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Voluntary Property Buyout Program
At last night’s City Council meeting, City staff gave an update on the Voluntary Property Buyout Program in the landslide area. The City is still awaiting a formal award of $42 million in Hazard Mitigation Grant Program (HMGP) funding from FEMA for the first round of the program, which is expected to fund the acquisitions of 22 homes.
In May 2025, the City applied to join a waitlist for additional HMGP funding that could open up in the event that other statewide grant projects fell through. The application sought $29 million for a second round of the program. Earlier this week, Cal OES informed staff that additional funding indeed became available, and the City has been selected for $10.16 million, which could fund the acquisition of approximately five more homes. Staff is now revising the application based on the available funding amount and will work with Cal OES and FEMA through the process. Additionally, Staff is working on another HMGP grant application for $19 million to fund a third round of the program, which could cover approximately eight homes.
As a reminder, all remaining eligible applications after the initial 22 homes will maintain their order of priority for any future rounds of program funding based on factors such as safety concerns, structural condition, and utility statuses. While there is no definitive timeline for when the first properties can be purchased, the City still anticipates being formally awarded the round one grant from FEMA in at least several months from now.
Please know that City staff is working as quickly as possible to move through this lengthy and complex process, which involves multiple levels of close review by FEMA. Cal OES has assured City staff that the agency will be stressing to FEMA the urgency of moving the buyout program forward.
On July 1, 2025, City staff gave an update to the City Council on the status of the Voluntary Property Buyout Program. One of the 23 applicants who had advanced to the appraisals phase earlier this year has withdrawn their application. However, at this time, the City anticipates there will only be enough funding to cover the purchase of the remaining 22 properties (13 red-tagged and nine yellow-tagged). While there is no definitive timeline for when the first properties can be purchased, the City anticipates being formally awarded the $42 million Hazard Mitigation Grant Program (HMGP) grant from FEMA in several months. The City will receive the grant funds in installments as reimbursements only after properties are purchased, likely in batches of three at a time, which may take a few years to complete. The City has requested the funding be made available on a rolling basis, rather than FEMA’s standard practice of a quarterly basis, so the process can move along as quickly as possible. All remaining eligible applications will be considered for any future rounds of program funding, or if any of the 22 applicants choose to withdraw, maintaining their order of priority based on factors such as safety concerns, structural condition, and utility statuses.
In October 2024, the City of Rancho Palos Verdes, the Federal Emergency Management Agency (FEMA), and the California Governor’s Office of Emergency Services (Cal OES) announced a $42 million voluntary buyout program for property owners in the Greater Portuguese Bend landslide area whose homes have been damaged or threatened by land movement. The Voluntary Property Buyout Program is intended to help eligible homeowners relocate to safer areas by offering a fair market value for their properties based on pre-disaster appraisals. Properties acquired by the City through this program will be permanently converted to open space and deed-restricted, protecting the community from future redevelopment risks in these vulnerable areas.
The City received 85 eligible applications for the first round of program funding, placing 36 on a priority list for further review by FEMA. City staff continues working expeditiously with FEMA to advance the selection process. We now anticipate being able to offer buyouts for 23 properties (13 red-tagged, and 10 yellow-tagged) in the first round of program funding. The owners of these 23 properties have been contacted by the City to complete appraisals as part of this process.
If you have not been contacted by the City about completing an appraisal, this means your property is not among the 23 being considered for buyouts and will not advance in this round of program funding. However, all remaining eligible applications will be considered for any future rounds of program funding or if there are applicants of the 23 who choose to withdraw, maintaining their order of priority. Prioritization is based on factors such as safety concerns, structural condition, and utility statuses.
Please know that City staff is working as quickly as possible to move through this lengthy and complex process, which involves multiple levels of close review by FEMA. Each property must be carefully vetted for compliance with program rules and regulations. In the coming weeks, the City plans to onboard a consultant dedicated to managing the buyout program.
