Housing market slows retreat from rising seas and bigger storms | News from North Carolina

By BEN FINLEY, Associated Press

Chuck and Terry Nowiski lived in their cottage-style farmhouse with a wraparound porch for 36 years before it was flooded. After Hurricanes Matthew and Florence, they said “yes” to the state’s offer to buy and demolish their home.

Almost three years later, they are still waiting for the money. What’s worse, they say it’s for the value of the home before the storms of 2016 and 2018 hit. Now they worry they can’t buy the house they want with the federal disaster dollars they’re going to get.

“It would be pennies compared to the market,” said Terry Nowiski of the couple’s home outside of the town of Linden, about 15 miles north of Fayetteville, North Carolina. “I’ve watched house prices go from the top $200,000 to $350,000 to $450,000 over the last year.”

Hot real estate markets have deterred some homeowners from participating in voluntary flood buyout programs, impacting efforts to save people from flooding from rising seas, intensifying hurricanes and more frequent storms.

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Flood buyout programs typically buy flood-prone homes, demolish them, and turn the lot into green space. This can help prevent flood-related deaths and health problems, such as: B. mold-related respiratory problems and emotional trauma.

Buyouts are also seen as cheaper for the taxpayer than repairing and rebuilding flooded homes — sometimes multiple times — with state payouts and federal flood insurance.

The programs are administered by local and state governments, often using grants from federal agencies. The Federal Emergency Management Agency says it has allocated nearly $3.5 billion to help communities acquire nearly 50,000 properties over the past three decades.

“This is basically the tool we have now to help people move to a safer place,” said Anna Weber, senior policy analyst at the Natural Resources Defense Council. “And so it should work as well as possible.”

But some cities have noticed a waning interest in voluntary programs as home prices rise. Some states are even offering extra money to persuade people to move out of harm’s way.

People doing buyouts typically want to move to similar homes on higher ground in the same community. However, some fear the buyout dollars won’t be enough. Others turn them down because the offers from private buyers were too good to turn down. The houses remained occupied – and endangered.

And while experts say housing markets are cooling as interest rates rise, the challenge of finding affordable housing is likely to become even greater.

“Replacement homes only get more expensive because rising water levels often mean more competition for fewer homes,” said Jesse M. Keenan, real estate professor in Tulane University’s School of Architecture. “Nothing will be easy. Nothing will be cheap.”

Concerns about finding affordable housing away from flood plains aren’t new, said Miyuki Hino, a professor in the University of North Carolina’s Department of Urban and Regional Planning.

Programs have traditionally struggled to help everyone move into similar housing, particularly those on lower incomes. Inflated property prices have put more of a spotlight on the restrictions.

“Generally, they weren’t designed from the start with the idea, ‘How can this household end up in a better place?'” Hino said. “The focus was on removing the buildings from the flooded area.”

Buyout offers can be based on a home’s market value as well as its pre-storm value. The latter generally relies on the assumption that a home is worth less because it has been damaged. But rising home prices made that assumption difficult, while also heightening concerns about the often year-long wait for FEMA dollars.

FEMA spokesman Jeremy Edwards said in a statement that the process can be lengthy in part because the agency must determine that a buyout is cost-effective and meets environmental and heritage protection requirements.

Edwards also said FEMA is now allowing an increased payment of up to $31,000 to help homeowners find comparable housing.

Democratic US Reps Sean Casten of Illinois and Earl Blumenauer of Oregon introduced legislation last month aimed at reducing wait times and offering more assistance.

“The science makes it crystal clear that this climate-related devastation is only going to get worse and more costly,” Casten said.

Meanwhile, the Nowiskis are waiting to hear how much money they’ll get for the acquisition they agreed to in 2019.

You are retired and in your mid-60s and want to stay local without taking out a mortgage. Her daughter is nearby, as is her community service to help boys in need.

They are now considering selling to a “house flipper” or just staying in their home, which is located near a tributary of the Cape Fear River.

North Carolina Emergency Management, which administers the buyout program where the Nowiskis live, said in an email that a state fund is providing up to $50,000 to help people find similar homes when state grants are not sufficient.

Keith Acree, a spokesman for the agency, acknowledged that federal program acquisitions can be a long process.

“Homeowners who want to get out of a property quickly often pursue other methods when they have the means,” he said.

Other states are also offering money on top of the federal disaster dollars. In response to soaring home prices, the South Carolina Office of Resilience partnered with coastal Horry County to create a “market adjustment stimulus” in February, said Ran Reinhard, the bureau’s mitigation director.

The incentive ranges from $10,000 to $50,000 in addition to the pre-storm home value offered by the buyout program. It seems to make a difference.

Twenty-seven bids have been made and 21 homeowners have signed up so far.

“We wanted to make it possible for a homeowner to remain a homeowner and in their community,” Reinhard said.

But in some areas, the housing market has been so competitive that private buyers have outbid the government — even when it offers fair market value.

Mecklenburg County, North Carolina, which includes the city of Charlotte, is one such place. It has created its own self-funded program to move people away from the Catawba River and other waterways that can overflow during heavy rains.

Rising real estate prices are not making it easy. For example, the estimated purchase price of a home in Charlotte rose from about $250,000 in 2020 to about $325,000 at the end of 2021. The property was then purchased by a private buyer for up to $100,000 over the asking price .

“I’d tell you it’s probably doubly hard to get to the closing table on floodplain acquisitions,” said Dave Canaan, the county’s director of stormwater services, before stepping down from the position in early June.

In Chesapeake, Va., no one participated in the buyout program last year, said Robb Braidwood, emergency management coordinator.

Many older homes were built along the Elizabeth River and its tributaries, which swell from heavy rains and storms pushing water out of the Chesapeake Bay.

There is a fading sense of urgency since the last major flood occurred in 2016, Braidwood said. Another concern is waiting times for FEMA funds and the limits on their grants. Rising house prices may also be to blame.

“We do that once a year where we call everyone who’s flooded,” Braidwood said. “And we only hear crickets back.”

Joseph Noble, whose North Carolina home is near a tributary of the Neuse River, turned down a FEMA-funded takeover bid after it was twice flooded in 2016.

He said there wasn’t enough money to buy a similar home nearby — and that was before prices warmed in the small town of Kinston, about 80 miles southeast of Raleigh.

He worries about what kind of takeover bid he would get if he gets swamped this year.

“All it takes is one good hurricane going our way,” Noble said.

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