The federal government plans to spend $42 million to buy out the homeowners hardest hit by the ongoing landslides in Rancho Palos Verdes, then convert their properties into lower-risk open space.
The program, part of the Federal Emergency Management Agency’s hazard mitigation assistance grants, provides one of the first long-term solutions for residents in the landslide-ravaged region, which has for decades gone through periods of increased land movement — though the scale and speed of the movement in recent months has been unprecedented.
Officials project that they’ll have enough money to buy out 20 property owners in the Portuguese Bend area, the majority of whom face increased property damage and indefinite utility shutoffs due to land movement. Applying for a buyout is voluntary; no one will be forced to sell their home to to the city.
Homeowners can expect to receive offers equal to 75% of their property’s predisaster fair market value, before back-to-back winters of heavy rain set off the area’s complex of ancient landslides. With a goal of minimizing future disasters and related losses, the city would then demolish the homes and ensure no future development.
“This buyout program provides a viable pathway forward for our most vulnerable community members, offering the opportunity to relocate and rebuild with meaningful compensation,” Rancho Palos Verdes Mayor John Cruikshank said in a statement. He said dozens of residents have endured unimaginable losses from the recent land movement, “with some facing the real prospect of losing their homes entirely.”
This announcement comes months after residents have pleaded for state and federal assistance amid escalating land movement that has ruined homes, required almost incessant roadway repairs and forced out utility providers. However, only a fraction of the damaged and threatened properties in the area can be approved for the buyout. About 200 homes across three neighborhoods have been affected by the landslide in recent months.
Mike Hong, who designed and built his Portuguese Bend home on property he bought in 2014, is hoping the buyout will be available to him and his wife.
“What they’re offering is a lifesaver for most people, and us as well,” Hong, 65, said, although he is concerned about how much the offer would be. “It’s bittersweet — it gives us a chance to save our family’s finances, but you’re seeing the labor of love destroyed.”
Hong estimates that his home would have been worth about $3.6 million two years ago — probably on the higher end of neighborhood property values because it’s relatively new — but he said he’ll wait and see what is offered, if there is one.
The announcement of the buyout program follows some of the first positive words in months about the landslide. City officials reported this month that the rate of land movement decelerated as much as 80% in some locations compared with the month prior, primarily due to new, deep dewatering wells that the city installed in from August to October. The wells have pumped out millions of gallons of groundwater that drives landslide movement.
Hong said that even if they aren’t accepted for the buyout program, the slowing land movement — which led to his home being one of about two dozen that recently regained electricity — has been welcome news.
“We could still ride it out, we could take our chances if this doesn’t work out,” Hong said. “Regardless, we will go ahead and put the application in.”
Not everyone, however, is jumping at the opportunity. Sallie Reeves and her husband, who have lived in their home since 1982, have decided they won’t apply.
“We’re committed to staying,” Reeves, 81, said. “We’re pretty financially committed now.”
They are weeks into a major renovation after a fissure forced apart rooms in their home. Like several others in the area, they have put their home up on steel beams and adjustable woodwork, which she feels confident can now ride out any future land movement.
But Reeves said she understands why some people may be ready to take 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 for the buyout of the eight homes that have been red- or yellow-tagged — officially deemed unsafe to enter or unlivable, respectively. Next on the priority list will be properties with significant damage that officials believe could soon require residents to move out. Then, consideration will be given to the approximately 250 additional homes that remain cut off from electricity, according to city officials.
If selected, the city will purchase the property for 75% of what an appraiser determines to have been the fair market value of the land and improvements on Dec. 1, 2022, minus some of the transaction and demolition costs.
Although the buyout program is historically used for property owners in flood-prone areas, FEMA, the California governor’s Office of Emergency Services and the city have worked together to customize it for this landslide situation, said Ara Mihranian, city manager for Rancho Palos Verdes.
Properties that are acquired by the city must be converted to open space. The city would be in charge of demolishing any structures or improvements, including driveways on the property.
“All that has to be removed, regraded, and it would be deed-restricted for open space in perpetuity,” Mihranian said.
Interested property owners must request a property inspection from the city by Nov. 4.
FEMA and Cal OES will check whether the homes seeking a buyout meet all eligibility criteria, which include a particularly tricky point for many in this landslide zone: Structures must still be on the lot for which they were legally permitted. With hundreds of feet of movement in recent years pushing houses off their original spots, it wasn’t immediately clear how many homes would no longer be eligible.
Another point that has tripped up some residents is that upon approval for the buyout, the property owner will be required to release the city and all other agencies of liability. That’s an issue for many who have sued or plan to sue for losses related to the land movement.