While we do not have a definitive timeline for when the first of the 23 properties may be purchased, please keep in mind that the City is still in the “pre-award” phase of the grant process with FEMA. Once the City is formally awarded the grant, which could happen in at least several months from now, the $42 million will come in installments, likely on a quarterly basis, which is FEMA’s standard practice. The City will receive these payments as reimbursements only after the transactions are completed in batches. We anticipate being able to purchase approximately three properties at a time, which may take a few years to complete.
The Voluntary Property Buyout Program is funded by FEMA’s Hazard Mitigation Grant Program (HMGP). This is different from FEMA’s Building Resilient Infrastructure and Communities (BRIC) program, which was recently ended by the federal government and may result in the City losing funding for a separate grant for landslide remediation work. At this time, City staff has not been notified of any changes to the status of the HMGP. The City plans to apply in the near future for additional HMGP funding in order to potentially offer more rounds of the buyout program.
If you have questions, please email the City at landmovement@rpvca.gov.
The City of Rancho Palos Verdes is requesting proposals from qualified consulting firms to perform project and grant management services for the Greater Portuguese Bend Landslide Voluntary Property Buyout Program. RFP responses are due by May 23, 2025 at 4 p.m. All correspondence and questions regarding this RFP should be submitted via email no later than 5 p.m. on May 12, 2025 to Senior Administrative Analyst Lisa Garrett at LisaG@rpvca.gov.
Earlier this week, City staff met with the California Governor’s Office of Emergency Services (Cal OES) regarding the Federal Emergency Management Agency’s (FEMA) $42 million Voluntary Property Buyout Program. Cal OES has requested additional information for FEMA’s review of program applications, which the City will provide expeditiously. The City now anticipates being able to offer buyouts for 23 properties. Of these buyouts, 15 are expected for red-tagged properties, and eight for yellow-tagged properties. Staff is determining which eight of the 37 yellow-tagged properties seeking buyouts will be prioritized for this round of program funding.
Over the past few weeks, the City has heard from many Voluntary Property Buyout Program applicants asking if the program is still active considering recent wildfires and the Trump Administration's since-rescinded memo ordering a temporary freeze on federal grant funding. The City works closely with the California Governor’s Office of Emergency Services (Cal OES) to administer this Federal Emergency Management Agency (FEMA) Hazard Mitigation Grant Program (HMGP) grant. According to the City’s Cal OES representative, the President’s order leaves uncertainty for the release of future funds issued through the HMGP, despite the “stay” issued by the courts until February 3. However, Cal OES and FEMA continue to review the applications, albeit at a slower rate due to staff being deployed to Southern California to assist with wildfire recovery. The City Attorney is closely monitoring this issue and how it may impact the buyout program and other pending federal grants. City staff is continuing its review of responses to a Request for Proposals (RPF) for professional services related to the buyout program — appraisal, title, escrow, and survey services — and aims to award contracts in March.
The City has also received questions from applicants regarding the buyout program’s tax implications. According to FEMA, hazard mitigation assistance that benefits property owners by mitigating their structures is not subject to federal income taxation. FEMA hazard mitigation assistance used to acquire a property will be treated as an involuntary conversion for tax purposes. For more information, property owners should consult the Internal Revenue Service office or a tax advisor.
By the November 8, 2024 deadline, the City received 85 applications for the Voluntary Property Buyout Program and conducted 78 voluntary inspections.
The applications came from the following neighborhoods:
- 52 (61%) in PBCA
- 21 (25%) in Seaview
- 12 (14%) in Beach Club
Of the 85 applications, 20 properties were red-tagged and 37 were yellow-tagged. Prior to the October 28, 2024 program announcement, only two homes had been red-tagged and four homes had been yellow-tagged.
