New Report Shows How States Can Fund Home Buyouts as Federal Resources Shrink

CHICAGO (Nov. 18, 2025) – As costs for damages from climate-fueled disasters continue to mount, a new report from NRDC (Natural Resources Defense Council) and EDF (Environmental Defense Fund) shows how states and local governments can pay for voluntary home buyouts and relocation assistance without relying so heavily on federal grants. 

“Buyouts are an increasingly important way to help people relocate to safer locations,” said Rob Moore, a director within NRDC’s Climate Adaptation Division. “They not only allow high-risk property owners to move somewhere safer, but the newly acquired properties can become part of the community’s longer-term climate resilience plans.” 

The current administration has canceled billions of dollars in previously approved Federal Emergency Management Agency (FEMA) resilience grants and halted or scaled back key mitigation programs, leaving communities with more risk and fewer federal options.  This report, Funding and Financing Voluntary Buyouts and Relocation: Going Beyond Federal Grants, lays out six specific ways states or localities could step up as the federal government steps out.  

"In the current federal environment, having more flexible and local funding streams is more important than ever," said Grace Rogers, Manager for Climate Resilient Coasts and Watersheds at EDF. "Proactively funding and financing buyouts, rather than waiting to act until disaster recovery funds are made available, enables state and local governments to be more responsive to communities' adaptation needs."

Climate change is causing people to rethink where they live, but most do not have the resources to relocate without some level of assistance. Voluntary home buyouts are an essential part of helping people find their way to a safer location. This report shows local governments can support residents with the costs of relocating by using familiar tools in new ways or deploying new tools to fund buyouts. 

The report highlights six funding and financing mechanisms that states and local governments can use to supplement, or in some cases replace, federal grants:

●      Municipal bonds: Serving as a funding source for buyout programs by providing upfront capital to purchase disaster-prone properties and reduce long-term disaster risk.

●      Locally assessed fees and taxes: Leveraging stormwater fees, special district fees, real estate transfer taxes, or targeted sales taxes to support ongoing buyout programs and match federal grants when available.

●      Parametric insurance and catastrophe bonds: Securing fast, flexible payouts after a disaster through parametric insurance or catastrophe bonds.

●      Safeguarding Tomorrow Revolving Loan Fund (STRLF): Capitalizing state-specific low-interest revolving loan funds that support flood mitigation and resilience projects.  

●      Clean Water State Revolving Fund (CWSRF): Typically administered by state environmental agencies, this could be a source of financing for post-buyout land restoration. 

●      Leveraging insurance claims: Using payouts from flood insurance or homeowners’ policies to offset acquisition costs and stretch limited public dollars further.

Those buyouts have helped remove thousands of repeatedly flooded homes, but the process is often so long and complex that many homeowners drop out or sell to the next unsuspecting buyer just to avoid the next disaster. Nationwide, previous NRDC research found that the average buyout project funded by FEMA has taken more than five years to complete, from the time a flood occurs until the project’s closing documents are filed.

“Federal cuts in disaster and climate-adaptation funding are creating a significant gap for communities nationwide,” said Kristin Marcell, Climigration Network Director. “State and local partners are asking for actionable, sustainable ways to fund voluntary home buyouts that help residents in dangerous situations move to safer, affordable homes. This report lays out practical alternatives and lessons from communities that can be applied and shared nationally.”

Most voluntary buyouts have been funded by FEMA, the U.S. Department of Housing and Urban Development (HUD), and other federal programs. Since 1993, FEMA has provided more than $6.8 billion to support more than 45,000 buyouts, with most funds distributed after federal disaster declarations. 

The report highlights places where local governments have taken the initiative to finance buyout programs like in North Carolina, where the Charlotte–Mecklenburg Stormwater Services (CMSWS) agency used stormwater fees to conduct buyouts using funding from a stormwater fee and acquired nearly 500 properties. New Jersey’s Blue Acres program focuses on voluntary buyouts of flood-prone properties. Since inception, the program has purchased approximately 1,200 properties (about 700 after Superstorm Sandy in 2012) and plans to acquire hundreds more using a mix of bonds, state appropriations, and federal funding. While the New York Office of Resilient Homes and Communities is administering the $250 million in bond funds to purchase flood prone properties from willing sellers, demolish and remove the structures, and facilitate the restoration and stewardship of these properties.

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NRDC (Natural Resources Defense Council) is an international nonprofit environmental organization with more than 3 million members and online activists. Established in 1970, NRDC uses science, policy, law and people power to confront the climate crisis, protect public health and safeguard nature. NRDC has offices in New York City, Washington, D.C., Los Angeles, San Francisco, Chicago, Beijing and Delhi (an office of NRDC India Pvt. Ltd).

With more than 3 million members, Environmental Defense Fund creates transformational solutions to the most serious environmental problems. To do so, EDF links science, economics, law, and innovative private-sector partnerships to turn solutions into action.