SpaceX Offers Buyouts To Boca Chica Homeowners

The letters, which give homeowners two weeks to decide, are believed to be near, or below market value.

By Kristen CabreraSeptember 20, 2019 4:11 pm

Residents of the small, unincorporated community Boca Chica Village at the southern tip of Texas recently received offers to purchase their homes from SpaceX, the space exploration company that operates a rocket development, and launch facility there.

Dave Mosher, senior correspondent for Business Insider, has read the offer letters from SpaceX. He says the company is trying to purchase properties village that’s adjacent to the experimental rocket development facility and space port that now surrounds the community.

In his talks with villagers, Mosher says residents’ thoughts about the space port are conflicted. While some villagers are excited to see the future of space exploration take place in their front yards, some worry about the potential dangers of living near an industrial rocket development site.

“Many of them just go toggle back and forth between very scared about what might happen and very excited,” Mosher says.

The offers, which include a two-week deadline, are based on rock-bottom appraisals of the homes’ value, says Mosher. The independent appraiser SpaceX sent to calculate the value of the homes in Boca Chica often works for authorities seeking to declare eminent domain, when seeking final offer prices before claiming homes. 

While SpaceX is offering to give the residents of Boca Chica triple the value the appraiser determined, as a show of good faith, SpaceX has a history of buying out property in the area for prices below market value, Mosher says.

“I’ve had a couple of people tell me they got a little scared when those offers came in when the space port was approved and they said ‘You know what, I think I better take this because I don’t know if I’m going to get anything else,’ and so they took these offers at a loss,” Mosher said. 

When homeowners take low offers to sell their property, the result is reduced appraised value for homes in the surrounding area, Mosher says. When SpaceX triples its offer over the low appraised value to appear generous, the new amounts bring the offer near the home’s market value.

“It’s not deceitful or anything, but it is interesting and notable that that is part of the calculation here,” Mosher says.

Mosher says SpaceX seems surprised by the amount of attention the villagers are receiving. But Mosher says some of the villagers feel as though they’re being bullied out of their retirement homes in paradise.

“That’s a threat to them,” Mosher said. “They feel threatened by that, and that’s why of all the villagers I’ve spoken to, it seems like more than half of the folks down there appear not to be taking this offer. They seem to be telling me, at least at this point, that they’re not going to do it.”


Written by Savana Dunning.