The Miami Herald ran two articles (both behind paywalls/titles listed below) on Sunday that discussed how the Florida Keys and Miami-Dade County are managing properties targeted for buyouts due to storm surge and sea level rise flooding. The Florida Keys is making some slow process in purchasing distressed properties, while Miami-Dade County has dropped the ball completely. In both locales, some owners dazzled by rapidly appreciating real estate prices have resorted to selling properties to buyers after applying to buyout programs, which, unfortunately, puts the new buyers, wittingly or unwittingly, at risk of flooding complications.
Thousands of US coastal properties have been purchased through government buyouts over the last decade, and the trend is accelerating as the sea level rises. Often the buyouts occur after hurricane storm surges (which are growing more powerful and damaging as sea level rises) flood neighborhoods. Buyouts are also becoming more common in areas that experience so-called rainy day or nuisance flooding due to much higher than normal tides.
National and state governments are eager to remove properties that require frequent, expensive repair or replacement from repeated flooding from the insurance rolls. They also want to avoid the expense of maintaining critical infrastructure — such as roads, sewer and water systems, and storm drains — in flood-prone areas.
After Hurricane Irma sent a powerful and devastating storm surge into some of the Florida Keys in 2017, Monroe County acquired federal funding to buyout damaged and flood-prone properties. The county received 80 applications from real estate owners and has purchased nine properties. County officials hope to buy another dozen soon.
According to the Miami Herald article, one massive roadblock that has prevented more purchases is rapid appreciation in the housing market over the last couple of years. In some cases, owners who had agreed to the buyout and demolition of their frequently-flooded properties decided instead to sell them for prices higher than they would have received under the buyout program. To remedy the situation, the county has received permission to offer more money for properties from the state agency that’s coordinated the buyout funds.
Miami-Dade County initiated a similar buyout program, but in three years the county hasn’t purchased a single one of ten properties that were targeted by buyouts. The lack of performance has led to the state administrative agency taking back the funds that were to be used for the purchases. Some of the buyout eligible property owners are angry that the county failed to complete the purchases as promised. In one instance, a developer has purchased a flood-prone property with the intent of constructing an 11-unit building on the lot. The developer was unable to tell the county what steps it would take to flood-proof the property but the county approved the project anyway.
Buyouts are controversial but necessary in areas where properties cannot be protected from storm surge and sea level rise flooding. Buyout opponents believe no matter how many times a property floods, insurers and governments are responsible for helping them to repair the damage and maintain roads and water and sewer service. Proponents, however, recognize when the battle is lost and they appreciated the government assistance when they’re ready to move on.
The current situation where some homes targeted for buyouts are actually purchased and demolished while others are being sold to buyers with or without them being aware of the property’s flood status needs to be addressed. The fact is each state has its own seller disclosure laws, so too often buyers are left in the dark about the level of threat posed by storm surge and sea level rise flooding. Until this unfair situation is resolved, buyers need to gather information from more than just sellers to ensure they’re not purchasing a property that was targeted for a buyout unless they’re prepared to accept the risk that their investment will literally end up underwater.
Editor’s Note: Here are the paywall protected article titles “Miami-Dade failed to buy flooded homes; Now high-risk sites open to more development” and “Buyouts take flood-prone Keys properties off the market. There are more sellers waiting”.
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