Are business takeovers a viable tool for climate adaptation?


Are business takeovers a viable tool for climate adaptation?

by Elise Goutte
|June 29, 2021

By the turn of the century, 13 million Americans could be displaced by rising sea levels. At the Managed Retreat conference recently hosted by Columbia Climate School, photographer Michael Snyder shared this image showing what the Chesapeake Bay area would look like with a sea level rise of six feet.

After a disastrous flash flood that flooded Allegany County, Maryland, in June 2014, the owner of Garden City Mobile Home Park filed a request to add his land to the state buyout list. Now, about seven years later, the county is purchasing seven acres of the 11-acre property and relocating 28 tenants out of the floodplain.

Similar buyback programs are taking place across the country as climate change increases the frequency and severity of extreme weather events. At the end of the century, 13 million Americans could be displaced by sea level rise alone. But while the need for adaptive solutions is clear, questions remain as to where buybacks can and should fit.

From June 22 to 25, stakeholders from around the world discussed the role of buyback programs at the Columbia Climate School conference, “At what point in the managed retirement? Resilience, relocation and climate justice. “During the roundtables, participants agreed that if buybacks are to function as a fair and effective managed retirement tool, they have a long way to go, especially in responding to the scale of climate-driven migration expected in the country. decades to come.

How buyouts work

At first glance, buyback programs seem like a straightforward proposition. A resident whose home is increasingly vulnerable to the impacts of climate change agrees to sell his property to his local government and move out. Within this proposal, however, is a web of complex decision-making for landowners and program practitioners.

“It’s not just about buying a particular property on a particular piece of land,” said Matthew Fuchs, who works with the Pew Charitable Trusts Flood Prepared Communities Initiative. “You talk about all the things that make up a community – social networks, economic networks, transportation, supply chains. “

The administration of a buyback program requires complex coordination at all levels of government. Local officials work with community members to develop and submit a grant application to their state risk mitigation officer. States review these requests and then forward them to the Federal Emergency Management Agency, or FEMA, for approval.

A map of where the FEMA buyouts took place

A map of where the FEMA buyouts took place, from a presentation by Caroline Kraan of the University of Miami.

FEMA is the federal government’s primary vehicle to support buyouts. The agency does not have a specific amount of money earmarked for the acquisition of local properties, but rather provides states with grants from two compartments: pre-disaster funding and post-disaster funding. Once FEMA approves an application, these federal funds can be used to fund up to 75 percent of a project. The remaining 25 percent must come from the state, county or locality – one of the many barriers that prevent communities from considering buybacks in the first place.

“A lot of the issues we are having relate to community membership,” said JaLeesa Tate, the Maryland State Risk Mitigation Officer who is overseeing the Garden City Mobile Home buyout. “Especially in our low-resource communities, there are many concerns about how they can provide this non-federal share. [of funding] for FEMA grants.

The application process is also time consuming, forcing local governments to have enough staff with the right mix of expertise. On average, it takes about 15 months for a property acquisition application to move from local government to state to federal government, according to Eric Letvin, director of risk mitigation and risk reduction policy for the city. FEMA. In some cases, the local government will spend years building partnerships within the community and participating in community-led planning processes before submitting its request to the state, as was the case with the buyout of the Garden City Mobile Home park. FEMA approval of funds can then take up to four additional months. “We would definitely like to see that number drop,” Letvin said. “Especially in the post-disaster environment [when] people’s homes are damaged and they want to get out.

Letvin estimates that over the past 40 years, FEMA has spent $ 3.4 billion on approximately 48,000 successful buyouts in the United States, a tiny number compared to the 14.6 million properties currently located in the centennial flood zone. By 2050, that number is expected to reach 16 million properties, according to the First Street Foundation research group.

Who has access

FEMA-funded buyback programs have mostly took place in the wealthiest urban counties – or, as AR Siders of the University of Delaware puts it, the counties best positioned to “play with the system.” Buyouts in these richer counties are then concentrated in neighborhoods with lower average incomes and greater social vulnerability.

Linda Shi, with research at Cornell University’s focus in part on equity buybacks, said there are a number of aggravating reasons why these programs typically serve such a small subset of people. In deciding which properties to include in a buyback program, local governments often rely on cost-benefit analyzes based on the value of the properties, she explained. Homes with lower land values ​​and in greater disrepair are natural candidates for redemption, as their removal reduces the risk to the community and the costs associated with reconstruction.

This use of cost-benefit analyzes to determine the beneficiaries of the buyout raises important concerns for environmental fairness and justice. Low-income communities and communities of color are more often affected by extreme weather events because they suffer from a historic lack of investment in infrastructure. In many cases, the reason these communities – especially indigenous tribes – are on the front lines of climate change is due to forced displacement caused by centuries of racial injustice. Today, faced with increasing climate risks and limited means to adapt, homeowners may have no other option but to opt for a buyout.

The extent to which buyout practitioners consider fairness varies from program to program. All through her researchSiders found that some practitioners choose to prioritize buyouts in low-income areas in order to break the cycle of post-disaster reconstruction. Others explicitly choose not to prioritize buyouts in low-income areas for fear that residents will feel pressured out of their homes or have difficulty finding alternative accommodation in the same community.

“Personal values ​​shape how buyout programs are structured and delivered in a way that really matters to the people who participate in them,” she said.

What’s left

The same goes for people who do not participate in buyback programs. Since the majority of buyouts are voluntary and resettlement is rarely, if ever, offered for entire communities, streets once lined with houses can start to look like rows of jagged teeth.

“What we want when we talk about redemptions – after all the sacrifices – is to leave these restored, beautiful and pristine environments,” Shi said. “But what we often see, if we get buyouts, is a fragmented landscape.”

vacant lot at breezy point

A vacant lot where a house likely stood before Hurricane Sandy hit this area of ​​Breezy Point, Queens. Some residents have chosen to take government buyouts, while others have chosen to rebuild. Photo: Sarah Fecht

The responsibility for maintaining the plots of land after the takeover rests with the local government. For communities with sufficient resources, this represents an opportunity to create protected natural areas or intentional green spaces such as parks. But for communities without these resources, maintenance alone can be a financial burden, especially when coupled with loss of property tax revenue. In study, the researchers found that of the roughly 10,000 plots of land affected by FEMA buyouts between 1990 and 2000, about 35% were left vacant, 20% were turned into parks or recreational trails, and less than 8% were preserved. .

Where to go from here

From start to finish, the implementation of buyback programs as a managed retirement tool is, like managed retirement itself, very controversial. Conference participants agreed that the long-term viability of the policy will largely depend on improving the design of buyback programs and, therefore, improving outcomes for those who participate.

“In the long run, there are intergenerational gains from moving that are possible for some people under a certain set of circumstances,” said Miyuki Hino, assistant professor at the University of North Carolina Chapel Hill. “I think the challenge is to understand who these people are and what support structures should be provided to them. “

One of the recommendations put forward by the Flood-Prepared Communities Initiative at Pew is to create an interagency working group within the federal government that would guide national and local applicants through the buyout process and consult with them on the full range of options available. At the community level, Tate stressed the need for more proactive engagement with residents on the concept of relocation and the value of resident-driven decision-making through exercises such as community vision sessions.

There is also a general need for better housing alternatives. “Deciding not to put more housing at risk can only happen if we create places where people really want to live,” said Micahel Wara, director of the climate and energy policy program at Stanford University. “And these places have to be affordable. “

As the complexity of scaling up a fair managed retirement system looms, Hino is optimistic that more and more people are starting to recognize the possibility of positive relocation experiences. “We can lose things even when we are not physically moving,” she said, “and we can move things without losing them.”


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