Neighborhood change during managed retreat: buyouts, housing loss, and White flight

By demolishing housing, hazard mitigation buyouts remove vulnerable structures. However, if the land is not maintained or turned into a neighborhood asset, it can become a disamenity. For this reason, it is important to track the long-term effects of buyouts, a critical tool for managed retreat, at the neighborhood scale. This study examines whether buyouts are associated with neighborhood change, measured as change in housing stock and in the racial mix of residents. Using data from North Carolina, where 4800 buyouts were implemented after hurricanes in the 1990s, the study finds that each additional buyout lowered 20-year housing growth in the neighborhood by 1.5 housing units on average, after controlling for owner-occupancy rates, racial composition, and region of the state, among other factors. Racial effects were most pronounced in neighborhoods near buyouts, where spillover effects occurred. Specifically, adjacency to a high-buyout neighborhood was associated with growth in the share of Black residents and decline in the share of White residents. These findings are consistent with the notion that buyouts are associated with decreased housing growth, deterioration of existing housing, and White flight. The discussion also considers that the neighborhood-level reduction in housing growth may decrease future flood risk. Taken together, the findings suggest the need for practices that mitigate potential negative social impacts of buyouts and for research that encompasses the broader neighborhood effects of property-based managed retreat.