This article is part of the Under the Lens series
Dual Crises: Housing in a Changing Climate
Editor’s note: This piece has been adapted from a report by the authors.
Updated Aug. 8 | Enough was enough for Mayor John McCormac of Woodbridge, New Jersey, a New York City suburb on the banks of the Arthur Kill tidal strait that has seen repeat flooding over the last century. In 2012, flooding from Hurricane Sandy had badly damaged around 200 homes in his town, and it was time to think beyond simply rebuilding.
The following year, Woodbridge Township applied to the New Jersey Blue Acres Program, which buys out damaged houses and restores the parcels as natural flood barriers. Less than two years after Sandy, 142 homeowners had voluntarily accepted buyout offers and moved to safer ground.
“Consistent, repetitive flooding, exacerbated by the severity of the storm, led us to realize that people couldn’t keep having this negative quality of life because of where they lived,” Mayor McCormac said last year.
Buyout programs like this one are a cornerstone of “managed retreat,” a strategy used to relocate residents vulnerable to floods, wildfires, and other climate impacts. But we’re not moving fast enough. Instead, the federal government needs a plan to stop population growth in climate-vulnerable areas, coax current residents to safer ground, and plan buyouts for remaining residents.
Our Current Approach to Managed Retreat
Following a large-scale natural disaster, local governments can choose to offer homeowners the value of their houses to move away, rather than rebuild. Most of the funding comes from the federal government, via the Federal Emergency Management Agency (FEMA) and the Department of Housing and Urban Development (HUD), with state and local governments making up the difference and administering the buyout programs.
Over the last 40 years, FEMA has paid to relocate nearly 50,000 American households through buyouts, at a cost of about $3.4 billion, typically a few homes at a time in a piecemeal manner. Woodbridge’s program is one of the more ambitious efforts to date.
Buyouts can lead to a number of positive social and environmental benefits, and from a financial standpoint managed retreat makes a lot of sense. Repeatedly repairing properties damaged by floods and storms costs U.S. taxpayers billions of dollars and places acute financial pressure on FEMA’s National Flood Insurance Program (NFIP). Buyouts end the “repair loop” and cut costs of future disaster recovery efforts. A 2022 study for the U.S. Government Accountability Office, for example, found that 89 buyouts in a Wisconsin floodplain cost FEMA $4.2 million to acquire the properties but avoided $25 million in predicted future losses.
As climate change wreaks havoc on larger swaths of the country, however, our incremental and reactive (i.e., post-disaster) approach to moving people out of harm’s way is becoming unworkable. Either the federal government must step up to more efficiently relocate climate-vulnerable communities en masse, or homeowners will eventually be forced to abandon their homes amid rising waters, likely at a near-total financial loss.
Moving 20 Million People by 2100
Scientists project that sea-level rise alone will force over 13 million Americans to leave their homes permanently by 2100. Add in wildfires, hurricanes, and extreme heat, and we estimate that 20 million people could need to relocate in the U.S. over the coming decades. At the current rate of buyouts—about 1,250 every year—we estimate that it would take 4,000 years to move all these Americans to safety.
Of course, we don’t have that luxury. Instead, there will come a time when the ocean begins swallowing up entire towns. (We can already see the start of this in North Carolina’s Outer Banks, where homes are falling into the Atlantic.)
Waiting till the 11th hour to respond would be tremendously expensive. Research from Industrial Economics and the University of Colorado suggests that without adequate government intervention, coastal property owners will incur about $350 billion in losses from 2060 to 2079 and nearly $900 billion over the following twenty years. Conversely, the study found that proactive adaptation to climate change would cost a fraction as much.
Local governments and residents drag their feet to relocate for several reasons, even when it’s clear that moving now will be less expensive and less chaotic than moving later. For municipalities, notably smaller or poorer ones, losing part of their tax base can pose a significant financial challenge, since these governments are obliged to continue providing costly public services to residents who stay. For homeowners, the prospect of moving away can be gut-wrenching.
“There’s a sense of loss,” says Rutgers ecologist Brooke Maslo, a long-term partner on Woodbridge’s buyout program. “And for people in the neighborhood that are not eligible, seeing the destruction of other [bought-out] houses leads to a sense of abandonment.”
For poorer homeowners, relocating may be prohibitively expensive even when the government purchases the storm-damaged home. That’s because compensation amounts may not cover ancillary expenses like closing costs on a new home, or account for higher interest rates and property taxes.
There are no easy answers for how to coax local governments to part with residents, or how to encourage residents to give up their beloved homes and neighborhoods. But there are also practicalities that favor rebuilding over relocation.
