What Happens When FEMA Buys Your House?
It’s been a rough hurricane season. Between them, Hurricanes Helene and Milton have devastated many communities throughout the southeast. Rebuilding what was lost will take years.
But as devastating as these storms have been, they are sadly not unique. Property damage from storms and flooding is on the rise. Storms resulting in over a billion dollars in damages have become more frequent in recent years.
The prospect of repeatedly having to rebuild properties in storm-prone areas has led some governments to pursue an unusual solution to the problem: buy the properties themselves. Some local governments, in partnership with federal agencies such as the Department of Housing and Urban Development (HUD) and the Federal Emergency Management Agency (FEMA), have developed programs that use disaster relief funds to purchase homes in flood- or storm-prone areas. This isn’t the only way, or even the best way, to reduce the destruction from increasingly severe natural catastrophes. But the idea is that keeping such vulnerable properties vacant will save money in the long run because they won’t need to be continually rebuilt after storms.
Such buyouts are hardly ideal and can lead to some perverse situations. In 2021, an NPR investigation revealed that HUD was selling homes in flood-prone areas to unsuspecting buyers even as it was buying out homes in the same neighborhoods under a flood mitigation program. While not ideal, in a world where government disaster relief is a given, a voluntary buyout program could make fiscal sense in some circumstances. Voluntary buyout programs have been implemented in over a thousand counties and have been used to relocate almost 50,000 households throughout the country.
The situation is very different when the buyout ceases to be voluntary. A little-known provision in the Hazard Mitigation and Relocation Assistance Act of 1993 authorizes local governments to implement a mandatory buyout program for flood-prone areas. So far, just three localities—Cedar Rapids in Iowa, Minot in North Dakota, and Harris County in Texas—h
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