The red- and yellow-tagged properties are located in the following neighborhoods:
20 Red-Tagged Properties
- 14 (70%) in PBCA
- 6 (30%) in Seaview
- 0 in Beach Club
37 Yellow-Tagged Properties
- 22 (59%) in PBCA
- 7 (19%) in Seaview
- 8 (22%) in Beach Club
The remaining 28 applicants either did not request an inspection, or their property was inspected and deemed to be in good condition.
36 Properties Make Priority List
The City anticipates being able to offer buyouts for an estimated 20 homes during this round of program funding. In collaboration with CalOES and FEMA, City staff established prioritization criteria to narrow the list of applications for cost-benefit analysis eligibility and environmental/historic preservation purposes, as outlined in the program guidelines. Staff placed the applications for 16-red tagged properties and 20 yellow-tagged properties on a priority list provided to FEMA. These properties are located in the following neighborhoods:
16 Red-Tagged Properties on Priority List
- 11 (69%) in PBCA
- 5 (31%) in Seaview
20 Yellow-Tagged Properties on Priority List
- 10 (50%) in PBCA
- 7 (35%) in Seaview
- 3 (15%) in Beach Club
On December 16, 2024, the City mailed letters (PDF) to all program applicants informing them of whether or not their application made the priority list provided to FEMA.
Please note that the yellow-tagged properties are prioritized based on alignment with the path of fissures, sewers and drainage, or whether they are in imminent danger of being red-tagged. Some red-tagged properties were excluded due to different eligibility criteria. For example, one red-tagged home was deemed ineligible due to being bank-owned. Three other red-tagged properties were deemed ineligible, as they were part of past litigation challenging the City’s building moratorium in the landslide area. The lawsuit prevailed, and owners at the time signed hold harmless agreements with the City, allowing for their properties to be developed with homes.
Although the priority list was provided to Cal OES and FEMA, the agencies also received all of the applications that were received for properties within the City limits by the November 8 deadline. There will be further review of these prioritized properties to determine their eligibility. For example, if during review of the applications it is determined that a property was last sold after the December 1, 2022 date, that property would be determined ineligible.
Next Steps
Many applicants are eager to know when properties will be selected to proceed with escrow. While the City does not have a definitive timeline, we anticipate the review and selection process will take at least several months. Please know City staff is working as quickly as possible to determine whether the properties meet FEMA's eligibility requirements and pass cost-effectiveness, environmental and historic preservation reviews. Each application must be carefully vetted for compliance with program rules and regulations.
While FEMA is conducting its review, the City has issued Requests for Proposals (RFPs) for various services needed for the program, including appraisal, title, escrow, and survey services.
The RFPs are available on the City website. The Community Development Department will accept responses through Monday, January 20, 2025 at 4 p.m. If you have questions, please contact Senior Administrative Analyst Lisa Garrett at 310-544-5236 or via email at LisaG@rpvca.gov.
Please note that Rancho Palos Verdes City Hall will be closed for winter holiday break from December 23, 2024-January 1, 2025.
Cost Share Formula
The City has received questions from applicants seeking clarification on the cost share formula for the buyout program, which includes 75% of eligible costs being covered by FEMA and 25% covered by the property owner via a reduction in sales price.
If a property owner voluntary chooses to participate in the program, FEMA’s grant funding will pay 75% of the total fair market value as established on December 1, 2022. The total fair market value will include the following:
- Property value as established by licensed real-estate appraiser
- Appraisals costs
- Title search costs
- Lot survey costs, if necessary
- Real estate transaction fees
- Closing costs
- Demolition costs
- Environmental/hazardous waste remediation (lead-based paint, asbestos, etc.) costs
- Site restoration (grading, seeding) costs
The remaining cost share of 25% for these costs will be borne by the seller (property owner) except for certain in-kind costs borne by the City estimated at approximately $330,000 or less than 1% of the total grant program. The contribution of these costs will be done as a reduction in the final payment at closing to the property owner.
