Voluntary Property Acquisitions
Last updated on August 3, 2012
Q. I am one of the 108 homes identified in early 2012 as part of an initial round of voluntary property acquisitions - what remains left to be done before my home is purchased?
A. The City of Minot has closed on two-thirds of homes that accepted an offer from the initial round of voluntary property acquisitions tied to the 2011 Mouse River flood. Of the 108 offers made by the City earlier this year, 84 property owners accepted a voluntary purchase offer and (as of the middle of December 2012) 57 have been closed or are scheduled to be closed. The City anticipates closing on the remaining 27 properties in the upcoming weeks. Of the properties that remain to be purchased, some have asked to close after the first of the year while others are still pending approval on receipts for eligible repairs or clear titles.
By purchasing these homes, the City will be better able to fight any future flooding that may occur prior to finishing an enhanced flood protection plan. The access and open space for emergency flood protection is sorely needed.
The City is currently in the process of determining guidelines, policies and procedures that will apply to future rounds of voluntary property acquisitions. It is anticipated that the City will secure additional state funds in 2013 that can be used toward another round of voluntary acquisitions. A funding request is in the Governor's Budget for $61 million toward the Mouse River Flood Protection Project from the 2013 State Legislature that would make additional voluntary property acquisitions a reality.
Q. What steps have to be taken prior to the City purchasing a home that was flooded?
A. Part of the funding attached to the purchase of these homes is coming from the federal government, specifically the Department of Housing and Urban Development (HUD). In the process of purchasing these homes, the City of Minot is bound by the guidelines, rules and regulations attached to the dollars, as deemed by HUD.
One of the key steps that has taken the City longer than expected is the environmental assessments required by HUD. This includes both a broad review and an individual review of each home that the City would like to purchase. As of the middle of July 2012, the City has been given indications that this process should be finished within the next four to six weeks.
Another component of the review process that has to take place deals with the North Dakota State Historic Preservation Office (SHPO). This office deals with the historical preservation of properties. In order to receive their approval on the appropriate acquisition of flood-impacted properties the City has had to provide appropriate information, such as age of the property, for their review. As of the end of July, the State Historic Preservation Office has given the City approval to purchase the majority of the 110+ properties identified, in many cases they have not yet given approval to do demolition.
Q. When is the City going to start buying out homeowners that are under the footprint of the potential enhanced flood protection plan?
A. As it currently stands, the City of Minot does not have the financial means necessary to do voluntary property acquisitions for all of the more than 250+ homes identified as "under the footprint" of an enhanced flood protection plan. The City in the past year has worked with the North Dakota State Water Commission (NDSWC) to secure a portion of the funding to do some voluntary property acquisitions of homes that were identified as needing to be purchased regardless of any future flood protection plan. These are the 108 homes identified in late 2011/early 2012. The City anticipates being able to secure additional funding from the NDSWC in upcoming years to do additional voluntary property acquisitions.
A request is in the Governor's Budget for $61 million from the 2013 State Legislature that would make a second round of voluntary property acquisitions a reality. These acquisitions would be made to homes within the footprint of the enhanced flood protection plan. The process of formulating guidelines, policies and procedures related to this round of acquisitions is currently under way.
The City of Minot worked with FEMA to secure what are called Hazard Mitigation Grant Program (HMGP) funds to do additional voluntary property acquisitions. These funds require the City to prove, using a complicated benefit cost analysis (BCA), that it is "worth" it for the federal government to fund the purchase of specific flood-damaged homes. FEMA has indicated that, as of now, few to none of the homes impacted by the flood will qualify for HMGP funding for home acquisitions.
As well, the City of Minot plans on using a percentage of the Community Development Block Grant-Disaster Recovery (CDBG-DR) funds to aid in reconstructing or purchasing flood-damaged homes. For more information on the many proposed programs for housing assistance under the CDBG-DR Action Plan, go to the Minot Recovery Information website, www.minotrecoveryinfo.com.
Q. How do I know if I am someone that the City might consider buying out in the next couple of years?
A. The Mouse River Plan website has the engineering teams' Preliminary Engineering Report that includes the proposed footprint for an enhanced flood protection plan. You can visit the site at www.mouseriverplan.com and click on any of the maps included on the site.
Q. What are the rules on duplication of benefits - if I should choose to put FEMA, SBA or other money into my home for rebuild, will that be counted against me when it comes to a voluntary property acquisition (VPA)?
A. Yes, the money that is put into your home by another disaster-assistance source will be deducted from your property offer in the case of a voluntary property acquisition. The exception to this rule is for homeowners that can verify with receipts that actual eligible repairs to the home were made with loans, repair grants or other compensation (no credit will be given for the homeowners own labor for repair work).
With the City of Minot paying homeowners their pre-flood value of the home plus 15% based on assessed property values, the City is essentially paying for fair market value. Based on this, any funds received that compensate the homeowner for damages are considered to be a duplication of benefits. In other words, through the VPA process the City paid for the damages and then some other source (FEMA, SBA, insurance, etc.) also paid for damages to the home. The amount of the duplicated assistance will be deducted from the offer for the property so that the homeowner is not paid a second time for compensation already received from another source.