Iowa's Flood-Damaged Communities Mulling Long-Term Home Buyout Options

Jun 17, 2019

Iowa’s flood-ravaged cities and counties may decide down the road whether they want to apply for funding to buy peoples’ damaged homes.

If a county or city applies and gets accepted for a voluntary buyout through the Federal Emergency Management Agency, homeowners could volunteer for their property to be bought for what it was worth before a disaster hit. Their property would be demolished and the land would be turned into green space.

FEMA funds buyouts through its Hazard Mitigation grant program, but state and local governments decide how the money is spent, said FEMA spokeswoman Deanna Frazier in an email.

“The state makes up a mitigation wish list, to include home acquisitions in certain municipalities, and disperses those funds accordingly,” Frazier said.

"These kinds of programs are the only way they're probably going to recapture the pre-flood market value of their home." -Dennis Harper, Iowa Homeland Security and Emergency Management

Buyout programs are offered to all local governments in the state’s 99 counties, said Iowa Homeland Security and Emergency Management Recovery Division Administrator Dennis Harper. But they’re most often tied to disaster recovery, so southwest Iowa communities damaged by this spring’s historic flooding are talking about them.

“After those properties have been impacted, these kinds of programs are the only way they’re probably going to recapture the pre-flood market value of their home,” Harper said.

State officials held meetings in May in Fremont and Mills counties to introduce people to buyout programs that local governments may decide to apply for in the future.

Mills County Public Information Officer Sheri Bowen said the county and the city of Pacific Junction both got a list of homeowners who have expressed an interest in taking a buyout. In Pacific Junction, 150 homeowners have expressed an interest, while more than 50 homeowners in the unincorporated parts of the county said they might consider it.

“To take homes out of areas that are frequently flooded – that’s a great strategy for mitigating flood risks,” Bowen said in an interview in May. “It also helps that homeowner be made more whole again.”

But, she said, the downside is that land cannot be built on again, so it won’t generate any additional tax revenue for the county. 

"I don't want 30 or 40 parks in my town. I want it so that we can rebuild and be able to rebuild there in the future." -Pacific Junction Mayor Andy Young

This makes these programs a big decision for cities and counties. In Pacific Junction, a city of a little more than 450 people in Mills County, Mayor Andy Young says his city is waiting to see what’s going to come from federal disaster money, or even an alternative buyout program through the U.S. Department of Housing and Urban Development that could rebuild homes.

“I don’t want 30 or 40 parks in my town,” Young said. “I want it so that we can rebuild and be able to rebuild there in the future. We need it as deed, as property.” 

Around 230 home and businesses in Pacific Junction were affected by flooding this spring, he said.

Young added the number of Pacific Junction homeowners that have expressed an interest in a buyout worries him, but "everybody is in wait-and-see mode," he said.

Harper said Iowa has an estimated $20 million in funding for buyout programs. He added the state will likely be considering applications at the local level related to recent flooding over the next six to 18 months.

Once an application is approved, it could take 18 months to three years to complete acquisitions, demolitions and close out the projects. These are a “long term objective” for communities, he said.

“They are not only acquiring property to help save property owners that were impacted by the flood, but they’re also considering the cost of the community to over and over again respond to those needs,” Harper said.

The city of Burlington in eastern Iowa, which dealt with flooding in May, is not looking into residential buyouts, City Manager Jim Ferneau said.

In September, the City of Clive in central Iowa created its own buyout program, using leftover money from the prior budget year to acquire properties affected by June flooding. Assistant City Manager Pete De Kock said since a flood-prone area flooded for the fourth time in 10 years, the city council decided to go for a “targeted buyout.” The council approved $1.25 million to acquire as many properties as the city could.

Clive has used $1.1 million so far to buy eight residential properties, De Kock said. Additional funds from FEMA will help them buy three more properties. If more funding becomes available, the city will continue to see how many homeowners want to participate.

“We don’t want to see a buyout program emptying out a neighborhood…or really changing the way a space feels,” De Kock said. “As we move forward as a city, we’ll be taking that into consideration as we execute more of these buyouts.”