by Ben Finlay
Chuck and Terry Nowicci lived in their country-style farmhouse with a wrapped porch for 36 years before flooding. After Hurricanes Matthew and Florence, he said “yes” to the state’s offer to buy his place and tear it down.
Even after three years, they are still waiting for the money. What’s worse, they say it is to the value of the home before the storms hit in 2016 and 2018. Now they worry they won’t be able to buy a home with the federal disaster dollars they’ll get.
“It will be money compared to the market,” said Terry Nowickey, of the couple’s home outside the town of Lyndon, about 15 miles (25 kilometers) north of Fayetteville, North Carolina. “I’ve seen housing prices go from an upper $200,000 to $350,000 to $450,000 in the past year.”
Warming real estate markets have cautioned some homeowners from participating in voluntary flood purchase programs, stifling efforts to shield people from flooding from rising seas, stronger storms and more frequent storms.
Flood purchase programs typically buy flood-prone homes, demolish them and convert the property into green space. This can help prevent flood deaths and health problems, such as mold-related respiratory problems and emotional trauma.
With government payments and federal flood insurance — sometimes multiple times — buyouts are considered cheaper for taxpayers than repair and rebuild flooded homes.
Programs are run by local and state governments that often use grants from federal agencies. The Federal Emergency Management Agency says it has provided nearly $3.5 billion over the past three decades to help communities acquire about 50,000 assets.
“It’s basically the tool we have right now to help get people to a safer place,” said Anna Weber, a senior policy analyst at the Natural Resources Defense Council. “And so it should work as well as possible.”
But in some cities, interest in voluntary programs has waned in the face of rising house prices. Some states are even offering additional funding to persuade people to move out of harm’s way.
People who take out buyouts usually want to move to similar homes on higher ground in the same community. But some people worry that buying dollars won’t be enough. Others reject them because the offers from private buyers were too good to turn down. Homes remained occupied – and at risk.
While experts say the housing market is cooling off with rising interest rates, the challenge of finding affordable homes is likely to get worse.
Jesse M., a real estate professor at Tulane University’s School of Architecture. “Replacement housing will only become more expensive because rising water often means more competition for less habitat,” Keenan said. “Nothing will be easy. Nothing will be cheap.”
The concern about finding affordable homes outside flood-prone areas is nothing new, said Miyuki Hino, a professor in the University of North Carolina’s Department of City and Regional Planning.
Programs have traditionally struggled to help everyone move to equal housing, especially for those on low incomes. Rising housing prices have shed more light on the borders.
“Typically, they weren’t designed from the start with the idea, ‘How does this house end up in a better place in the end? Hino said. “The focus is on removing buildings from the floodplain.”
Buyout offers can be based on the fair-market value of the home as well as its pre-hurricane value. The latter typically stems from the belief that a home is worth less because it has been damaged. But rising home prices compounded that notion, while raising concerns about the often years-long wait for FEMA dollars.
FEMA press secretary Jeremy Edwards said in a statement that the process could be lengthy, in part, because the agency must determine that a purchase is cost-effective and complies with environmental and historic preservation requirements.
Edwards also noted that FEMA now allows increased payments of up to $31,000 to help homeowners looking for comparable housing.
Democratic US Reps. Sean Castane of Illinois and Earl Blumenauer of Oregon introduced legislation last month designed to reduce wait times and provide more support.
“The science makes it clear that this climate-driven catastrophe will only get worse and more costly,” Kasten said.
In the meantime, the Nowiskis are waiting to know how much money they will get for the purchase they agreed to in 2019.
Retired and in their mid-60s, they want to stay local without taking a mortgage. His daughter is nearby, and he also has a non-profit ministry to help troubled boys.
They are now considering selling the “house flipper” or simply living in their home, which is near a tributary of the Cape Fear River.
North Carolina Emergency Management, which handles the buyout program where the Novisskis live, said in an email that a state fund provides up to $50,000 to help people find similar homes when federal grants aren’t enough.
Agency spokesman Keith Acry acknowledged that buying through federal programs can be a lengthy process.
“Homeowners who want to move out of a property quickly will often pursue other methods, if they have the means,” he said.
Other states are also offering funding on top of federal disaster dollars. In response to rising home prices, the South Carolina Office of Resilience teamed up with coastal Horie County to create a “market adjustment incentive” in February, said Ran Reinhard, the office’s mitigation director.
Incentives range from $10,000 to $50,000 on top of the pre-hurricane home value offered by the buyout program. Looks like it makes a difference.
Twenty-seven resolutions have been made, and 21 homeowners have signed so far.
“We wanted to make it so that a homeowner could stay within a homeowner and their community,” Reinhardt said.
But in some areas, the housing market has been so competitive that private buyers have bid outside the government – even when it offers a fair market value.
North Carolina’s Mecklenburg County, which includes the city of Charlotte, is one such place. It created its own self-funded program to move people away from the Catawba River and other waterways that could be washed away by heavy rains.
Rising home prices are not making it any easier. For example, the appraised purchase price of a Charlotte home increased from approximately $250,000 in 2020 to approximately $325,000 at the end of 2021. The property was purchased by a private buyer who, county officials believe, was as high as $100,000 at the asking price.
“I’ll tell you it’s probably twice as hard to get to the closing table on floodplain purchases,” said Dave Canaan, county director of Storm Water Services, before stepping down in early June.
In Chesapeake, Virginia, no one participated in the buyout event last year, said Rob Bradwood, coordinator of emergency management.
Many of the older homes were built along the Elizabeth River and tributaries that are drained by heavy rains and storms that push water from the Chesapeake Bay.
Bradwood said there is a fading sense of urgency since the last major flood occurred in 2016. Another problem is the waiting time for FEMA money and the extent of its grant. Rise in home prices is also likely to be to blame.
“We do this about once a year, where we call everyone who comes to the floodgates. And we just hear the cricket coming back,” Bradwood said.
Joseph Noble, whose North Carolina home sits near a tributary of the Neues River, declined a FEMA-funded purchase offer after flooding twice in 2016.
He said the money wasn’t enough to buy a similar home nearby—and that was before prices heated up in the small town of Kinston, about 80 miles (130 kilometers) southeast of Raleigh.
It worries about what kind of buyout offer it will get if the floods hit this year.
“All it takes is a good storm that goes our way,” Noble said.