A hypothetical example illustrating the cost share formula is broken down below:
On October 28, 2024, the City of Rancho Palos Verdes, the Federal Emergency Management Agency (FEMA), and the California Governor’s Office of Emergency Services (Cal OES) announced a $42 million voluntary buyout program for property owners in the Greater Portuguese Bend landslide area whose homes have been damaged or threatened by land movement. Established with funding from FEMA’s Hazard Mitigation Grant Program, the Voluntary Property Buyout Program is intended to help eligible homeowners relocate to safer areas by offering a fair market value for their properties based on pre-disaster appraisals. Properties acquired by the City through this program will be permanently converted to open space and deed-restricted, protecting the community from future redevelopment risks in these vulnerable areas.
An overview of the program guidelines and application process are detailed below. A PDF version is also available.
The deadline for property owners interested in applying for the buyout program to request a voluntary property inspection from the City was 5:30 p.m. on Monday, November 4. The application deadline closed at 4:30 p.m. on Friday, November 8, 2024.
Introduction
Many cities across California and the country have utilized buyout assistance programs for their residents to rebuild their lives and create new memories in safer places.
This Voluntary Property Buyout Program (Program) has been developed by the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (Cal OES) in partnership with the City of Rancho Palos Verdes (City) to enable property owners caused by the Greater Portuguese Bend Landslide Complex (Landslide) to relocate from the risk of imminent failure of land movement. Funding for this Program comes from FEMA through its Hazard Mitigation Grant Program (HMGP).
HMGP
Generally speaking, FEMA’s HMGP is funded whenever a federal disaster is declared by the President. Funding that becomes available through the HMGP can be applied to any city in a state for which a federal disaster is declared and is not limited to the affected City.
FEMA is funding this Program in the amount of $42 million to the City based on the Federally declared California disaster for the winter storms that occurred between January 31 and February 9, 2024. Additional future Program cycles may become available to affected residents depending on whether a federal declared disaster occurs in California. In other words, this Program may not be considered a one-time opportunity and may be available in the future.
How the Voluntary Property Buyout Program Works
This property acquisition program is just one of many programs being offered through FEMA’s HMGP. In a Buyout Program, also known as an “acquisition” program, the city will work with residents, who are participating voluntarily and own an improved property with permitted residential structure(s) that has been damaged or is at imminent risk to be damaged by a natural hazard event. Through the Program, the City is able to buy property from affected individuals based on an appraisal of the fair market value at a predetermined date, acquire title, demolish the structure(s), and revert it to open space. By law, upon closing, the property would be owned by the City and must forever remain open space land. At closing, the property will be deed restricted as open space in perpetuity and cannot be redeveloped, except for limited allowable conservation/open space uses that are approved by FEMA Region 9. The City cannot sell it to private individuals or develop it in perpetuity.
FEMA does not buy houses directly from the property owners. This Program is a typical real estate transaction between a seller and buyer, with the City being the buyer. The Program is funded by FEMA who will pay 75% of all eligible expenses. For this Program, the remaining cost share of 25% must be borne by the seller (property owner) except for certain in-kind costs borne by the City.
The Program is administered by Cal OES and directly overseen by the City. Homeowners do not apply directly to FEMA or Cal OES for a buyout, as they are not considered disaster assistance, but rather a grant under the HMGP. Mitigation grants are complementary programs to the disaster assistance programs and have their own rules and regulations.
Based on applications received from each interested property owner, the City will identify properties where buyouts make the most sense based on, but not limited to, the scope of existing structural damage as determined by the City’s Building Official through a property inspection, open space value, community needs, and FEMA program requirements.
Program Steps
- Application Process
Property owners of interest with structures that are destroyed, damaged, or imminently at-risk must voluntarily fill out an application (attached) and submit it to the City no later than close of business (4:30 PM Pacific Time) November 8, 2024 to be considered eligible within this first round of the Program offering.
