New Analysis Finds Voluntary Buyouts of Flood-Prone Properties Are a Critical Step to Protect Our Communities
WASHINGTON, D.C. – December 12, 2013 – (RealEstateRama) — With sea levels anticipated to rise at accelerated rates and catastrophic flood events occurring at great frequency, the Center for American Progress released an analysis of the value of a coastal buyout program both to communities and the environment.
“Buyouts turn floodplain lands from a massive federal liability into a valuable community asset,” said Shiva Polefka, author of the brief and Research Associate for the Ocean Policy program at CAP. The National Flood Insurance Program, or NFIP, contributes $28 billion to the U.S. debt, an amount that will increase as coastal flood-insurance policies are projected to grow 130 percent by the end of this century.
Flood-Prone Properties in
Flood-Prone Properties in
Voluntary buyouts are not new. Most recently since Hurricane Sandy, large-scale efforts by New York and New Jersey allocate disaster-relief aid for thousands of properties in the coastal floodplain that are susceptible to repetitive loss.
The brief discusses public buyouts as one important way that coastal communities can become more resilient to climate change and the impacts of rising sea levels. For every dollar spent on hazard-mitigation activities, the U.S. economy saves $4 in societal losses from future disasters and the U.S. Treasury saves $3.65 from avoided federal disaster-recovery expenditures and lost tax revenues. Thus, all preparedness activities need to be on the table.
Evidence from smaller-scale buyout programs around the United States show that these investments pay for themselves in avoided recovery costs from future floods, usually well within 10 years. They also provide an array of public benefits, including buffering against future floods, creating valuable recreational space, and enhancing wildlife habitat.
In order to realize the benefits of larger-scale buyouts across America’s coastal floodplain and help adapt the U.S. coastline to the dramatic rise in sea level predicted for the century ahead, the brief recommends:
- Congress should preserve the 2012 NFIP reforms so that price signals from premiums accurately reflect worsening flood risks. New legislative efforts on the NFIP should focus on mitigating the reforms’ immediate and short-term costs to low-income coastal residents rather than modifying the important 2012 reforms.
- State and federal decision makers should implement policies that increase voluntary buyouts of coastal properties in the most flood-prone areas. This could include authorizing and investing in buyouts of high-risk properties in advance of flood disasters and, when appropriate, allowing federal aid to be used by states to complete buyouts above the existing 75 percent cap on federal contributions.
- Lawmakers, regulators, and program managers should collaborate to develop, evaluate, and institutionalize innovations in property buyouts where appropriate—such as New York State’s buyout price bonuses—to address specific social and land-use challenges and maximize their fiscal and environmental benefits.
The brief acknowledges recent bipartisan legislation—the Biggert-Waters Flood Insurance Reform Act of 2012—as an important step to reduce the taxpayers’ burden for the liability of the NFIP and continue to update the flood-risk maps that are integral to understanding the hazard zones faced by homeowners. It further conveys that affordability for low- and middle-income families should be addressed while preserving the substance of the law’s reforms.
Read more of CAPs analyses on Superstorm Sandy and climate resiliency here.
Read the issue brief: Moving Out of Harm’s Way by Shiva Polefka
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