Most buyout funds don’t become available until after a federally declared natural disaster. It can then take years for this money to reach local coffers, and research from the Natural Resources Defense Council shows that it usually takes more than five years after a flood to finalize buyout negotiations with residents. Meanwhile, home repair funds via FEMA’s Individuals and Households Program (IHP) and the NFIP arrive more quickly. As a result, many homeowners give up waiting for a buyout and rebuild their homes instead—sometimes several times—before finally giving up and leaving after a particularly bad flood, resulting in billions of dollars in sunk costs for the government.
Buyout funds are also incredibly complex to administer. Lower-capacity municipalities don’t have the technical expertise or staffing to apply to competitive buyout programs, nor to navigate complex real estate transactions and land acquisitions if they do receive funding. As a result, while better-off or larger communities plan and fund their retreat, smaller or poorer communities struggle to secure federal dollars to move residents out of harm’s way, forcing them to rebuild instead.
Small Native American villages in Alaska and the Pacific Northwest are some of the most climate-vulnerable communities in the United States. But many are stuck in place, as slow-onset climate impacts such as flooding, erosion, and sea-level rise don’t qualify for post-disaster relief. Newtok, an isolated Native Alaskan village on the Bering Sea, decided to relocate in 1994 due to its eroding shoreline. It wasn’t until 30 years later that Newtok received $25 million from the federal government to help make that happen. In Washington state, the Quinault Nation cobbled together state and federal dollars, combined with its own funds, to start its relocation of Taholah village away from the rising ocean, but the project is still short hundreds of millions. If funding comes through, the move may take another decade.
A Better Managed Retreat
With a bit of long-term planning and creativity, we can devise a national managed retreat strategy that isn’t as chaotic, expensive, and drawn-out as the path we’re on now. To start, it’s critical to realize that we won’t need to buy out everyone, everywhere, all at once. Households won’t all relocate to the same place, either. Instead, the federal government, its local partners, and the private sector should work steadily over the coming decades to stem population inflows to climate-vulnerable areas, incentivize current residents to move to safer ground, and proactively plan buyouts.
Moving 20 million people sounds scary. Steadily relocating 250,000 per year until 2100 doesn’t sound quite as daunting, particularly considering that 40 million Americans already move each year (albeit usually within the same area).
“Managed retreat is a long-term game,” says climate researcher A.R. Siders. “It doesn’t need to happen all at once. It needs to happen over 30 years.”
That sort of planning takes staff capacity, and research shows that most jurisdictions don’t have it. Poorer communities of color, in particular, are often situated in the most climate-vulnerable parts of the country but lack the resources to help residents move away.
To that end, the federal government and state governments should provide funding and staff support smaller and poorer municipalities’ planning departments, housing agencies, and other units tasked with long-term resilience. In New Jersey, for example, Blue Acres combined state expertise and experience with the expertise and community ties of local staff to implement Woodbridge’s buyout program.
So, how do we implement a sustained and proactive managed retreat strategy?
First, federal and local governments need to discourage or restrict new residents from making problems worse by moving into climate-vulnerable areas. Florida—the state at greatest risk from sea-level rise and hurricanes—has grown by 3 million residents since 2010. A 2023 analysis found that across the U.S., properties exposed to flood risk alone are overvalued by between $121 billion and $237 billion.
About a third of U.S. states lack disclosure laws that require sellers to make buyers aware that a house is at risk of flooding or has flooded in the past. Meanwhile, FEMA’s outdated and incomplete flood risk maps don’t reflect the nation’s actual and growing climate risk. (The 2021 Infrastructure Investment and Jobs Act did allocate an additional $600 million to FEMA to update its flood maps.) Consequently, many transplants may not know about the climate risks to their new homes. As Brookings Institute fellow and infrastructure researcher Joe Kane puts it, “developers are happy to build on floodplains as long as people pay.”
In addition to state laws, Washington should consider national flood disclosure requirements.
But even when homebuyers are aware of risks, they may not care. FEMA offers heavily subsidized NFIP coverage to all residents in a floodplain, and despite recent efforts to bring rates in line with true risk, the insurance remains heavily discounted. That’s a moral hazard, and it’s time for the federal government to stop offering NFIP to new homeowners in the most dangerous flood zones, or to further increase rates.
Next, we must whittle down the number of people residing in vulnerable areas, to reduce the number of residents who will require buyouts later.
The federal government should work with state and local partners to actively encourage residents to move to safer ground, either by disincentivizing their decision to stay or by making it more attractive to leave.
For starters, the federal government should cap the number of times it offers funds to rebuild homes that have been damaged or destroyed by storms or floods. Those funds should instead be repurposed for buyouts and proactive relocation, with an eye towards covering the full and true costs of a move, and not forcing households to pay out of pocket for ancillary but very real costs inherent in every move. In fact, FEMA has recommended dropping from NFIP coverage any properties that have been repaired four or more times, but that proposal is still pending Congressional approval.
