Residential perspectives: the value of Floodplain‐ buyout open space

Any entity offering flood insurance, whether it is private or government‐administered such as the National Flood Insurance Program (NFIP), faces the challenge of solvency. This is especially true for the NFIP, where homeowner affordability criteria limit the opportunity to charge fully risk‐based premiums. One solution is to remove the highest flood risk properties from the insurer's book of business. Acquisition (buyout) of flood‐prone structures is a potentially permanent solution that eliminates the highest risk properties while providing homeowners with financial assistance to relocate in a less risky location. To encourage participation, homeowners are offered a preflood fair market value of their damaged (or at risk of damage) structures. Although many factors have been shown to affect a homeowner's decision to accept an acquisition offer, very little research has been devoted to the influence of price or monetary incentive offered on homeowners' willingness to participate in acquisition programs. We estimate a pooled probit model and employ a bootstrap methodology to determine the effects of hypothetical home price offers on homeowners' acquisition decisions. We do so while controlling for environmental factors, property characteristics, and homeowner sociodemographic characteristics. Results show that price indeed has a positive effect on likelihood of accepting an acquisition contract. Furthermore, estimated homeowner supply curves differ significantly based on the damage status of the acquisition offer, as well as homeowner and property characteristics.

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“…The effect on adjacent property values is mixed. Barnhizer () shows an increase in nearby property values while Zavar () finds no effect.…”

Section: Government Acquisition Of Flood‐prone Propertiesmentioning

confidence: 96%

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Frimpong¹,

Kruse²,

Howard³

et al. 2019

Southern Economic Journal

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“…Nationwide, voluntary property acquisitions (''buyouts'') are playing an increasingly important policy role after flood disasters (Zavar 2015). Through buyout programs, owners of severely damaged properties are offered pre-flood fair market values for their properties, and given an opportunity to move from difficult circumstances (Fraser et al 2003).…”

Section: Federal Programs For Post-disaster Property Acquisitionmentioning

confidence: 99%

Flood recovery and property acquisition in Cedar Rapids, Iowa

et al. 2015

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Voluntary property acquisitions are playing an increasingly prominent role in the aftermath of US flood disasters, as policy tools for community recovery and hazard mitigation. Following historic flooding in 2008, the City of Cedar Rapids, Iowa, instituted a federally supported program for the acquisition of over 1300 damaged properties. Using Cedar Rapids as a case study, this article investigates post-flood property acquisition from the perspectives of cost effectiveness and social equity. To assess economic viability, a benefit-cost analysis was performed at the parcel scale. Social equity was assessed using a social vulnerability index tailored to flood recovery. The results indicate that the property acquisitions are cost effective based on the avoidance of future flood losses, and prioritize socially vulnerable neighborhoods. The dual economic and social analysis sheds light on the capacity of federally supported buyouts to support holistic post-disaster planning and decision-making.

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“…Retreat (sometimes called abandonment ) typically occurs using construction setbacks (requirements to move construction away from hazard areas) and public land buyouts (Zavar, ). Strong evidence suggests that long‐term losses of shorefront development can only be avoided if retreat is incorporated into adaptation measures (Moser, ).…”

Section: Overview Of Climate Adaptation Policiesmentioning

confidence: 99%

Fighting the inevitable: infrastructure investment and coastal community adaptation to sea level rise

Woodruff

BenDor

Strong

2018

System Dynamics Review

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Coastal communities are crafting adaptation strategies to confront sea level rise (SLR). Unfortunately, cost-benefit analyses that assess SLR risks often fail to capture important political and social feedbacks. For example, adaptation measures (e.g., beach nourishment) can trigger greater development, undermining the value of adaptation infrastructure, incentivizing development, and increasing risks. We integrate diverse literature and data to develop a hypothesis and system dynamics model of coastal community responses to SLR. We apply the model to two U.S. communities, showing how political influence drives trajectories of infrastructure provision, cost, and vulnerability. We find that delayed feedbacks between perceived SLR risk and infrastructure investments mediate relationships between political capital, migration, and economic development. Community wealth and political influence may only delay the overshoot and collapse of its population and economy, as the "virtuous cycles" linking growth with infrastructure investment give way to "vicious cycles" of mounting infrastructure costs, political resistance to additional investment, and greater vulnerability.

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Residential perspectives: the value of Floodplain‐ buyout open space

Cited by 35 publications

References 10 publications

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Flood recovery and property acquisition in Cedar Rapids, Iowa

Fighting the inevitable: infrastructure investment and coastal community adaptation to sea level rise

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