The program, if approved by federal regulators, would be the most ambitious ever taken in reshaping how coastal land is used, The New York Times reported Sunday.
The amount paid for homeowners to relocate would depend on their location and the amount of damage suffered from Sandy.
Homeowners in flood plains that were significantly damaged would be offered the pre-storm value for their homes, those in more vulnerable areas would be offered a bonus to sell and a small number of homes in highly flood-prone areas would offered double the bonus if an entire neighborhood agreed to sell.
The land could never be built on again. Local leaders could decide how the land could be used as long as no construction was involved.
Sandy substantially damaged about 10,000 homes in the 100-year flood plain.
Public reaction to the proposal has been mixed. On the eastern shore of Staten Island, 133 of 165 households in one neighborhood have signed up to take buyouts if one is offered, said Joseph Tirone Jr., leader of the Oakwood Beach Buyout Committee.
Waterside residents of the Rockaways, however, say they are not going anywhere.
State Sen. Joseph P. Addabbo Jr. said of the 300,000 people in his district, which includes the Rockaways, only about three had asked for information about selling their homes.