Homeowner acceptance of voluntary property acquisition offers

Robinson, Celine S.; Davidson, Rachel A.; Trainor, Joseph; Kruse, Jamie Brown; Nozick, Linda K.

doi:10.1016/j.ijdrr.2018.05.002

Cited by 25 publications

(29 citation statements)

References 25 publications

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“…That is, ceteris paribus, white homeowners are 12% more likely to accept acquisition offers. Our result on Race is consistent with that of Robinson et al () who also found that non‐white homeowners are less likely to accept acquisition contracts compared to white homeowners.…”

Section: Resultssupporting

confidence: 92%

“…That is, homeowners in a floodplain are 17% less likely to accept an acquisition offer compared to homeowners located outside floodplain. Robinson et al () find a positive relationship between location of a property in floodplain and acquisition acceptance. This result may be due to moral hazard where homes in floodplains are required to carry flood insurance if financed by a federally backed mortgage.…”

Section: Resultsmentioning

confidence: 99%

“…See Robinson et al () for a broader discussion of the positive and negative effects of an acquisition program.…”

mentioning

confidence: 99%

See 2 more Smart Citations

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Frimpong¹,

Kruse²,

Howard³

et al. 2019

Southern Economic Journal

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Any entity offering flood insurance, whether it is private or government‐administered such as the National Flood Insurance Program (NFIP), faces the challenge of solvency. This is especially true for the NFIP, where homeowner affordability criteria limit the opportunity to charge fully risk‐based premiums. One solution is to remove the highest flood risk properties from the insurer's book of business. Acquisition (buyout) of flood‐prone structures is a potentially permanent solution that eliminates the highest risk properties while providing homeowners with financial assistance to relocate in a less risky location. To encourage participation, homeowners are offered a preflood fair market value of their damaged (or at risk of damage) structures. Although many factors have been shown to affect a homeowner's decision to accept an acquisition offer, very little research has been devoted to the influence of price or monetary incentive offered on homeowners' willingness to participate in acquisition programs. We estimate a pooled probit model and employ a bootstrap methodology to determine the effects of hypothetical home price offers on homeowners' acquisition decisions. We do so while controlling for environmental factors, property characteristics, and homeowner sociodemographic characteristics. Results show that price indeed has a positive effect on likelihood of accepting an acquisition contract. Furthermore, estimated homeowner supply curves differ significantly based on the damage status of the acquisition offer, as well as homeowner and property characteristics.

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Section: Resultssupporting

confidence: 92%

Section: Resultsmentioning

confidence: 99%

See 1 more Smart Citation

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Frimpong¹,

Kruse²,

Howard³

et al. 2019

Southern Economic Journal

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show abstract

“…Empirical analysis of the FEMA buyout funding programs as a whole remains sparse, despite its importance in understanding programmatic efficiency as well as equity. Moreover, while research has explored why individuals accept or reject buyout offers (18)(19)(20), little work has evaluated why local and state governments choose to use buyouts to manage flood risk. Furthermore, recent research suggests that post-disaster aid widens wealth inequality (22), and buyouts case studies have raised questions about practices and outcomes in minority and low-income areas (9,11).…”

Section: Introductionmentioning

confidence: 99%

Managed retreat through voluntary buyouts of flood-prone properties

et al. 2019

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Retreat from some areas will become unavoidable under intensifying climate change. Existing deployments of managed retreat are at small scale compared to potential future needs, leaving open questions about where, when, and how retreat under climate change will occur. Here, we analyze more than 40,000 voluntary buyouts of flood-prone properties in the United States, in which homeowners sell properties to the government and the land is restored to open space. In contrast to model-based evaluation of potential future retreat, local governments in counties with higher population and income are more likely to administer buyouts. The bought-out properties themselves, however, are concentrated in areas of greater social vulnerability within these counties, pointing to the importance of assessing the equity of buyout implementation and outcomes. These patterns demonstrate the challenges associated with locally driven implementation of managed retreat and the potential benefits of experimentation with different approaches to retreat.

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“…16 Psychological Many people who live in at-risk areas do not want to retreat. [35][36][37][38][39] Some resistance is rational. People enjoy living near coasts; they enjoy the access, views, and recreation.…”

Section: Barriers To Managed Retreatmentioning

confidence: 99%

Managed Retreat in the United States

Siders

2019

One Earth

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Homeowner acceptance of voluntary property acquisition offers

Cited by 25 publications

References 25 publications

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Measuring Heterogeneous Price Effects for Home Acquisition Programs in At‐Risk Regions

Managed retreat through voluntary buyouts of flood-prone properties

Managed Retreat in the United States

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