FEMA Flood Buyouts Pay Households of Color Less, Studies Find
Households of color receive at least 6 percent less in buyout money than white households when the government purchases flood-damaged homes.
That estimate comes from recent working-paper research on the federal buyout system. A separate 2022 study by K. Jowers put the shortfall at around 8 to 10 percent for families of color relative to white families. The Rice University Kinder Institute has described the research as the first nationwide study to focus specifically on racial disparities in the FEMA flood buyout program, while reporting at the time summarized the finding as government buyouts disproportionately benefiting whiter, wealthier communities. NBER Working Paper GWU Study Kinder Institute E&E News
The program does not work as a direct federal purchase. It runs through federal-state cost sharing, a bit like splitting a bill, with Washington paying part and state or local partners paying the rest. FEMA's Hazard Mitigation Assistance grant programs provide funding for eligible steps that reduce future disaster losses. Property acquisition and structure relocation, in FEMA's definition, involves moving an existing building to land outside of a hazard-prone area. In practice, FEMA directs people who ask about buy-out of flooded property to contact their Local Emergency Management Agency to see if a buyout program is available in their area. On 2026-05-08, FEMA approved an additional $59 million for more than 150 property buyouts. FEMA Guidance FEMA FAQ
Where buyouts happen is uneven. The average majority-white FEMA buyout area had an almost 90 percent chance of flooding by 2050. Homes in U.S. neighborhoods with large Black or minority populations once marked as undesirable for loans face greater danger of flooding. A flood recovery grant formula allocated disproportionately fewer funds to Black homeowners than white homeowners after Hurricane Katrina. GovExec Reuters University of Chicago Law Review
Who can move out of risk is also uneven. Renters, Black homeowners, and low-income homeowners are less likely to move when they live in neighborhoods with flood risk, according to research published 2026-08-01. Black and Hispanic homebuyers pay 3.3% to 3.6% more than white buyers for equivalent housing outside flood zones. The gap shows up on both sides of the deal. Lower compensation on sale. Higher entry price elsewhere. Demography Box-Couillard Draft
The broader context here is a mitigation tool designed around property values and local administration that now reads as a question of fairness. Buyouts depend on local governments to apply, on appraisals, or expert estimates of home value, to set offers, and on homeowners to have the resources to relocate and accept. Each step is formally race-neutral. Each step can still add to prior differences in wealth, appraisal, housing supply, and access to alternative housing.
Looking at what this means for policy, the tension is between risk reduction and equity. Targeting the highest-probability flood areas can reduce future losses efficiently. It can also concentrate federal dollars where home values are already higher and where residents are better positioned to navigate a voluntary, multi-year process. Adjusting formulas, appraisal practices, or relocation support would shift who benefits and who moves. Leaving them unchanged preserves the current pattern. For practitioners, the numbers narrow the question to offer levels, take-up rates, and destination outcomes, not only to acres removed from the floodplain.
