Bloomberg highlights 44,000 homes have been purchased
Bloomberg reported last week that 44,000 homes have been voluntarily purchased by FEMA in flood-prone areas, but the concern was that millions more could be at risk in “FEMA Bought 44,000 Homes in Flood Prone Areas. They May Have to Buy Millions More.”
“How does this impact Central Ohio? Delaware was named the number four place to live recently and those factors along with a relatively moderate climate in regards to large-scale natural disasters that will make it a place for climate refugees to set up shop”.– Toby Boyce
The climate has changed and created stronger storms and more of them. Which is battering the coasts and leading to issues that could in time possibly make the areas along the coast uninhabitable. Which is where Bloomberg is arriving at the millions of homes number. A stretch, so far as, entire counties will be left vacant. Forced buyouts are very rare in the United States and bluntly put — people don’t like them. However, two key points came out of the article for me:
- It takes about six years to complete a buy out.
- Buyouts, when offered, are being in done disproportionately in higher-income suburban settings
So people that suffered through Hurricane Issac and its $3.1 Billion in damages are finally able to put the buy out process behind them after being hit in July 2012. That’s a long time to be waiting as the mortgage still needs to be paid. Lori Rittel was introduced to America in an interview on NPR’s Here & Now “‘Climate Migrant’ Left Montana To Avoid Snow, Only To Endure Hurricane Devastation In Florida Keys” in October. She is looking at another four years living in unsanitary conditions — assuming the government sticks to its average timeline — before the government will approve her for the buy-back program or not. And if we factor in more requests to the program from more damage then that backlog could go up. So she sits in limbo. Can’t fix it due to the city saying property is too damaged to be repaired. Can’t leave it because the mortgage company still expects her to pay every month.
There was a similar situation in Delaware County when one of the homes along State Route 257 at US 36 went into foreclosure about a decade ago. The bank tried to sell it until the price of flood insurance essentially made the land and house worthless. It was donated to the county, used for various trainings, and razed. I project that this is how a lot more of these transactions are going to be completed.
Hurricane hits South Carolina and home is destroyed and it will cost more to rebuild the home than owner can afford. So owner gives the keys to the bank and walks away. Bank now has to figure out how to address the situation and a very easy one would be to donate to the community’s land bank and allow them to raze the property.
So FEMA will not technically, buy the properties but will have them stored in county land banks or whatever is deemed appropriate.
As to the part about home being purchased more prominently in the suburban upper-middle areas than in rural or urban settings. I want to say race and location are not an issue, but then look at the news and it still is. Though in this case, I’m wondering if the data more reflects the situation above where the poor are choosing to walk away at a higher rate than those that achieve the buyback. Not enough data to really make a determination other than this is a challenge.
So how does this impact Central Ohio? Delaware was named the number four place to live in a recent report. It is those type of factors across the entire central Ohio demographic that will lead to more of these climate transplants setting up roots here.
Or that’s my two cents.
Toby Boyce is the president and Broker for C.G. Boyce Real Estate Co. Toby was honored in 2015 for as one of the first 300 REALTORS in the nation (only 1.4 million) to earn the “Commitment 2 Excellence” Award from the National Association of REALTORS. He has earned several real estate designations that benefit his clients every single day.