Some Southwest Iowa Communities Start Process To Buy Out Flood-Damaged Homes

Jun 22, 2019

Some southwest Iowa communities have started the process of applying for voluntary federal buyouts to demolish flood-damaged homes.

Officials in the city of Hamburg and rural Mills County have informed the state they’re interested in applying. The “notice of intent to apply” is the first step towards the application process, which officials said could take six to 18 months. The actual buyout, including the acquisition, demolition and closing out a project, could take 18 months to three years.

Hamburg Mayor Cathy Crain said her city has more than 50 properties that have damage substantial enough to qualify for a buyout.

“We’re very aware of how eliminating a neighborhood, what that means to our town,” Crain said. “On the other hand, we are trying to move a portion of our town further north out of the floodplain.”

Buyouts through the Federal Emergency Management Agency require counties or cities to pay 15 percent of a home purchase, while FEMA pays 75 percent and the state funds 10 percent of the cost. Crain says Hamburg does not have the money to pay for 15 percent of each home purchase, but they’re looking for funds they could potentially get through the state.

Since flooding this spring hit the city of 1,100 hard, Crain said the city is applying for buyouts “to give our people a chance.”

“Over 50 homes will need to be demolished,” Crain said. “These are homes where in some cases generations lived and in many of these cases these people did not have flood insurance.”

In Mills County, owners of 58 residential properties said they would be interested in getting their homes demolished and taking a buyout based on the value before the flooding. These do not include properties in Pacific Junction, a town of more than 450 people, which is still deciding whether to apply for buyouts.

Mills County Auditor Carol Robertson said the county is starting the process while weighing its options. There are other buyout and recovery programs that could become available in the future, through the U.S. Department of Housing and Urban Development.

“This isn’t the first time some of these homes have been impacted – never to this level,” Robertson said. “They have had floodwaters in their yard and seep-waters in their basement, maybe, but to this magnitude, never.”

Estimates from Robertson’s office show the 58 properties combined paid roughly $307,000 in property taxes last year. Since a buyout program through FEMA would turn the land into green space where homes could not be built on again, rural Mills County would lose those tax dollars.

“It would never go back on the tax rolls again if it was made into a green space,” Robertson said.

A spokeswoman for Mills County said the county will be working with a planning agency to put the application together, which includes documenting the 58 properties and the assess values.

A HUD Community Development Block Grant program could help the county demolish structures and rebuild in the area, rather than turning the land into green space. The county is looking into that option, if it becomes available.

The city of Pacific Junction will decide at a July city council meeting whether to put in a notice of intent to apply for a buyout.