North Carolina homeowners impacted by Helene may avoid federal buyouts: Politico

Following the ravages of Hurricane Helene in the western region of North Carolina, federal programs designed to assist impacted homeowners with property buyouts and relocation assistance may not have much interest. This is according to local officials who spoke with Politico.

Zeb Smathers, the mayor of Canton in western North Carolina, described for the outlet how he is no longer comfortable with asking impacted residents to stay. Just three years ago, the town was hit with a “once-in-a-lifetime” flood resulting from Tropical Storm Fred. It impacted 700 homes and required emergency shelter for 100 people in the town of roughly 4,400 residents.

Following the impact of Helene, Smathers said he is now encouraging impacted homeowners and business owners to seek out these federal buyout programs if they don’t want to remain in the area.

“There was a western North Carolina that existed before this and there’s the one that comes after,” Smathers told Politico in an interview. “I’m numb, but I experienced this three years ago — which allows us to ask some of the tougher questions.”

But Smathers doesn’t expect a lot of residents to take up the buyout offers. He notes that an attachment to the community, the sweeping devastation wrought by Helene and a lack of affordable housing options elsewhere in the state are combining to potentially depress the local rate of uptake for these programs. On top of that, many impacted residents simply have a personal connection to their homes and don’t want to let them go.

“Those factors will hobble programs designed to lessen personal and financial hardship as well as costly taxpayer-funded disaster responses,” Politico reported.

In 2021, Congress passed a bipartisan infrastructure bill that was signed into law by President Joe Biden. It included $3.5 billion in new funding for the Federal Emergency Management Agency (FEMA) and its flood mitigation assistance program, which can pay for buyouts for homes severely damaged by flooding. The idea is to reduce future taxpayer burdens tied to natural disasters while also trying to steer people away from flood-prone areas.

Low-interest loans also got a $500 million boost through the law, and an additional $1 billion was added to a community grant program aimed at reducing the risks of such disasters.

The payouts under the program are based on pre-disaster market prices, but Smathers —along with other local officials, aid workers and environmental organizations — don’t see the programs getting a lot of buy-in from community members.

“We’re a heavy Republican state, let’s just say that,” Paula Swepson, executive director of West Marion Community Forum, told Politico. “They don’t believe in climate change, don’t believe in environmental justice, believe that DEI is from the pits of hell. So, how can we continue to fight and let people know that these things are real — and if you didn’t believe it, how do you think this happened?”

But other local officials said they’re not sure how to access the federal assistance programs, since they often come with onerous application processes that take needed resources away from addressing more immediate needs. Compounding all of this is a lack of viable relocation spots for impacted lower-income residents to go, they said.

Previously, it was indicated that FEMA had already exhausted half of its allocated response funding due to the back-to-back disasters of hurricanes Helene and Milton. Absent additional action from Congress, FEMA will be forced to restrict its spending as relief needs accelerate in the wake of both disasters.

Home insurance is also facing a reckoning in the Southeast due to the aftermath of the storms. Experts told HousingWire that the nature of the way the mortgage industry interacts with insurance companies may have to change due to accelerating climate risk.