Why Buyouts Take So Long
In the private sector, it can take just days to buy a home. In the public sector, it can take years. Here’s why buyouts take so long.
Major Steps in Process
The graphic above outlines the major steps in the buyout process. The linked video provides more detail.
The Forest Cove Townhomes illustrate some of the problems encountered along that timeline.
Exceptional Sense of Community Makes People Want to Stay
According to Jennifer Parks who lived on Timberline, her townhome flooded eight times in five years. Despite that, she, like most who lived there, loved the secluded neighborhood. It was close to nature, beautiful and quiet. Neighbors looked out for each other. They bonded over backyard barbecues. They enjoyed an exceptional sense of “community.” Then came Harvey. It made the homes uninhabitable. People immediately scattered to find new housing.
Dealing with Chaos and Confusion
When the initial shock wore off, they began exploring options. Could the homes be repaired? Would CenterPoint restore power? Could the sand-filled storm drains and streets be cleared? Which way was the herd moving? One family could fix its home; but if the other neighbors in a building didn’t, their investment would be ruined. This is important because in Harris County, buyouts are voluntary. One holdout in a building with a dozen units could undermine others.
Meanwhile, HCFCD assessed damage county wide to identify eligible properties. Harvey damaged so many, that it took nine months for the flood control district to even issue its final report on the storm.
Assessment Necessary; Not All Properties Eligible
Identifying eligible properties requires looking at them from several different perspectives. For instance:
- Have people requested the buyouts?
- Are properties subject to repeat flooding? Is it life threatening?
- Will buyouts serve a larger strategic purpose that reduces flooding? For instance, restoring green space near a river. Or creating community parks.
- Who will maintain the property long term?
- Are interest and community support high?
- Will buyouts create a checkerboard pattern that creates maintenance issues or will there be full public ownership of an area?
- Can HCFCD secure grants to fund all interested sellers?
Of the 154,170 homes flooded in the county during Harvey, only 4,000 property owners volunteered for buyouts and of those, only 1,100 were eligible (0.71% of all flooded homes).
Qualifying for Buyout
To learn more about the HCFCD buyout process, see this document: Voluntary Buyout Guidance.
Buyout candidates were simply built in the wrong place, prior to the knowledge we have today.
HCFCD’s Home Buyout Program does not provide immediate flood recovery assistance – its primary function is to help prevent future flood damages.
To see where HCFCD is interested in buyouts, check this map of Buyout Areas, last updated in July.
Funding and Closing
After identifying and qualifying candidates comes the difficult process of securing grant funding. That usually takes about 8-18 months. It’s a multi-tiered process. Austin collects and screens grant applications for Washington. Assuming Washington approves, money then flows back through Austin.
Finally, with money in hand, HCFCD must appraise property to confirm its value (which can be pre-flood). HCFCD must then reach an agreement to buy the property and determine relocation benefits. Of the initial 1,100, 349 are in the closing phase now and 560 have already closed.
HCFCD says that roughly a half dozen homes remain to be bought out. Those remain “problem” cases. In one, an out-of-state investor bought property at auction AFTER Harvey. But terms of HCFCD’s Harzard Mitigation Grant specify that the grant cannot be used in cases like that. Otherwise people would buy up flooded properties and resell them to FEMA at pre-flood valuations.
In other cases, sometimes people have walked away from flooded properties leaving lenders holding the bag. That puts property in legal limbo. No one has authority to sell without going through a foreclosure process.
Such problem properties can delay demolition.
In multi-family housing (such as the Forest Cove Townhomes), EVERY family in a building must have completed a buyout before the building can be demolished.
The last point raises a public-policy concern. We are now starting YEAR FOUR AFTER HARVEY! Units in six Forest Cove Townhome Buildings still need to be purchased. Those buildings look like the one above and drag down property values in an entire community.
So, should construction of new multifamily units be allowed in such flood-prone areas?
It’s one thing to repair properties built BEFORE flood problems became apparent; another to permit new construction AFTER. And developers keep throwing up new units faster than flooded ones can be bought out.
For More Information
For general information about HCFCD’s buyout program, see this video.
For the portal to the buyout section of HCFCD’s website, click here.
Posted by Bob Rehak on 9/3/2020
1101 Days after Hurricane Harvey
The thoughts expressed in this post represent opinions on matters of public concern and safety. They are protected by the First Amendment of the US Constitution and the Anti-SLAPP Statute of the Great State of Texas.