A new bill would create South Carolina's first revolving fund dedicated to flood buyouts after a year of drenching events flooded scores of homes across the state.
The bill, prefiled by state Sen. Stephen Goldfinch, R-Murrells Inlet, would establish the "South Carolina Resilience Revolving Fund," which would offer low interest loans and grants to help remove homes from floodplains.
Goldfinch, who represents a vast swath of the coast from Charleston County to Horry County, said he has watched constituents pass on federally funded buyout programs because they often require a 25 percent match to be paid locally. That money often must come from either the homeowner or local government.
Some of the most vulnerable flood victims end up slowly repairing their homes because they have no other option.
"They start scrapping together money to put flooring back down and put sheet rock back up, and what do you know? They get flooded again," Goldfinch said.
State Rep. Heather Ammons Crawford, R-Horry County, has filed a companion bill in the House.
The legislation would provide $2 million from the state to kick start the account. Goldfinch said he eventually hopes to find funding of up to $25 million, possibly with money from federal Community Development Block Grants.
As the bill is debated in the General Assembly, he might also add a provision encouraging participants to relocate into opportunity zones by offering loan forgiveness if they do.
The federal opportunity zones program, unveiled this year by U.S. Sen. Tim Scott, R-S.C., encourages investors to target their capital at one of the specified zones by offering them a tax break. While the program has been heralded as a tool to encourage redevelopment of downtrodden areas, it also includes some prime real estate in some metro areas.
Buyout projects, however, tend to be costly. One under way in Horry County that was put into motion after Hurricane Matthew two years ago is funded with $11 million from the Federal Emergency Management Agency.
Goldfinch said the state's revolving fund would be most useful in helping flood victims sign onto federal programs by financing the required 25 percent match.
Jason Crowley, of the Coastal Conservation League, said if the bill passes with some seed money, it could help certain homeowners.
"This would be a great way for local governments to be able to help residents who want to get out of the floodplain have that opportunity," he said.
Goldfinch, one of the few coastal officials who supports offshore drilling, has occasionally sparred with environmental groups, such as the league. But Crowley complimented the bill, saying it could lead to the creation of an important tool for communities across the state — including inland locations like Columbia, which also have flooded in recent years.
"It's an opportunity to highlight that flooding is not partisan," Crowley said. "We have not always seen eye-to-eye with Sen. Goldfinch on some of these issues, (but) this was exciting to see something so novel be introduced."
David Salvesen, who studies land use and disaster recovery at the University of North Carolina at Chapel Hill, said the legislation includes several of the best practices for a flood mitigation program.
Salvesen and other researchers have analyzed the financial outcomes from buyout projects in North Carolina, finding that communities did the best when they avoided pock-marking neighborhoods with random empty lots.
Also, such projects worked better when they encouraged the people moving to relocate within the same tax base. Goldfinch's legislation incentivizes both of those outcomes.
"There's a lot to like about this bill," Salvesen said
One drawback is that using the revolving fund for local match money means communities still would depend on a federal disaster declaration before they could apply for FEMA money for a buyout program. Salvesen said some of the most progressive programs, such as one in Charlotte, are self-sustaining and don't depend on a disaster to happen before buyouts begin.
Ultimately, the fund wouldn't fix one of the most fundamental issues in floodplain management: stopping development from happening in vulnerable areas in the first place.
But Salvesen said that one provision in the bill, which would bar the purchase of any home built after July 1, 2020, would put localities on notice that state money won't help save them if new homes are built on flood-prone land.
Buyouts can provide significant benefits when well-planned, advocates add.
"There’s a lot of evidence to show that this kind of mitigation pays for itself," Salvesen said.