This is Part One of a four-part series called Grand Forks: Cost of Disaster. The next article will be published on Tuesday.
Challenges with flood property buyouts in Grand Forks highlights gaps in B.C.’s current emergency management policies and is a driving force behind proposed changes to legislation, a Global Okanagan investigation has found.
One hundred and 20 properties in the North Ruckle neighbourhood and surrounding areas hit hardest by catastrophic flooding in May 2018 will be bought out by the government to re-establish the natural floodplain and make way for flood protection projects.
In the absence of a provincial buyout scheme, the City of Grand Forks turned to a federal grant program to help fund the initiative, which wasn’t designed for large scale post-disaster residential buyouts.
The federal Disaster Mitigation and Adaptation Fund (DMAF) was created to help communities adapt to intensifying weather events by fortifying public infrastructure.
Infrastructure Canada, which manages the fund, told Global News only the purchasing of private land, not homes or other structures, is eligible under the DMAF program at “fair market value.”
In response, a $50-million commitment from all three levels of government was announced in June as the city and province topped up the fund for the residential buyouts.
An estimated $12 million will go toward property buyouts and the remainder is allocated for floodplain restoration, dikes, and stormwater infrastructure upgrades or replacements, according to the city.
But when flood-affected property owners were informed their homes would be bought out at “post-flood value” in line with the criteria of the DMAF program, they protested in the streets.
According to one city staff report, the average loss per home will be $79,000. The total difference between pre- and post-flood value is estimated at $6.6 million.
“The bottom line is that half of the households would receive less than $100,000 for their property with 24 households receiving less than $60,000 if receiving only current market value,” the report said.
Graham Watt, the city’s flood recovery manager, said the controversy exposes gaps in B.C.’s current emergency mitigation policies and a provincial buyout program should be developed.
“We need hard protection like dikes and floodwalls and stormwater systems, but managed retreat where we support communities in moving outside of the flood plain, outside of high-risk areas,” he told Global News.
“I think the province is highly aware of this with regards to sea-level rise and large flooding potential in the Lower Mainland, and so we definitely need policy development to have a good program to support buyouts as part of a broader flood protection strategy.”
B.C.’s Public Safety Minister Mike Farnworth said a sweeping review of B.C.’s emergency management legislation is underway and the province is taking a hard look at compensation.
“One of the areas we know we are going to need to be looking at, in terms of the emergency program act in the future, for example, is not just the changes that need to be made in how we deal with these kinds of disasters but areas such as compensation: how do we deal with the issues of when you can’t go back to where you were,” Farnworth told Global News.
“Do you look at financial compensation? Do you look at making land available in other areas where there is municipal land or Crown land? Those are the kinds of things I fully expect to be part of the review and the rewrite and the policy work that needs to be done around a new and updated Emergency Program Act.”
The lack of a clear buyout framework in B.C., combined with compensation shortfalls and delays in negotiating agreements, is taking an emotional toll on property owners in the buyout zone.
Linda and Kevin Lennox said they purchased their idyllic riverside property in the North Ruckle neighbourhood of Grand Forks six months before the flood.
They moved to the Boundary community in the hopes of avoiding disaster after their home and fishing lodge on Loon Lake near Cache Creek was threatened by the 2017 Elephant Hill wildfire.
The Lennoxes repaired the flood damage to their basement. They said they would waive their right to future flood financial assistance if they could stay in their home, but that was not an option on the table.
WATCH: In an extended interview, Kevin and Linda Lennox speak about the challenges with the buyout program and how the stress is taking its toll.
The uncertainty of how much money they’ll receive for their house is delaying their retirement plans, and they fear they won’t be able to replace what they have once they’re forced to re-locate.
“It’s devastating, it’s 19 months of not being able to plan for our future,” Linda Lennox said.
“Life’s been pulled out from underneath us. Families fall apart, marriages fall apart, and it’s been a great deal of stress.”
Kevin Lennox said they are fighting for fair and equitable compensation, currently facing a $125,000 loss.
“What we are fighting, for now, are two things. One is the that the city treats us fairly so that we can move from this home and go out and buy a home that is similar size and age and quality and a similar piece of property, similar amenities, and we believe that anybody whose land is being taken from them should expect that and receive that from the city,” he told Global News.
“The second thing is that the city has made us look like flood victims in the media and to our fellow citizens, so they’ve been telling people that they are not our insurance company and it’s not their job to make us whole. What they are not saying is, ‘We are taking their land from them to build city infrastructure to protect the downtown core,’” he said.
Jennifer Houghton’s Johnson Flats home is another one of 120 properties on the buyout list.
