Federal authorities will spend $42 million to buy homes in Palos Verdes damaged by landslide

The federal government plans to spend $42 million to buy out homeowners hit hardest by ongoing landslides in Rancho Palos Verdes and then transform their properties into lower-risk open space.

The program, part of the Federal Emergency Management Agency’s Hazard Mitigation Grants, provides one of the first long-term solutions for residents of the landslide-stricken region, which has experienced periods of increased land movement for decades – despite the scale and speed of movement in recent months has been unprecedented.

Officials predict they will have enough money to buy out 20 property owners in the Portuguese Bend area, most of whom face increased property damage and indefinite utility shutoffs as the land moves. Submitting an application for redemption is voluntary; no one will be forced to sell their home to the city.

Homeowners can expect to receive offers equal to 75% of their property’s pre-disaster fair market value before alternating winters with heavy rains trigger a complex of ancient landslides in the area. To minimize future natural disasters and associated losses, the city would then demolish the houses and allow no further development.

“This buyout program provides a viable path forward for the most vulnerable members of our community, offering the opportunity to relocate and rebuild with significant compensation,” Rancho Palos Verdes Mayor John Cruickshank said in a statement. He said dozens of residents had suffered unimaginable losses as a result of the recent land displacement, “with some facing the real prospect of losing their homes entirely.”

The announcement comes months after residents sought state and federal aid amid escalating land movements that have destroyed homes, required near-continuous road repairs and displaced utility providers. However, only a portion of the damaged and at-risk properties in the area may be approved for foreclosure. In recent months, landslides have damaged about 200 houses in three areas.

Mike Hong, who designed and built his Portuguese Bend home on a lot he bought in 2014, hopes a buyout will be available to him and his wife.

“What they are offering is a lifesaver for most people, including us,” said Hong, 65, although he is concerned about how much the proposal will cost. “It’s bittersweet – it gives us a chance to save our family’s finances, but you see a labor of love being destroyed.”

Hong estimates his home was worth about $3.6 million two years ago (likely higher property values ​​in the area since it’s relatively new), but he said he’ll wait and see what kind of offer, if any, comes in .

The announcement of the buyback program follows the first positive word of significant success in months. Earlier this month, city officials reported that the rate of land movement in some places had slowed by 80% compared to the previous month, primarily due to new deep drainage wells the city installed between August and October. The wells pumped out millions of gallons of groundwater, causing landslides.

Hong said even if they weren’t accepted into the buyback program, the slowdown in land traffic that made his home one of about two dozen that recently had power restored was welcome news.

“We can still get through this, we can take the risk if it doesn’t work out,” Hong said. “Anyway, we will go ahead and apply.”

However, not everyone jumps at this opportunity. Sally Reeves and her husband, who have lived in their home since 1982, decided not to apply.

“We are determined to stay,” Reeves, 81, said. “We’re quite financially motivated now.”

They’ve been in the middle of a major renovation for weeks after a crack in their home pushed rooms apart. Like several other residents in the area, they built their home on steel beams and adjustable timber structures, which she is confident will now be able to withstand any future earth movement.

But Reeves said she understands why some people might be willing to accept a reasonable offer to leave and start over.

“There are people here who feel trapped,” she said. “I’m excited for those who can take advantage of it.”

The city will prioritize homes in the buyout – eight homes that are red or yellow – officially considered unsafe to enter or uninhabitable, respectively. Next on the priority list will be properties with significant damage, which officials believe could soon require residents to vacate. Then, city officials said, it will look at about 250 more homes that remain without power.

If selected, the city would purchase the property for 75% of the appraiser’s estimate of the fair market value of the land and improvements as of Dec. 1, 2022, less certain transaction and demolition costs.

While the buyout program has historically been used for property owners in flood-prone areas, FEMA, the California Governor’s Office of Emergency Management and the city worked together to adapt it to this landslide situation, said Ara Migranian, RPV city manager.

The property acquired by the city must be converted to open space. The city will be responsible for the demolition of any structures or improvements, including access roads to the site.

“It all needs to be removed, reclassified, and it will be permanently restricted to open space,” Migranian said.

Interested property owners should request a property inspection from the city by November 4th.

FEMA and CalOES will review whether homes seeking foreclosure meet all eligibility criteria, which includes a particularly tricky part for many residents in this landslide zone: The structures must still be on the property for which they were legally permitted. As hundreds of feet of traffic have displaced homes from their original locations in recent years, it was not immediately clear how many homes would no longer qualify.

Another point that has confused some residents is that once the buyout is approved, the property owner will be required to release the city and all other entities from liability. This is a problem for many who have sued or are planning to sue for losses associated with moving land.