Minot, North Dakota Floodplain Buyouts and Affordable, Resilient Housing “Buy-In” Program

Executive Summary

In January 2016, the U.S. Department of Housing and Urban Development (HUD) awarded the City of Minot, North Dakota $74.3 million through its National Disaster Resilience Competition (NDRC) to implement several projects to improve the city’s resilience to flooding from the Souris River. In June 2011, Minot experienced a catastrophic flood. The flood, in combination with a “boom-bust” oil economy and lack of affordable housing, motivated the city to envision a more resilient future for its residents, economy, and environment. Among its winning projects, the city will implement a voluntary buyout program for homes most vulnerable to flooding along the Souris River and make resilient, affordable housing investments in higher, upland “Resilient Neighborhoods” located outside of the city’s floodplain to relocate homeowners and renters. Minot’s unique “buyouts for buy-in” model will help to preserve the city’s tax base and community cohesion. The city will also undertake projects to restore the floodplain, preserve open space, create recreational greenways, and provide resilient city hubs that offer economic job development and other services. Projects will be implemented between 2017 and 2022. Local policymakers and planners can consider the Minot example to equitably relocate people and development out of vulnerable flood or coastal areas to safer, higher ground as a part of comprehensive managed retreat strategies. 

 

Background

In June 2011, Minot, North Dakota experienced a catastrophic flood. The Souris River, which runs along the town of 50,000 residents, surpassed its previous all-time-high record, reaching upwards of 1,560 feet. As a result of the flood, between three and four thousand homes were affected, and around 12,000 residents were forced to evacuate.1  In addition, the city was experiencing a cyclical economy and an additional loss of residents due to a “boom-bust” oil industry with a lack of local jobs and affordable housing during bust cycles. Minot was awarded funding through HUD’s NDRC to implement several projects through a phased approach over five years (2017–2022) to increase the city’s resilience to flooding and economic extremes. 

Minot’s winning application, which lays out its project plans and purposes, was drafted in two phases to comply with NDRC requirements. 

  1. Phase 1 called for identifying and preserving land within the town that could increase flood storage capacity, as well as provide green space, which would enhance community health and quality of life.
  2. Phase 2 built on the concepts of the first phase, including open space preservation, liveable and resilient neighborhoods, and cultivating and maintaining strong leadership. Phase Two was informed by a community-driven engagement process regarding how the city could best address these and other issues identified in Phase One. As a result, Phase 2 focused on creating different types of affordable, resilient neighborhoods of varying densities, and included the development of a prioritization process to identify the areas around the Souris River where the city could maximize flood storage and restoration opportunities. 

 

Managed Retreat Examples

Minot’s Phase 1 and Phase 2 NDRC application includes several components that will serve as a plan to guide its actions to become more resilient. The projects featured below can help to facilitate the voluntary transition of people in Minot out of the floodplain to higher ground areas that contain affordable housing options. Other riverine or coastal jurisdictions can consider Minot’s model for designing retreat strategies that couple buyouts with opportunities for residents to stay local by investing in affordable, resilient housing developments. This “buyouts for buy-in” strategy to enable residents to relocate within Minot after being bought out can minimize the social and economic costs of retreat, including potential losses to the local tax base if people move outside of Minot. Minot will also aim to restore bought-out properties to maximize flood resilience and community benefits. 

Buyouts and Affordable Housing Projects

Combined, the city’s Phase 1 and 2 applications included the following projects related to retreat that would enhance Minot’s three overall goals of flood risk reduction, affordable and resilient neighborhoods, and economic resilience: 

