Imagine a situation in which you have to move and rebuild your home in a new area. That’s something Chad Peterson, Chairman of the Cass County Commission, asked members of the FM Area Diversion Project’s Land Management Committee to consider.
“How many of us could rebuild our house for our assessed value right now? There is no way most of us sitting here could rebuild our house for the current assessed value,” said Peterson.
Yet that’s the challenge faced by homeowners in Oxbow, ND. Their homes are in the process of being relocated and rebuilt in the protected area of a new ring levee. The levee will protect Oxbow, as well as the communities of Hickson and Bakke (OHB), from water that would be stored upstream of Fargo-Moorhead by the FM Area Diversion Project, and is being built as mitigation due to the Project’s impacts. However, the relocation and rebuilding work has had to stop for the time being following a federal judge’s order to halt work on the ring levee until the Minnesota Department of Natural Resources (DNR) is finished reviewing the Diversion Project.
The relocations are being forced by the necessity of building the OHB Ring Levee and the Diversion Project. The Flood Diversion Board of Authority has been making sure each homeowner receives the required relocation assistance and replacement housing, as required by the Uniform Act (URA). The URA, passed by Congress in 1970, is a federal law that establishes minimum standards for federally funded programs and projects that require the acquisition of real property (real estate) or displace persons from their homes, businesses, or farms.
In addition, the Diversion Authority needs to abide by agreements with the City of Oxbow, regulations set by North Dakota state law, and other policies.
These laws, rules and policies have created a unique situation in the Oxbow area, and among other things, determine how much assistance is provided to each homeowner.
“That’s where the bigger ticket numbers are coming from,” said Peterson. “The ramifications of that are it costs more to build, no matter where you build.”
“We’re asking people to leave their homes, to move their businesses, for the greater good of the whole community,” said Mark Brodshaug, Cass County Joint Water Resource District (CCJWRD). “Our policy of treating people fairly probably gets us above the minimum that the law would require.”
Fair and Flexible
The OHB Ring Levee Project requires the acquisition and relocation of approximately 40 impacted residential properties in Oxbow. To allow the City of Oxbow to remain in existence as a viable and prospering community, and in recognition of the fact that the City of Oxbow provides a critical tax base for the Kindred School District, one primary goal is to relocate as many of the property owners within the City of Oxbow itself.
The CCJWRD is serving as the property acquisition entity for the Diversion Project, and has stated its intent to be friendly, fair and flexible. Abiding by those sentiments has been important in developing the replacement housing process. Every acquisition and relocation in the Oxbow area will not look exactly the same, but every acquisition and relocation has been and will continue to be dealt with fairly and meet the general provisions of the URA.
Housing of Last Resort
Due to the large percentage of the Oxbow community being relocated, comparable replacement properties are not available, so it was determined that the “Housing of Last Resort” provisions of the URA would be used for Oxbow. The Housing of Last Resort determination was approved by the U.S. Army Corps of Engineers (USACE) on August 25, 2014.
The CCJWRD has established the necessary processes for providing replacement homes for the impacted residential properties. For home owners affected by the OHB Ring Levee who choose to stay and rebuild in Oxbow, the Replacement Housing Agreement process has been established to facilitate this effort.
Replacement Housing Process
Replacement residential lots have been established in Oxbow’s new development, and are available for impacted parties to select and rebuild their replacement home on. The land for this new development was purchased by the Oxbow Job Development Authority with a loan from the Diversion Authority, and has since been developed and platted. The lots have been allocated to the impacted home owners by the City of Oxbow.
The new development also includes lots for residents outside of Oxbow, should they want to relocate into Oxbow as part of other mitigation.
In order to reestablish the homes impacted by the OHB Ring Levee, there are three steps that need to take place in order to purchase and replace the impacted property:
- Purchase Agreement. The impacted property is appraised and an offer of Just Compensation is offered for the impacted property based on the appraised value of the home. The appraisals are conducted following federal “yellow book” requirements, which are more rigorous and specialized than a typical bank appraisal.
- Replacement Housing Agreement (RHA). In recognition that comparable replacement properties to those impacted by the OHB Ring Levee do not exist in Oxbow, CCJWRD and the home owners will follow the ‘Housing of Last Resort’ provision of the URA and build replacement homes in the new Oxbow development. The Program will compensate the home owner for the cost to rebuild their same (or similar) home. Due to the robust housing market in the region, often the cost to rebuild the existing home is expected to be higher than the appraised value of the existing home. The difference between the appraised value and the cost to rebuild the home is compensated for via the RHA.
- Relocation Benefits. Every displaced person in entitled to relocation benefits as outlined in the URA. These benefits generally include moving expenses, closing costs, mortgage expenses, and similar costs. Each of these items is submitted as a reimbursement once the cost is incurred by the displaced person.
The replacement housing process for the Oxbow area is a unique process due to the Housing of Last Resort situation. Keeping the community whole, preserving the tax base for the Kindred School District, and providing replacement homes for those impacted by the OHB Ring Levee Project are critical drivers to the replacement housing process. The unique circumstances each individual property owner faces are being addressed as the Diversion Authority and CCJWRD exercise fairness and flexibility throughout the replacement housing process.