- Application Screening
The City and Cal OES will review all property applications received by the November 8, 2024 deadline to ensure that each property meets FEMA’s eligibility requirements and will pass cost-effectiveness, environmental and historic preservation reviews, as summarized below:
- Cost Effectiveness - Cost-effectiveness is determined by FEMA’s Benefit Cost Analysis (BCA) methodology and determined via FEMA’s software toolkit. This is the hardest hurdle for most program applications to clear. Many sound proposals across the state do not meet this component and will then be removed from initial consideration.
- Environmental and Historic Preservation - The environmental and historic preservation (EHP) review process is intended to ensure all program applications align with and meet all the provisions of the National Environmental Preservation Act (NEPA), California Environmental Quality Act (CEQA), and program-specific reviews. This compliance assessment process can take several months to complete and the city to receive FEMA approval.
Both of the BCA and EHP review processes may take many applications out of initial consideration. These strict reviews limit the properties that can be considered in the Program.
- Prioritization Criteria for Selecting Properties
The City along with Cal OES and FEMA must ensure that each application follows program rules/regulations and comply with BCA and EHP laws and guidance. Properties deemed eligible by FEMA for the Program will then proceed to the selection process.
Minimum eligibility includes:
- The property is not bank owned (mortgages do not constitute bank ownership for purposes of this Program). This Program does not apply to properties currently owned in title by a bank or other institutional financial institution through a foreclosure or other similar means;
- The property has not sold since December 1, 2022 (based upon Los Angeles County Tax and/or parcel records;
- The property must be improved with a legally permitted structure(s) based on records on file with the City’s Building and Safety Division; and,
- Applicants must be the legal owners of the improved structures according to the Assessor’s records and building permit records on file at the City’s Building and Safety Division.
A property will be selected by the City to proceed with escrow based on the following prioritization order:
- Properties with a structure that has been red-tagged by the City’s Building Official;
- Properties with a structure that has been yellow-tagged by the City’s Building Official;
- Properties with structures that are in imminent jeopardy of becoming red- or yellow-tagged due to their close proximity to land movement elements (i.e. fissures, grabens, sinkholes, etc.);
- Properties that have been de-energized indefinitely;
- Properties that may benefit the City’s Landslide stabilization and winterization efforts as determined by the City’s Public Works Director; and,
- Properties that contribute to the overall value of the adjacent Palos Verdes Nature Preserve as determined by the City’s Recreation and Parks Director.
Property owners that are interested in the provisions of this program are encouraged to request a voluntary inspection by the City’s Building Official no later than 5:30 p.m. on Monday, November 4, 2024.
- Property Owner Notification
The City will notify, in writing, property owners that they have been selecting to proceed with escrow.
5. Property Appraisals
The sale price offered to a resident is determined by an appraisal conducted by a licensed property appraiser. For most residents, you will be offered pre-incident fair market value based on December 1, 2022, before land movement accelerated due to the heavy precipitation associated with the atmospheric river storms.
A licensed appraiser hired by the City conducts these appraisals. Cal OES will hire a certified appraiser to review the methodologies used to calculate the value and prepare the appraisal report. If a resident would like to appeal this offer, they may hire their own licensed appraiser, out of pocket, to conduct an independent appraisal. This second appraisal will also be reviewed by the Cal OES review appraiser.
If there are mortgages or liens held against the property, the fair market value paid to the property owner will be decreased by this amount. In other words, all mortgage obligations or property liens will be retired first.
- FEMA Project Approval
FEMA will notify Cal OES once all the submitted properties are deemed fully eligible and receive official approval. Once FEMA awards the grant funds for the buyout, Cal OES will work with the City on next steps. No construction or demolition activities may take place before FEMA approves the grant (excluding the City’s Landslide stabilization and winterization activities).