  • Souris River Decision Support Tool: The development of a decision-development tool that provides a basin-wide model of the Souris River, analyzing the implications of floods.
  • Strategic Buyout Program: The implementation of a buyout program targeting the most vulnerable, lowest-lying areas along the river, which include several mobile home parks. The buyout program includes the potential relocation of over 400 of these mobile homes, as well as the acquisition and relocation of 340 additional homes. The city proposes to use at least $33 million in funding from NDRC to buyout low-to-moderate income (LMI) households, in addition to leveraging an additional $90 million in funding from the State of North Dakota for LMI and non-LMI households to buyout all of these properties. The acquired areas (1.2 acres of forest and 10 acres of prairie) can provide flood storage, as well as an opportunity to develop ecological restoration/public use areas, which can eliminate the risk of future redevelopment.
  • Creation of Affordable, Resilient Neighborhoods (“Buy-In” Program): After the 2011 flood, the city lost many of its long-time residents and skilled workers who were unable to relocate within Minot due to a lack of affordable housing in desired areas. The new Buy-In Program will create 609 new affordable housing options total, including 359 rental units and 250 homes in three new, “Resilient Neighborhoods,” which will enable both bought-out or relocated and new residents, including university students and the city’s elderly, disabled, homeless, and financially burdened, to “buy-in” to Minot. Planning for the Resilient Neighborhoods will include studies done by the local college into the best construction materials, most efficient and green buildings, and energy efficiency. The three Resilient Neighborhoods are located outside of the city’s Special Flood Hazard Area or 100-year floodplain (i.e., a 0.1% annual chance of a flood) and will provide access to jobs, transportation, and commercial and professional services. According to a benefit-cost analysis completed by Minot in its Phase 2 application, this project could allow the city to retain approximately $359 million in income over a ten-year period. 
  • Development of Resilient Open Spaces: The creation of open spaces will allow for additional flood storage, which can help to eliminate or reduce the damage associated with future flood events. 
  • Foster Economic Resilience and Diversification: The development of a Center for Technical Education in Minot will increase the employability of Minot residents who will no longer have to travel 85 miles to the nearest community college and technical education center. 

 

One of the primary reasons Minot proposed to construct new affordable homes was so that the "most vulnerable residents including the elderly, disabled, homeless, and financially burdened will have affordable housing options linked to transit, jobs, and services." The buy-out program provides families and individuals at the greatest risk of flooding, and least able to afford to relocate out of harm’s way, the financial ability to do so. 

In 2011, 42.9% of Minot’s population had incomes below 80% of the median income and 31% of Minot’s LMI population lived within the flood inundation area. 

To support the city’s Buy-In Program, Minot, in partnership with the North Dakota Housing Finance Agency, created the Resilient Homebuyer Program in February 2018. The program provides Minot residents - whose homes were either damaged by the 2011 flood or are being bought out through the NDRC process - with affordable mortgage loans and a maximum of $60,000 in financial assistance to purchase a new home. The program prioritizes eligibility for low- and moderate-income (LMI) homebuyers, including existing homeowners and renters, impacted by the flood. In addition, total household income cannot exceed current LMI income limits and new home prices cannot exceed a maximum price determined by North Dakota Housing Finance Agency annually (in 2018, a new home price cannot exceed $253,809). 

 

Community Engagement

Throughout the NDRC process, the city engaged with residents at over 60 public meetings and assembled a Community Advisory Committee and Vulnerable Populations Committee to inform the planning, development, and design of these projects, including the three new affordable, Resilient Neighborhoods. As Minot implements its projects and spends its NDRC funding, it continually updates residents on the city’s progress and provides additional opportunities for input at town hall meetings and other local convenings.  

 

Funding

HUD awarded Minot $74.3 million in Community Development Block Grants-Disaster Recovery through NDRC. As of September 2019, Minot has spent more than $22 million of the total grant and used it to leverage more than $97 million in additional funding from other sources. 

 

Next Steps

The flood in 2011 ultimately resulted in damages reaching almost $700,000,000.2  If completed as planned, these projects could have reduced the $1-billion cost of recovery from the 2011 flood by almost 70%, or $478,340,000. As of September 2019, 143 properties have been acquired to be bought out and 94 have been demolished; 52 people have applied to the Resilient Homebuyer Program; and the affordable housing projects are in various stages of implementation. 

For more information about Minot’s plan for resilience or updates, visit the city’s website for progress reports entitled, FYI on NDR, which are provided for almost every month since June 2018 to the present.

 

 

Publication Date: January 2016

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