Austin’s flood-prone home buyouts puzzle locals, leaders

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AUSTIN (KXAN) — An ongoing city program to buy out swaths of homes in flood-prone parts of South Austin has puzzled some homeowners and raised questions from a city leader about inflated appraisals.

City council pushed along $50 million in non-voter approved debt, in the form of certificates of obligation, Thursday, for the ongoing buyout programs in neighborhoods along Onion and Williamson creeks, where multiple floods have devastated homes and killed residents in recent years.

City officials told KXAN some home appraisals in flood-prone areas have increased year over year due to high demand, desirable creek frontage and remodeling done with insurance money. The purpose of the buyouts is to ultimately remove people and property from danger. The Austin Watershed Protection Department oversees the buyout program.

City councilwoman and realtor Ellen Troxclair said she’s seen appraisals for certain homes that appear inflated, and the city has sought to buyout homes that have never flooded.

“I certainly understand the need to help people who have found themselves in a bad situation,” Troxclair said. “But the reality is, when you look at the average market value the average sale price of homes in these areas versus what the city of Austin is paying for them, there is a significant difference.”

When KXAN visited Onion and Williamson creek neighborhoods Friday, several homeowners still living in buyout areas unburdened themselves with a mix of concerns about the programs. One Onion Creek resident said the city did not offer him enough money to justify selling his home.

Another resident, Russell Julian, who lives next to Williamson Creek, said city-hired appraisers placed significantly divergent values on neighboring Heartwood Drive properties. Julian said he turned down city requests for a buyout. Years ago, Julian hired an engineer and paid to have his home elevated by four feet, which took it out of flood danger.

“The discrepancies are incredible in buyout appraisals,” Julian said.

Overall the city has so far bought 715 homes, and it plans to buy 138 more. Buyouts along the two creeks have cost the city $125.6 million, including $8 million from the U.S. Federal Emergency Management Agency, according to records provided by the Austin Watershed Department.

At an Austin City Council meeting on Feb. 4, 2016, Troxclair said she was concerned about average appraisals for some homes jumping nearly $100,000 in a single year. At the meeting, Alex Gale with Austin Real Estate Services, said appraisal averages for those homes increased from $276,000 to $360,000 from 2014 to 2015.

In an interview with KXAN on Thursday, Gale said the concerns over inflated appraisals have originated more in Williamson Creek rather than Onion Creek.

Gale said values of many properties have gone up, despite being in danger of flooding.

Homeowners “took their flood insurance money and completely renovated and remodeled their homes. So, that led to these homes, the fair market value of these homes, being a little bit higher,” he said.

The Onion Creek buyout program got its start after the historic Halloween floods of 2013. In September of 2014, the city approved $60 million in funding for the watershed department to spend on buyouts. In March of 2015, City Council approved purchasing 232 homes in the 100-year floodplain. The city is purchasing those homes in two phases, placing priority on higher-risk homes, according to the city.

In addition to buying properties, the city gives assistance money to help homeowners afford to purchase and move into comparable homes. The city also pays for demolition of the homes it purchases, which can include asbestos abatement. The program has assisted moving families out of harms way and into new homes.

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