Should Virginia Beach Buy Out Flood-Prone Properties at Fair Market Value?

by James A. Bacon

As Hurricane Dorian bears down on the South Atlantic Coast, the Virginian-Pilot reports that Virginia Beach officials are considering a program to buy out residents who want to move out of homes that have flooded or face a risk of flooding. The land would be converted into parks, planted with trees, or used as a flood-control projects.

That’s just one of the strategies city officials are pondering to deal with sea-level rise. The seal level in Hampton Roads has increased by a foot since the 1960s, and some climatologists claim that the rate of rise could accelerate. If the city does not take preventive action, writes the Pilot, a projected three-foot rise in the sea level could cost $330 million yearly by 2065.

The Virginia Beach plan would be based on a similar program in Charlotte-Mecklenburg, N.C., which spends $3.8 million yearly in voluntary acquisitions, funded through stormwater fees, to manage local floodplains. The city assesses which properties are the most vulnerable and targets those first.

For every dollar spent on such a program in Virginia Beach, the city would get more than $5 in benefits, according to engineering consulting firm Dewberry. The firm has identified 2,500 properties that would be beneficial for the city to buy. Most are in the southern part of the city near Back Bay. Additional funds would be spent to convert the residential property into forest or wetlands.

Bacon’s bottom line: The proposal is definitely a step in the right direction. Localities need to adapt their land-use policies to the reality of sea-level rise.

I’m not convinced that the sea level over the next 50 years will increase at three times the rate of the last half century, a projection that is based on the assumption that rising atmospheric CO2 will accelerate the rate of climate change, melting polar icecaps and sea-level rise. Further, it would be interesting to know if city projections take into account plans by the Hampton Road Sanitation District to replenish the Potomac Aquifer, the drainage of which gas contributed to subsidence and roughly 25% of the region’s relative sea level rise. Injecting treated waste water back into the aquifer could partially reverse subsidence in parts of the region. Whatever the rate of sea-level rise, however, flooding is increasing in frequency and severity, and the city does need to take remedial action.

It makes sense to identify the areas most prone to flooding. It makes sense to encourage residents to voluntarily move out. And it makes sense to convert residential properties into wooded or wetland buffers. My question is whether it makes sense for taxpayers to pay residents fair market value for the properties.

It would be a no-brainer for Virginia Beach to take over properties that homeowners voluntarily abandon on their own. It might even make sense to pay off homeowners’ mortgage obligations, so the large financial liability doesn’t inhibit them from moving to higher, drier land. But the full market value of the property? Why should local government bail property owners out of their poor real estate investments? The necessity of moving people out of flood-prone areas needs to be balanced against the interests of city taxpayers. Soaring flood-insurance rates will run homeowners out of flood-prone areas soon enough. No sense in the city paying more than it needs to.