• Teams: NY Climate Adaptation >> Channel: Benefit Cost Analysis of Buyouts >> Tab: “NYS Proprety Tax Revenue…”
• https://rpubs.com/mccannecology/556131

There is anecdotal information that municipalities (i.e., villages, towns, cities) are opposed to participating in voluntary buyouts because of the perceived loss of property tax revenue that would occur and its impacts on municipal budgets.

It is unclear to what extent the property tax revenue of municipalities in New York state is at risk to flooding.

This analysis attempts to answer: If coastal municipalities in New York state were to offer voluntary buyouts to the properties most at-risk to chronic inundation, how would the municipal tax revenue be impacted?

Chronic inundation is defined as an area that floods at least 26 times per year (i.e., every other week on average).

• Under most sea level rise scenarios and time horizons, most New York State communities have <5% of their property tax revenue at risk of chronic inundation. (Stony Point, NY is a notable exception).
• This result changes under high sea level rise scenarios by the end of the century (2100), with 7 communities in New York State with >10% of their property tax revenue at risk due to chronic inundation.

Assuming static population, building stock, property value, tax rates in the future

These results suggest that if voluntary buyouts were offered to homes that will experience chronic flooding due to SLR, municipal property tax revenue will remain largely intact.

The loss of municipal property tax revenue may be offset (partially or completely) by avoided costs associated with infrastructure delivery, emergency services, etc. and policies that incentive relocation within the community.

Data for this analysis are from the Union of Concerned Scientist’s (UCS) Underwater: Rising Seas, Chronic Floods, and the Implications for US Coastal Real Estate.

• UCS combined data on chronic inundation (defined above) from Dahl et al. 2017 and Spranger-Seigfried et al. 2017 with real estate data from the Zillow Transaction and Assessment Database (ZTRAX).
• The data were prepared for the entire coastal United States, but only New York state was considered in this analysis.
• Communities are defined by US Census Bureau county subdivisions. In NY these correspond to towns and incoporated places (cities).

The data prepared by UCS use three SLR scenarios from the 2014 National Climate Assessment (Parris et al. 2012).

• Low: 1.6 feet (0.5 m) above 1992 levels by 2100. This scenario is a proxy for conditions under the Paris Climate Agreement.
• Intermediate: 4.0 feet (1.2 m) above 1992 levels by 2100 [RESULTS NOT REPORTED HERE]
• High: 6.6 feet (2.0 m) above 1992 levels by 2100. This scenario includes rapid ice sheet loss.

• The data provided by UCS assume static population, building stock, property value, tax rates, etc. in the future. This is certainly not true and will likely lead to an underestimation of risk as most recent trends have shown an increase in development in the floodplain. This might be the most consequential simplification of these data and analysis.

• The data provided by UCS only consider coastal flooding due to sea level rise. Other types of flooding (e.g., riverine, increased precipitation, groundwater, storm surge, etc.) are not included.

• The data provided by UCS do not consider localized coastal defenses such as seawalls or levees. Therefore, flood risk may be overestimated for areas where localized coastal defenses have been or will be pursued.

• Due to inconsistencies, data for Kingston, Newburgh, Poughkeepsie, and Rye were removed from the analysis. For these communities, differences between the town and the city could not be parsed in the dataset.

• The five boroughs of New York City (Bronx, Brooklyn, Manhattan, Staten Island, Queens) are reported individually here with property tax revenue reported at the borough-level. In reality, all five boroughs share a common municipal budget.

• This analysis examines the property tax revenue generated by properties that are at risk of chronic inundation to understand the impacts of voluntary buyouts of those properties on the municipal budget. This analysis represents a “worst case scenario” where properties are acquired and the homeowners do not relocate within the community. It is possible to mitigate the loss of municipal tax revenue caused by voluntary buyouts by providing desirable and safe relocation opportunities within the community.

Values above bars indicate the number of homes at risk in each municipality.

Values above bars indicate the number of homes at risk in each municipality.

Values above bars indicate the number of homes at risk in each municipality.

Values above bars indicate the number of homes at risk in each municipality.

• 26 to 38 communities in New York State will have homes that experience chronic inundation (i.e., flooded 26 times per year or every other week on average) due to sea level rise in 2060.
• Among these communities, the average percent of the municipal property tax revenue that is at risk due to chronic inundation is 1.17% to 2.07% depending on sea level rise scenario in 2060.
• The community with the greatest property tax revenue at risk due to chronic inundation in 2060 is Stony Point, NY. With 25.2% to 25.4% of total property tax revenue at risk depending on the sea level scenario.

• 33 to 55 communities in New York State will have homes that experience chronic inundation due to sea level rise in 2100.
• Among these communities, the average percent of the municipal property tax revenue that is at risk due to chronic inundation is 1.32% to 5.14% depending on sea level rise scenario in 2100.
• Stony Point, NY is the community with the greatest property tax revenue at risk in 2100 under a low sea level rise scenario (25.35% of total property tax revenue).
• Long Beach, NY is the community with the greatest property tax revenue at risk in 2100 under a high sea level rise scenario (92.02% of total property tax revenue).

There is not a significant amount of information in the peer-reviewed or grey literature on the tax impacts of property acquisition. A literature review found six studies that report on some aspect of this topic.

• Freudenberg et al. 2016. Buy-In for Buyouts: The Case for Managed Retreat from Flood Zones. Lincoln Institute of Land Policy, Cambridge, MA.
• Lowrie & Kutner. 2016. Mystic Island Voluntary Buyout Health Impact Assessment. Assessing Health Outcomes of Post-Sandy Decision-Making. Rutgers University.
• Salvesen et al. 2018. Are Floodplain Buyouts a Smart Investment for Local Governments. Final Report for the UNC Policy Collaboratory.
• Schiff et al. 2015. Evaluating the Costs and Benefits of Floodplain Protection Activities in Waterbury, Vermont and Willsboro, New York, Lake Champlain Basin, U.S.A. Lake Champlain Basin Program Technical Report No. 78.
• Western Carolina University (WCU) Program for the Study of Developed Shorelines. 2019. Coastal Hazards & Targeted Acquisitions: A Reasonable Management Alternative. North Topsail Beach, North Carolina Case Study.
• Shi & Varuzzo. 2020. Surging seas, rising fiscal stress. Cities

Reports costs and benefits incurred by different parties (e.g., individuals, municipalities, federal government) and does not estimate a net fiscal impact on the municipality or a benefit-cost ratio. But it does report lost tax revenue due to potential buyouts as a percent of total municipal budget. Results were:

• Oakwood Beach, NY: <0.01%
• Milford, CT 1.36 - 5.78%
• Mastic Beach, NY: 1.07 - 5.9%
• Wayne, NJ: 1.08 - 5.38%
• Sayreville, NJ: 4.23 - 12.91%

Properties are considered flooded at 365 times per year - more conservative than UCS data

This analysis capitalized on the availability of the dataset prepared by The Union of Concerned Scientists, which is limited to chronic flooding in coastal communities due to sea level rise.

A next step for informing our strategy would be to conduct a similar analysis for inland communities that are prone to riverine flooding.

• Data on municipial property taxes in communities throughout New York State are available in the NYS Tax Parcel Centroid Points dataset.
• Data on assessed property value could be combined with municipality-specific tax rates to determine property tax revenue generated by each property.
• A measure of flood vulnerability for inland communities would need to be developed that is comparable to the definition of chronic flooding (26 times per year) that was used in this analysis.