I found out that our house was in a floodway. My husband and I were living in a motel with my son, his wife and two grandchildren for three months.  I did my research and felt that the buyout was the best decision for our family.”

“They packed me up, provided an 8 x 10 poly shed for storage while we waited and then they moved us,” says Ms. Houston.  “I felt that my family’s needs were respected and the County helped us find a new home by providing comps and helping us every step of the way.”

Ms. Houston says the process took 18 months, she understood that she was working with the government so patience would be required.  “Many of the homes in my old neighborhood had flooded repeatedly and I could see that my foundation was sinking.  I feel so much safer now that I’m not in the floodplain.”

She did not have to make any changes in her grocery shopping destinations, her doctors or her pharmacy.

Homeowner Al Spencer: “Now I have Peace of Mind”

Buyout participant Al Spencer had a similarly positive experience. His home in Spring near Lemm Gully flooded during Harvey and he decided the buyout was the best option, even though he had flood insurance. “I was on pins and needles all the time, worried about flooding whenever we had a hard rain,” Spencer recalls. “Now I have peace of mind.”  The entire process took less than a year and his family has been relocated to a new home that’s not in the floodplain and still only 15 minutes away from his old neighborhood.

The ULI report suggests some emerging tools and partnership models that can potentially offer strategies to speed up funding availability and advance buyout projects more quickly. Disclosure requirements may also reduce the likelihood that properties are sold before completing a buyout process.

In New Jersey, the Blue Acres buyout program leverages other funding sources for its support. There have been cases where the state was able to purchase the property using state funds rather than local funds which offers a path forward to help the property owner and create a more comprehensive buyout area.  Another example, from the city of Houston’s resilience strategy, calls for the creation of a Community Buy-In, Buy-Out Property Swap Program. Citing the limitations of a federal buyout programs, the city will coordinate with partner agencies to create a voluntary program for low- or moderate-income homeowners within the floodplain to buy into and relocate to new, refurbished or relocated homes with lower flood risk within the same community. Acquired lots through the Buy In/Buy Out program will be used for flood reduction and offer public amenities.

The buyouts are based on pre-flood market values (during disaster events), and property owners have final decision-making power on participation.  Even if they agree to the buyout, time is not on their side. Some families aren’t able to wait 18 months for a buyout and may go ahead and sell to an investor.  If the investor rebuilds, and the area floods again, the cycle continues.

43,000 Buyouts Since 1990s

Since the early 1990s, around 43,000 federally funded buyouts have taken place and most are of single-family residential properties. The buyouts shave taken place in every state, with the exception of Hawaii and the number of flood buyouts has been increasing in urban counties. There have been some multifamily, commercial and industrial properties that have been voluntarily sold.

“The majority stay within Harris County, predominantly, 95 percent stay here,” says Wade. “We relocated them where they wanted to go, but often, their job is here, their community is here so they move to higher land nearby”

“Water is an underappreciated and irreplaceable component of the Texas growth model,” says Gabriel Collins of Rice University’s Baker Institute for Public Policy. “At the same time, significant droughts in the state are a question of ‘when,’ not ‘if.’ Water policy can certainly wait until a more sustained supply crunch emerges and then respond reactively. But it is far better to address a known risk in a proactive manner — one that builds in the time and space needed to craft solutions and create the legal, market and physical infrastructure needed to implement them over decades.”

In 2017, four of 10 U.S. households were not prepared for an emergency $400 expense, let alone the significant potential costs of a flooded home, according to news reports.  That finding was mirrored in the Kinder Institute Study by Stephen Klineberg at Rice University. Low- income households are less likely to have funding for temporary lodging or rebuilding and far less likely to have the flexibility and means to evacuate in times of a flood emergency.

For Wade, the toughest part is the timing of the funding.  “It takes a long time to write the grant, to submit, for the state and feds to approve it and explaining all of that to a family that’s in shock from invasive floodwaters is challenging,” he says. “We’ve been successful getting grants, but it takes 18 months to get them.  If we could get funding quicker, we’d be much more successful.  But obviously we don’t have half a billion sitting around locally. There’s not a federal program designed for disaster response; it is all designed to mitigate the next event.  We need a program designed to mitigate immediately. I’ve been talking about it since I’ve been around.

“Harris County didn’t get floodplain maps until about 1985,” Wade says. “The fact was a lot of the development that we have to mitigate happened in areas deep, deep in the floodplain. There was no regulation until about 1985.  The rules have changed over time.”

Karen Culler Smith, who served as Assistant Director at Houston Parks & Recreation over grants, legislation and development was an eyewitness to those earlier days. “The buyouts are great for creating parkland in areas that otherwise had very few parks,” says Culler Smith.  She worked with both the Houston Parks Department and as Project Manager in Environmental Services at HCFCD for many years and observed the ongoing repercussions of development and in some cases, what happened when developers actually marketed homes for their proximity to the bayou.

She notes that not all the buyouts are of homes. Some are commercial properties.

Some Home Owners Associations are opposed to the buyouts because the process takes the flooded properties off the tax rolls and they lose the monthly fees payment. In Texas, Home Owners Associations have a great deal of authority and some say HOAs are too powerful.

Hurricane Harvey: 50 Inches of Rain = 100,000 Flooded Homes

More than 100,000 housing units were damaged in Harvey. “Disasters are not rare events, we’ve had six 500-year events in last 10 years,” says Ben Hirsch, Director of Strategic Partnerships at West Street Recovery in a recent panel led by the Kinder institute of Urban Research in Houston. “There needs to be more community level preparedness We need to be working to identify the people who are most vulnerable and provide them with resources to survive. I know that sounds bleak and is not the optimistic Houston Strong narrative, but if health disasters can be minimized, if you need battery powered equipment to maintain a medical device, that really needs to happen. We need gray and green infrastructure. It’s clear flooding is biggest threat. The storm last night had no name and in two weeks, no one will remember it.  We need the county to make good on their promise on the flood bond.  When we build homes, we need to put in tile floors, put in more hard wood, which is mold resistant, elevate electrical outlets.

“Now, more than ever, building city resilience makes sense. Working with cities to create prosperous, equitable, and safe urban environments while prioritizing access to healthcare for vulnerable populations is a key driver for us. We are committed to growing the practice of urban resilience across the globe in a way that it accrues social, economic, and political capital, making our cities thrive.”

What are the possibilities for the flood-prone land reclaimed by buyouts?

ULI suggests the land can be used as enhanced open space: Bought-out properties, considered either as individual parcels or at larger, multi-parcel scales, can offer a range of benefits to both the ecosystem and community residents, with an eye toward flood resilience, including offering aesthetic value, restoring ecological function, creating natural flood buffer zones, and offering recreation and educational opportunities.

What are the next steps for advancing the buyout programs and improving the results for the entire community?

“As we continue to promote the report findings with ULI members, District Councils, city representatives, and other partners, we are eager to begin brainstorming to design engagements tailored to specific communities’ resilience goals, and/or connecting buyouts with related topics like climate risk, migration, climate gentrification, etc.,” says Leah Sheppard, Manager of Urban Resilience at ULI.


July 14, 2021 Realty News Report Copyright 2021

For more about Texas real estate, check out the book Houston 2020: America’s Boom Town – An Extreme Close Up  by Ralph Bivins. Available on Amazon  http://tiny.cc/4a2g6y  

Houston 2020 Ebook version  https://tinyurl.com/4xm7z8b5       


Photo: Houston in Hurricane Harvey Aug. 2017. Photo credit: Ralph Bivins, Realty News Report. Copyright 2021


File: Buyouts Transform Flood Prone Neighborhoods

 

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