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Feds will use $42 million to buy Palos Verdes homes that are falling apart

The federal government plans to spend $42 million to buy out the homeowners most affected by the ongoing landslides in Rancho Palos Verdes, and turn their properties into safe open space.

This program, which is part of the Federal Emergency Management Agency's disaster relief grants, provides one of the long-term solutions for the residents of the devastated region, which has been going through periods of global warming for decades – although the scale and speed of the movement in recent months has been unprecedented.

Officials say they will have enough money to buy out 20 property owners in the Portuguese Bend area, many of whom are facing increased property damage and permanent shutdowns due to landslides. Applying for a voluntary purchase; no one will be forced to sell their house in the city.

Homeowners can expect to receive an offer equal to 75% of their property's pre-disaster fair market value, before consecutive winters of heavy rain wash away the complex's ancient landslides. With the goal of reducing future disasters and related losses, the city will then demolish the homes and ensure no future development.

“This buyout program provides a viable option for at-risk community members, offering them the opportunity to relocate and rebuild with reasonable compensation,” Rancho Palos Verdes Mayor John Cruikshank said in a statement. He said dozens of residents have endured unimaginable losses from the latest global crisis, “some facing the very real prospect of losing their homes entirely.”

The announcement comes after months of residents asking for state and federal help amid a surge in landslides that have destroyed homes, required constant road repairs and strained utility providers. However, only a small portion of damaged and threatened areas in the area can be purchased. About 200 homes in three areas have been affected by landslides in recent months.

Mike Hong, who designed and built his Portuguese Bend home on the property he bought in 2014, hopes the purchase will be available to him and his wife.

“What they're offering saves a lot of people, and for us too,” said Hong, 65, although he's worried about how much it will cost. “It's bittersweet – it gives us an opportunity to save money for our family, but you see a labor of love being destroyed.”

Hong estimates that his home would have been worth $3.6 million two years ago — perhaps at the higher end of the range for neighboring properties because it's relatively new — but said he'll wait and see what, if any, offers are made.

The announcement of the purchase plan follows some encouraging initial words in months about the landslide. City officials reported this month that the level of land transportation has dropped as much as 80% in some areas compared to last month, mainly due to the new, deep wells that the city is drilling from August to October. The wells released millions of gallons of groundwater that drove the landslides.

Hong said that even if they were not accepted into the purchase process, the slow movement of the earth – which led to his home being one of twenty-two to receive electricity – was good news.

“We can still pull it out, we can take our chances if this doesn't work,” Hong said. “Nevertheless, we will continue to apply.”

However, not everyone is chasing this opportunity. Sallie Reeves and her husband, who have lived in their home since 1982, have decided not to apply.

“We're committed to staying,” said Reeves, 81. “We're financially committed now.”

It has been undergoing extensive renovations for weeks after the rooms in their house were cracked. Like several others in the area, they have placed their home on steel beams and adjustable wooden structures, which they feel confident that they can now withstand any future earth movements.

But Reeves said he understands why some people might not be ready to take on a reasonable offer to leave and start over.

“There are people who feel trapped here,” he said. “I'm happy for those who take advantage.”

The city will prioritize homes for purchase on eight homes marked red or yellow – considered legally unsafe to move in or unlivable, respectively. Next on the priority list will be buildings with the most damage that officials believe may soon require residents to evacuate. Then, another 250 homes that are still without electricity will be checked, according to city officials.

If selected, the city will purchase the property for 75% of what the appraiser determined was the fair market value of the land and improvements on Dec. 1, 2022, minus some of the acquisition and severance costs.

While the buyout program has historically been used for property owners in flood-prone areas, FEMA, the California governor's Office of Emergency Services and the city worked together to customize it for this landslide, said Ara Mihranian, Rancho Palos Verdes city manager.

Buildings acquired by the city must be converted into open space. The city will be in charge of demolishing any buildings or improvements, including access roads to the property.

“Everything that needs to be removed, redone, and open space will be banned forever,” Mihranian said.

Interested property owners should request a site inspection from the city by November 4.

FEMA and Cal OES will check whether prospective buyers meet all eligibility criteria, which includes a tricky point for many in this landslide area: The buildings must still be in a legally permitted zone. As hundreds of meters of movement in recent years moved houses from their original sites, it was not immediately clear how many homes would no longer be suitable.

Another point that has offended some residents is that once the purchase is approved, the property owner will have to release the city and all other responsible parties. That's a problem for many who have sued or are planning to sue for earth-moving related losses.


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