Details of Blue Acres program can be tricky

UNION COUNTY — Through the Blue Acres program, the state has already begun using $300 million in federal funds to buy homes in flood-prone areas ravaged by Superstorm Sandy.

The Superstorm Sandy Blue Acres Acquisition Program is a part of a Green Acres Program dealing with flood-prone properties. Through this program, which is run by the New Jersey Department of Environmental Protection, homeowners are given the option to sell Sandy-damaged homes in flood-prone areas.

The buyouts are funded by a combination of federal and state funding, with FEMA’s Hazard Mitigation Grant Program providing 75 percent of this money and the DEP Blue Acres Program putting in the remaining 25 percent.

The program was designed to give homeowners the ability to choose the best option for their individual situation, but the state made it clear that they will be buying homes in “clusters” or whole neighborhoods that were ravaged by Sandy.

These homes, the state said, will be demolished and the land permanently preserved as open space and accessible to the public for recreation or conservation. The overall goal of the Blue Acres Program is to dramatically reduce the risk of future catastrophic flood damage and to help families to move out of harm’s way.

According to the state website on Blue Acres, approximately 1,000 homes damaged by Sandy that have experienced frequent flooding will be purchased by the state. Buyouts are not limited to the shore, though, with the Linden Tremley Point area being a good example of how the state is spreading this money to all Sandy-damaged areas, regardless of where they are located.

The first buyouts, according to the state, are happening in Sayreville and South River in Middlesex County, both of which were damaged by flooding from the Raritan and South Rivers from the Sandy Raritan Bay storm surge.

So far, more than 270 homes in these two communities have been approved for buyouts by FEMA and the DEP will continue to evaluate homes on a rolling basis in this area for several more months.

The question of how long the process of buying homes in flood prone areas was discussed when Democrat State Senator and Senate President Steve Sweeney visited the Linden Tremley Point area last week. Residents who spoke were frustrated by the lack of information coming their way since Blue Acres held a meeting there last fall.

At that time, a Blue Acres spokesperson told residents their particular area was approved for buyouts but there has been little information about a timeline.

According to the DEP, offers will be made to owners of all eligible properties, but the process is slow. Right now they are working in the Sayreville and South River area. The first closings there occurred in October and others are expected to be completed within a year.
Tremley Point residents seemed confused about how the buyouts will take place, with some concerned that they will be forced out of their homes. The DEP indicated that the program is “strictly voluntary” for willing sellers only.

“No houses will be condemned by the state and no one will be forced to sell their homes to the state, even if the home was severely damaged in the storm,” the state noted on its Blue acres website. Neither the state nor federal government is allowed to use eminent domain authority to acquire property for open-space purposes if a homeowner chooses not to participate or if they reject the state’s offer.

The state evaluates homes based on several critria, including flood damage, willing sellers, support from local government, clusters of homes, cost effectiveness of the buyout and opportunity for significant environmental impact and improvement to public health, safety and welfare.

Exactly how much money homeowners actually get for their homes will depend on the evaluation of an independent licensed appraiser hired by the state to conduct property appraisals. The appraisal will be based on the value of the property before Sandy, or “pre-storm” value.
This appraisal will be the basis for the amount offered for the home. If a homeowner is not happy with that amount, they can appeal the decision, but that will add several months to the buyout process.

Unlike other real estate transactions, though, the amount of the offer is not open for negotiation, according to the state. A homeowner must accept or reject the state’s offer.

Residents have also wondered if there will be any out-of-pocket cost to them, and according to the state, it is “minimal.
The state and FEMA will cover the majority of costs associated with the acquisition process, including the cost of the appraisal, title search, environmental review, survey, actual purchase and demolition.

The homeowner must pay to resolve any outstanding liens on the property, such as an open mortgage or tax liens. And, if a homeowner decides to appeal the state’s appraisal, a homeowner must pay for the second appraisal.

The question of how much red tape is involved in the buyout process depends on the situation.
The DEP created a special team to work closely with willing sellers in order to help guide them through the buyout process “as quickly and painlessly as possible.”

Tremley Point residents were hearing conflicting reports regarding the state’s handling of the buyouts. Many said they heard the state would back out of the deal if the majority of residents in a neighborhood want to sell and there is one or two that are not in favor.
According to the state’s website, the state will not back out of the deal.

“There is no need to worry about a few holdouts. DEP focuses on clusters of homes and entire neighborhoods in order to submit strong, cost-effective grant applications to FEMA,” the state indicated, adding that if a homeowner was notified they were eligible for a buyout and they decide to participate in the program, they will get an offer.

“Your neighbor’s decisions do not affect your options,” a state spokesperson said.
Other residents in the Tremley Point area were confused by the fact some residents received notification they were eligible for a buyout, while others did not.

The state pointed out that if residents did not submit an application in time for the first round of approvals by FEMA, they will have another opportunity. It is also possible that a home may not have passed FEMA’s benefit-cost analysis in order to qualify for federal funding.
This engineering calculation considers replacement value of home, damage frequency, base flood elevation, or how close a home is to flood level, acquisition cost and if it is more cost effective to repair the structure.

Because different homes in neighborhoods can vary by size, elevation and construction, the cost analysis for each structure is different.
Residents wishing to appeal any decision involving a buyout of their home can now also use their own appraiser as long as they are a state-certified residential real estate appraiser.

Flood damaged homeowners interested in selling their home to Blue Acres can contact the DEP’s Blue Acre’s program at 609-984-0500.