FEMA Rules Leave Coastal Homeowners Waiting for Collapse
More than 30 homes have collapsed into the Atlantic Ocean in coastal North Carolina since 2020, and residents say federal flood insurance rules leave them no realistic way to save the houses that remain. An NPR investigation published September 17 documents a perverse incentive at the heart of the crisis: the Federal Emergency Management Agency will pay homeowners after a house collapses into the sea, but not before—trapping owners between losing everything and paying tens to hundreds of thousands of dollars to act first.
“The homeowner is incentivized to wait for collapse and get a payout,” John Ryan-Henry, a policy analyst at the Coastal States Organization, told NPR.
The dynamic is intensifying as climate-driven sea-level rise accelerates erosion along U.S. coastlines. While the Outer Banks of North Carolina are the current epicenter, waterfront communities from Maine to California face similar threats.
A Home Stranded Mid-Beach
Richard Foreman’s house in Rodanthe, North Carolina, illustrates the problem. Once a popular vacation rental known as Sea ‘n Delight, the home now sits stranded in the middle of the beach, about 20 feet in the air on stilts, its stairs long since torn away by waves. At high tide, the ocean runs beneath the entire structure.
Four neighboring homes have collapsed in the past two years. According to the National Park Service, which manages the area as part of Cape Hatteras National Seashore, more than 100 homes on North Carolina’s barrier islands are at risk from erosion and sea-level rise within the next decade, and at least half a dozen are in imminent danger. In June, a high tide combined with large waves brought down another house.
Foreman’s home has never been emptied. “It looked like we had just left for dinner. I mean, everything is still in there,” he told NPR—couches, refrigerator, every steak knife and beach towel.
“If they would settle with me for the insurance, I would have it torn down tomorrow,” he said.
The Financial Trap
FEMA provides most residential flood insurance in the United States through the National Flood Insurance Program. The agency’s coverage pays out only after a home collapses, meaning owners who tear down or move a doomed house first bear the cost themselves.
That math is punishing. Tearing down a house costs at least $30,000, according to local contractors, and far more if the home is large or hard to access. Moving a house inland can run into the hundreds of thousands of dollars. Under the flood insurance program, the maximum payout when a house collapses is $250,000 for the building and up to $100,000 for contents.
Many at-risk properties in Dare County are vacation homes whose owners rely on rental income to cover mortgages, taxes and insurance. Once a house becomes uninhabitable, that income disappears—precisely when owners need cash to prevent a collapse. Michael McDaniel, who bought his Buxton, North Carolina, home, the Sea Star, for about $500,000 in 2011, faces that bind: he says he cannot afford to move or demolish the house.
“If it’s teetering, you’ve got to sit and wait for it to fall in the ocean,” he said.
A Cost Beyond the Homeowner
When houses do fall, the consequences spread well beyond the owner. Lisa Sharrard, a longtime flood insurance agent in North Carolina and former chair of the Association of State Floodplain Managers, told NPR that collapses leave a lasting mess.
“Unfortunately, there’s a lot of debris that comes with these collapses,” she said. “It leaves a legacy of hazard on the beach. It’s almost impossible to get everything.”
The National Park Service says it collected more than 480 tons of home debris from the area in the last 18 months alone, some of it washing miles down the coast. Federal and county governments estimate they have spent more than half a million dollars cleaning up debris in coastal North Carolina since 2020—a figure that excludes the economic cost of closed beaches and polluted ecosystems.
Foreman argues the rules make the pollution worse. “Environmentally, it would be far better if they would allow me to tear it down on a beautiful day where all the debris is in one spot,” he said. “But by requiring the waiting game for it to fall, it’s going to fall in a storm, and it’s going to be scattered for miles.”
The Solution Congress Repealed
County officials say the federal government once had a fix—and abandoned it. In the mid-1980s, Congress created the Upton-Jones Amendment to the National Flood Insurance Program, named for lawmakers from Michigan and North Carolina. Taking effect in 1988, it allowed homeowners to access flood insurance payouts before a home fell, to fund demolition or relocation. More than 400 homes in 27 states were demolished or moved under the policy, according to partial claims records FEMA provided to NPR through a public records request.
But lawmakers soured on the program. At congressional hearings, experts testified that some owners were deliberately delaying removal to collect more rent. “They have chosen to repair the building as it stands, get another season’s rent and then look toward the possibility of demolition at a later date,” Spencer Rogers, who managed Upton-Jones claims for North Carolina, said at a June 1990 hearing. “There is no particular incentive that I can see for any early action.”
Congress repealed Upton-Jones in 1994, worried it could bankrupt the flood insurance program if every eligible home used it.
Yet FEMA never conducted a full cost-effectiveness review, leaving its reputation as a costly failure largely unexamined. NPR’s analysis of narrower claims data, adjusted for inflation, found the average cost to demolish a home under Upton-Jones was roughly the same as a federal home buyout—and potentially cheaper in higher-cost areas.
Reform Stalled in Washington
A bipartisan group of lawmakers proposed reviving a version of Upton-Jones in 2025. Under the new bill, homeowners who fail to remove a threatened house before it collapses could lose their full payout, and the process for determining imminent danger would be simplified.
“For some homeowners in vulnerable coastal areas, relocation or demolition may be the safest and most practical option,” Rep. Chellie Pingree, D-Maine, a co-sponsor, told NPR. The bill, she said, “is about giving people that option before disaster strikes, not after everything is already lost.”
But the measure has stalled in the House. FEMA says it cannot change the rules for threatened properties unless Congress amends the laws governing the flood insurance program, and the Trump administration’s efforts to slash the agency’s workforce and budget have made it harder for bipartisan reform to gain traction.
Meanwhile, communities are leaning on expensive stopgaps. Dare County has an $8.6 million jetty repair and a roughly $15 million beach nourishment project underway to pump more than 2 million cubic yards of sand in front of the most threatened homes—though sand from the last such effort lasted less than three years. In Maine, a jetty project is underway near threatened houses in Camp Ellis.
Reide Corbett, a climate scientist at East Carolina University, cautions that such measures only delay the inevitable. “There is no way to maintain homes where they currently are,” he said. “The only solution is to back off that front line.”
Of beach nourishment, he added: “You’re buying sand to buy time. You can’t simply buy time and not plan for what is next.”
What to Watch
The collapse of an unoccupied Buxton home in September 2025—the 12th such collapse on Seashore beaches in five years, per the National Park Service—underscores how routine the losses have become. Until Congress acts on the flood insurance program, homeowners, local governments and taxpayers will keep absorbing the cost. Whether the stalled bipartisan bill can overcome a hostile budget climate—or whether the waiting game simply continues—remains the central question for the thousands of coastal homes standing in the ocean’s path.
NPR also produced a companion video report on why homeowners are leaving entire houses to fall into the sea.