She’s organized rallies, protests and petitions demanding fair compensation.
“The disaster wasn’t the problem in my life, it’s the disastrous way that the various levels of government have responded to it that has caused me the problems in my life,” she said.
“I recovered from the floods just fine, but everything that they’ve done since then has made my life so painful and filled with stress, it’s the government response that has been the problem.”
She said being left in limbo for 19 months is taking its toll.
WATCH: In an extended interview, Jennifer Houghton speaks about the emotional and mental toll the buyout uncertainty has caused her.
“What does my future look like? I can’t plan for the future. I’m been left in limbo,” she said.
“I’m not sure exactly what the offer is going to be, I’m not sure when it’s coming, I don’t know how much I should be fixing up my house, and being left in limbo and having an uncertain future has been really troublesome.”
Province defends handling of buyouts
Farnworth defended the government’s handling of the buyouts and would not commit to boosting provincial funding to cover the shortfall.
“We are going by the rules that are in place with the existing program,” he told Global News.
WATCH: In an extended interview, BC’s Minister of Public Safety Mike Farnworth says flood compensation is part of a review of the province’s emergency management legislation.
“The issue of buying out has been done in some provinces and the way in which they have done them. My understanding is they’ve spent the money and then they’ve gone to the federal government for reimbursement.
“The current program that has been accessed by Grand Forks is a federal program and the rules on that program are it’s based on post-flood evaluations,” he added.
As major flooding events become more severe and frequent in B.C., Houghton encouraged Farnworth to address the buyout issue before another disaster strikes in the province.
“This is going to get worse, so the B.C. government has to have a vision,” she said. “They have to have a vision for dealing with climate change, they have to have a vision for our future, they have to have a vision for how rural communities, in particular, are going to deal with this.”
Buyout schemes developed in other provinces
While a buyout scheme is uncharted waters in B.C., other Canadian provinces have already been forced to tackle the issue of removing people from flood plains to prevent future risk.
The province of New Brunswick told Global News a voluntary buyout program is part of its provincial Disaster Financial Assistance program and has been offered for events such as the flooding along the St. John River system in 2018 and 2019.
Buyouts are available in cases where structural damages exceed 80 per cent of the appraised value of the property.
“The purchase price will be fair market value based on a pre-event real estate appraisal or in some cases the property tax assessment,” said a statement from the province.
For those who refuse a buyout, the property will not be eligible for future Disaster Financial Assistance programs.
In Manitoba, the government bought out 65 properties in Breezy Point in 2009 threatened by repeated flood damage and ice jamming through a voluntary provincial program.
“While the 2009 ice jamming and flood was the catalyst for the buyout, the buyout was intended to address the longer-term risk, not just as a response to that event,” the Manitoba government said in a statement to Global News.
Under the floodway relocation program in Alberta, 181 flood-damaged homes located on designated floodways in Southern Alberta were compensated in 2013 at “pre-flood” values for their homes in Calgary, Foothills Region, High River, Mountain View County, Red Deer County, Rocky View County, and Turner Valley, according to the Alberta government.
When asked why Alberta decided to compensate property owners at appraised pre-flood value instead of post-flood value, it said the purpose of the program is to reduce future risk and recovery costs borne by government by clearing the floodway of residential development.
“This is achieved by enabling and incentivizing eligible residents to relocate, and by focusing the program on those with the greatest risk (i.e. floodway) and need (principal residences),” it said.
The lack of a provincial flood buyout program meant the City of Grand Forks was on its own trying to figure out how to buyout an entire residential neighbourhood and other homes in high-risk flood zones.
Watt said while a flurry of activity was going on behind the scenes ironing out the details in the early stages, the flood-affected property owners were left in the dark.
After Global News began investigating, Watt issued a statement publicly apologizing for the first time for missing “key opportunities” to communicate and consult with affected landowners.
“I really want to say I apologize for that, on behalf of the city, it was something that we weren’t prepared for,” he said.
With its small tax base, the City of Grand Forks said it’s unable to absorb the multi-million-dollar shortfall on its own, so it’s offering a land swap. It hopes the negotiated offer combined with land and title elsewhere in town will offer a creative solution for affected property owners.
“The city wants to do everything that they can that is going to benefit the property owners that are in the buyout area,” said city councillor Christine Thompson.
“We want to work with them to find a solution that is going to benefit them.”
The city hired Keystone Appraisals to form the land acquisition team, and negotiations are expected to begin in the coming weeks.
Meanwhile, the province will accept feedback on updating the Emergency Program Act until Jan. 31.
New legislation is expected to be introduced at the fall 2020 legislative session and implemented during the 2021 flood and fire season.