- Release of Liability and Indemnification Agreement
Any property owner who accepts a buyout offer shall be required to sign a liability release and hold harmless/indemnification agreement. As a condition of acceptance, property owners must withdraw any claims for personal injury or property damage against the City in connection with the Landslide and in connection with all of the City’s activities and efforts related to the Landslide, and dismiss any lawsuit against the City on the basis of same. A property owner must also release the City from liability from any and all past or future claims or other actions in law or equity for any personal injury or property damage based on any of the City’s actions in connection with the Landslide, in perpetuity.
8. Closing
Once a homeowner accepts a buyout offer, the average closing takes about 45 days. The City will conduct the purchase and title transfer.
- Property Transition
Upon closing escrow, all property structures and improvements will be required to be demolished and the lot cleared for open space. Each parcel may be required to be regraded and restored so that it does not create a safety issue to the public.
Eligible Costs
If a property owner voluntary chooses to participate in this Program, FEMA’s grant funding will pay 75% of the total fair market value as established on December 1, 2022, the total fair market value will include the following:
- Property value as established by licensed real-estate appraiser
- Appraisals costs
- Title search costs
- Lot survey costs, if necessary
- Real estate transaction fees
- Closing costs
- Demolition costs
- Environmental/hazardous waste remediation (lead-based paint, asbestos, etc.) costs
- Site restoration (grading, seeding) costs
Like any other real estate sale, property owners will be responsible for the moving costs and other costs associated with renting or buying new property. Since property acquisition relies on voluntary participation, the government does not pay any relocation costs. However, there are exceptions for any tenant who is displaced by an owner's decision to sell.
Voluntary Participation
This Program is strictly voluntary. Homeowners are not being forced to relinquish their property and the City will not use eminent domain to acquire a property.
Voluntary Withdrawal
Property owners who have been selected to proceed with the purchase of their property may withdrawal at any time prior to closing. Once closing occurs, the real estate transaction is complete and final.
Landslide Stabilization and Winterization
This Program is not intended to replace or suspend City efforts to stabilize the Landslide and implement winterization measures and activities. With or without participation in this Program, the City is committed to continuing with its stabilization and winterization activities and efforts.
Timeline and Expectations
Despite efforts to compensate you fairly, property acquisition may not make you "whole" again, but it is often the best option for people who do not want to accept a certain level of risk in their day-to-day life and are at imminent risk of losing their home.
Moreover, the process can be lengthy. Applying for funds, waiting for FEMA approval, transferring funds, conducting appraisals and closings, etc., take time. Even the easiest real estate transactions take months to complete under ideal circumstances. Adding Federal and State government processes may slow down the transaction; however, the amount of funding offered through this option is typically the highest property values available for residents living in hazard prone areas.
Duplication of Benefits
Because federal funds are used to acquire property, FEMA cannot duplicate the benefits paid by one program with benefits from another source. This means that FEMA will require the City to subtract from the purchase price the amount of other assistance the individual property owner might receive for the same purpose. This assistance includes grants that are available to individuals or insurance payouts. The $10,000 assistance payment through the Social Program provided by Supervisor Hahn to eligible residents in the area does NOT count as a federal duplication of benefit.
If the property owner received any insurance payouts to repair their home, they must show they used that funding to make the repairs before the closing, or else the fair market value will be lowered by this amount. In other words, if your structure was damaged, you cannot receive an insurance payout to repair the structure and a full pre-event fair market value at closing.
Non-Federal Cost Share (aka the “Match Contribution)
FEMA only provides 75% of the funding in the HMGP. To meet cost-sharing requirements for this FEMA grant program, property owners will contribute approximately the remaining 25% contribution for their property through an additional reduction of their fair market value payment. An amount will be reduced from the payment at closing and held in escrow to cover the balance of the remaining activities (e.g. demolition and site restoration). The property owner will receive any additional balance upon completion of site restoration during closeout.
Who to Contact with Questions
Inquiries on the Program should be emailed to landmovement@rpvca.gov.
Conclusion
This page is intended to ensure affected property owners get all the information they need about the Buyout Program so they can make an informed decision.