FEMA’s disaster buyout program is working — but there’s a catch

Detailed summary

New research finds that FEMA's climate relocation program moves people out of harm’s way, but its benefits aren’t shared equally.

For nearly four decades, the federal government has funded a program that buys out homeowners who live in disaster-prone areas as a way of encouraging them to relocate to safer ground. The Federal Emergency Management Agency has spent over $6 billion on more than 53,000 properties nationwide through its Hazard Mitigation Grant Program. But the question has long been: to what extent does this approach work?

A study published today in Science Advances is the latest to offer an answer. Author Rachel Young, an environmental economist at the University of Minnesota, found that the buy outs have largely succeeded in its objective of relocating people and has mostly paid for itself by avoiding future damages. But it isn’t helping everyone equally.

“The program is extremely effective at helping people not only move but also move to lower-risk places,” said Young, whose paper makes clear that the “benefits are not evenly distributed.”

FEMA started doing buyouts in 1988 with the aim of encouraging people to move out of harm’s way. The idea was to avoid repeatedly paying federal disaster aid or insurance claims at the same location. ProPublica reported, for example, that in one extreme case, a single home in northeast Houston received 18 federal flood insurance payments totalling $1.8 million — roughly 15 times its market value.

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Using a mix of private and public data, the paper found that program participants were about 20 percentage points more likely to relocate in the first five years than others who were similarly impacted. While that difference dropped a bit over time, it persisted for at least 15 years. The research also showed that participants tended to move to areas with higher incomes and higher rates of education and employment. Moreover, their debt levels fell, at least in the short term.

From the government’s perspective, it’s been a win too.

Tha…

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