New Jersey Blue Acres Buyout Program

New Jersey

In New Jersey’s tapestry of small towns and close-knit communities, a state program called Blue Acres weaves together social services with flood protections. The program, conceived in 1995, and amped up after Superstorm Sandy destroyed thousands of homes within the state’s many coastal and riverine communities. Now its staff works around the clock to counsel, advocate for, inform and listen to homeowners considering a buyout. Staff does this work on homeowners’ terms -on weekends, in diners, allowing for life events to occur before scheduling a closing. The state has acquired approximately 760 properties since this expansion, boosting flood safety in 20 cities and towns, and creating functional green space which can serve as both flood protection and a recreational amenity. The New Jersey Blue Acres program is a nationally recognized example of an established and forward-thinking buyout program.

 

The Blue Acres Buyout Program, as it is formally known, seeks to improve the slow approval times that keep homeowners from collecting disaster relief and the tortuous process of finding replacement homes. The program has impressive metrics that show its success. Since Superstorm Sandy, the program has secured federal funding for nearly 1,200 properties and made offers on 1,115 of them. To date, about 700 homes in 20 municipalities and 10 counties have been demolished, creating open space to provide a buffer against future floods, and an asset for recreation and environmental rehabilitation.

The floodplain buyout program was amplified after Superstorm Sandy, in which dozens lost their lives, 365,000 homes were damaged or destroyed, and $30 billion in economic loss was wrought across the state, said Fawn McGee, director of the Blue Acres Program and bureau chief for the Green Acres State Land Acquisition Program, at a ULI 2020 Fall Meeting concurrent session. Before Sandy, local governments struggled to process more than $100 million in pre-Sandy flood insurance claims so the state stepped in to help the municipalities with buyout projects that could mitigate future risk and losses, and most importantly help their residents move to safer ground.

Blue Acres, McGee laid out, focuses on “getting families out of harm’s way.” The buyout process is voluntary, and homeowners must apply for a buyout to be considered. Flood-prone areas with clusters of interested homeowners, in areas with local municipal support for buyouts, may be eligible for a possible buyout project. The program is funded by federal sources like FEMA and HUD. However, through a constitutional amendment by the New Jersey State Legislature in 2019, a portion of the state’s corporate business tax is also used to fund the program to ensure a more sustainable and predictable funding approach.

“One of the hardest parts of the buyout process is convincing the governing body of a community,” McGee said. “These communities are looking at every dollar associated with every home that we remove, and the biggest hurdle is getting that community and its government to realize that [what we are proposing] is the best solution.” McGee’s team must complete benefit/cost analyses for each home appraised over roughly $275,000 to qualify for FEMA grants. The team must also caucus with homeowners who need those grants and need a stable place to live. McGee emphasizes providing respect, continuity, and clarity to those homeowners.

She says the process comes in two steps: bringing local governing bodies on board and then working with residents. Evaluating possible buyouts with local governments flows from maps, photos, and discussions about their unique current and future challenges and goals. “When you look at the cycle of recovery in that one low, wet corner of the community, the governing body eventually realizes that those tax dollars could be going to enhance a healthier community for all residents. Almost immediately, I’ve had mayors say: this is great! We’re going to break even almost as soon as we close out, because of the emergency costs.”

Once mayors (who are especially numerous in this home-rule state) agree, McGee says, the Blue Acres professionals act as “advocates” for families. They use prestorm market valuations and require the appraisers to meet with the homeowners and consider the property owner’s prestorm photos of their homes, such as photos of their home “after a celebration,” to ensure the appraisers get a sense of the prestorm condition of the home. There is no transfer fee, real estate tax, or realtor fee for property sellers.

“As soon as we have the grant approval, we have a private meeting [between the Blue Acres team and participating homeowners], and we have police at the door [of the facility to help manage attendance],” McGee told the ULI group. “Staff are ready within days of the evening kickoff meeting to get out on the property, so the people can see that their government works.”

“I will meet with someone at their kitchen table or in a diner, and my appraiser will show them the comps so they can walk around the neighborhood and see how their value was determined. Our staff is always on call, and once the families are ready to accept our offer, we go to contract.”

McGee says the program has consistently earned public funding. “As the most densely populated state, we’ll hit carrying capacity around 2050,” McGee said. “Voters want to have a park that they can walk to with their families, and they want clean air and clean water.” The Blue Acres program is a part of the New Jersey Department of Environmental Protection’s Green Acres Program (60th anniversary this year!) and is designed to work in concert with the initiatives and procedures set forth through the Green Acres Program’s Bureau of State Land Acquisitions, where McGee also serves as bureau chief. The Blue Acres program acquires flood-prone properties that will, similar to the Green Acres Program’s acquisitions, then become preserved open green space, expanded passive recreation areas, and enhanced flood hazard mitigation, in perpetuity.

One example of the Blue Acres Buyout Program’s success came after Hurricane Sandy in the city of Linden. The Blue Acres program purchased 22 flood-prone properties within the waterfront Tremley Point neighborhood and partnered with the city, nearby university, local businesses, engineering and construction firms, as well as other government agencies to preserve the area as open space for recreation and floodplain restoration. The project was recognized for its success through the New Jersey American Water Resources Association Excellence in Water Resources Protection and Planning Award and a Bowman’s Hill Wildlife Preserve 2021 Land Ethics Award.

The Blue Acres program is also noteworthy because of its role supporting tenant relocation. A requirement under HUD’s Community Development Block Grant Disaster Recovery program is to help relocate tenants affected by the buyout of their rental property and pay for a comparable living arrangement. In order to support renters and landlords more quickly, a tenant relocation program with a dedicated team was added to the Blue Acres purview in 2017. Since then, over $1.2 million in relocation assistance has been distributed and 51 households have been assisted, two of which became homeowners.

McGee attributes success to compassionate staff and “being good listeners.” It is important that team members understand that this is emotional and traumatic—the flood events, the history in their homes, putting their faith in a government program, and moving: “Nobody wants to leave their home and folks don’t necessarily trust the government.” In addition to the one-on-one attention provided to each family, McGee continued, GIS mapping of flooded areas can often help the homeowners see the storm’s effect on the home and neighborhood. A picture is worth a thousand words.

Anticipation and preparedness are part of the plan McGee sets for her team. The team tries to stay ahead of the seller’s schedule, so that when the seller has a need or a question, or is ready to move forward, the team is able to step in and help. Hurrying potential sellers, however, does harm. “I had a family who wanted to wait to move until June because their son was the quarterback of the football team.” she said. “And the answer was, like, of course!”

Takeaways:

Staff up to earn trust and to deliver services and support. “My folks all have phones and access to cars,” McGee said, stressing that homeowners must be able to expect a near-concierge level of service. That includes driving to meetings on evenings and Saturdays. Critically, it includes due diligence that creates a longer-than-forecast list of properties to purchase, in case sellers drop out of the program.

Consider buyout areas that consist of clusters or contiguous parcels to maintain the fabric of the community and leave the potential for the community to use these areas for future passive recreation and conservation amenities. The Blue Acres program considers the properties acquired through the buyout program as an opportunity to create a buffer that protects upland areas from future flooding, as well as land that can continue to provide value by creating passive recreation and conservation spaces for the public. McGee says mayors and taxpayers who get the math of replacing a ratable with a townwide attraction become cooperative quickly and for the long term.