Meanwhile, local governments should use zoning and land-use tools to gradually phase out inhabitation of vulnerable residential areas. “Life estates” allow residents to stay in their homes for the remainder of their lives, but mandate that the house revert to the government thereafter. Rolling easements—which push the limits on construction further inland as sea level rises—may be another tactic for halting new development while providing notice to existing residents to eventually relocate. Pairing these innovations with land trusts, in which a municipality owns the land but the homeowner owns the house, can make relocation easier and limit homeowners’ losses.
In Woodbridge, the city used zoning to convert the land that was bought out into open conservancy areas, preventing future houses from being built there. The city also requires homeowners who remain to elevate their homes if they trigger building design standards through activities like home renovations and sales.
Intermunicipal cooperation agreements and funding arrangements could ease local fears of a diminishing tax base and allow neighboring municipalities to offer relocation options for vulnerable residents. Smaller towns, especially, often discourage buyouts out of concern that a dwindling tax base will cripple their ability to maintain services for those who remain. Could states address this by widening municipal boundaries or putting in place cost-shares between outflow and inflow municipalities?
Inland, cities such as Buffalo, New York, and Duluth, Minnesota, are positioning themselves as climate havens, hoping that an inflow of residents will boost their economies and reverse post-industrial population outflows. The federal government could sweeten the pot by creating “climate opportunity zones” in which it would subsidize affordable housing and provide tax incentives for new arrivals.
What these mechanisms have in common is that they allow municipalities and residents to plan for relocation without forcing anyone to move immediately.
Finally, we need a more efficient buyout strategy for residents who don’t relocate on their own initiative.
Perhaps most importantly, the federal government must allow for proactive relocation by decoupling buyout funding from major disasters. Most federal relocation funds begin to flow only after a disaster declaration, even though pre-disaster relocation is both less costly and less traumatic than attempting to accommodate entire communities in the wake of a hurricane, flood, or wildfire.
In 2022, the Department of the Interior’s Bureau of Indian Affairs (BIA) began experimenting with a more proactive relocation approach by providing $25 million each to Newtok and Taholah, along with the Native Alaskan village of Napakiak. Admittedly, that’s far from enough to relocate every threatened house or piece of infrastructure, but the support will significantly expedite the retreat process. Napakiak is prioritizing the relocation of structures imminently threatened by rapid and severe erosion from the Kuskokwim River, including 38 homes, to a new subdivision further upland.
FEMA and HUD should also pay communities to plan—and eventually implement—buyouts, including by locating the most at-risk homes ahead of time, talking to those owners about their options, and completing buyout paperwork well before a disaster hits.
Rob Moore, director for flooding solutions at the Natural Resources Defense Council, says Congress should authorize FEMA to finance this work using NFIP revenues. Between 2000 and 2017, NFIP spent $46.6 billion addressing damage to homes, with repairs often costing more than the total value of the home.
“Why are we paying to rebuild properties through NFIP, when the homeowner is sick of rebuilding?” he says. “FEMA is throwing good money after bad, making people rebuild, especially when the community would like to retire the structure, as well.”
Some municipalities are already planning future buyouts as part of their climate resilience and community economic development strategies, and funding them using local taxes and fees. Houston encourages residents to volunteer for buyouts before disasters occur. The Charlotte, North Carolina, metro area funds a preemptive buyout program with fees from its stormwater utility.
The Science and Economics Are Clear, We Just Need to Act
An eventual climate emergency is likely unavoidable. It may first manifest as a housing finance meltdown, in which insurance and mortgage industries finally begin pricing climate risk into their offerings, causing certain home values to plummet. Homeowners may watch their equity evaporate, and many may default on their mortgages and be left with insufficient funds to relocate to dry ground.
In the decades after, as the ocean begins swallowing up entire neighborhoods and towns, the U.S. government will have no choice but to relocate residents en masse. It might do so through pre-disaster eminent domain takings—the U.S. Army Corps of Engineers already has the authority to conduct compulsory buyouts—or through mass emergency buyouts.
Both efforts will be incredibly expensive, as well as chaotic and traumatic. But the fewer people we must relocate in this manner, the less it will cost. In fact, if we are purposeful and imaginative in how we plan relocations, they can stimulate the economies of previously stagnant cities.
The challenge is to overcome the temptation to sit back. The science and the economics are clear. We just need to act.
Editor’s Note: This article has been updated to correct the timeframe over which data was gathered about coastal property owners’ future losses.
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