Association for Public Policy Analysis & Management

In 2013, the New Jersey Blue Acres Buyout Offer (BABO) program and the New York Buyout and Acquisition Program (BAP) began to formally acquire and purchase storm-related damaged properties from voluntary homeowners living in susceptible floodplains. After offering the homeowners the fair market value for their property in the form of a buyout, the program acquires the property and the previous homeowners relocate out of the SRL area. Overtime, these programs around the country are expected to facilitate coastal and floodplain retreat and, in doing so, eliminate the costly resources allocated by the National Flood Insurance Program used for repairs and reconstruction. By promoting long-term adaptation to climate change, no other current voluntary buyout program matches the magnitude and resources of the BABO and BAP programs. Currently, these programs are the largest voluntary buyout programs, and the BABO specifically is the first ever to acquire residential properties across an entire state.

As a policy research topic that addresses economics and insurance, emergency management, housing and community development, the environment, as well as population and migration issues, buyout programs provide unique insight into the effectiveness of policy in adapting to climate change. As other states like Florida, Louisiana, and Texas are implementing their own buyout programs, however, little is understood regarding their lasting impacts on communities. Though these programs provide a long-term, hazard-mitigation strategy promoting coastal and floodplain retreat, further analysis on what these programs do and do not to different kinds of municipalities is necessary. Despite how sparse the literature is on these programs, this research evaluation will analyze trends in real estate sales of residential properties in the 32 months before and after the enactment of these programs in 2013, and will include a treatment group consisting of municipalities that voluntarily participated in their state’s program as well as a control group that did not participate. These groups will be created using propensity score matching using data from RealtyTrac, the National Flood Insurance Program, and the American Community Survey. Moreover, further assessment will be conducted to examine neighborhood effects and potential gentrification trends in relation to flood insurance and buyout areas. This being the first ever quantitative evaluation assessing voluntary buyout programs, the projected results could serve to provide a new understanding of this field from unexplored statistical terrain.