BAY ST. LOUIS, Miss. — The federal government is considering buying out as many as 17,000 homes along the Mississippi coast and remaking the land into a vast hurricane protection zone, raising anxieties that it could destroy the waterfront lives many residents are struggling to rebuild after Katrina. The Mississippi Coastal Improvement Program could cost $40 billion, including buying the homes, building levees, and restoring barrier islands. The land could be converted into wetlands or other public uses, such as golf courses or bike trails, but could not be sold for private development.

For Finley Williford, a 42-year-old boat captain, a buyout offer would have been tempting if it had come shortly after Hurricane Katrina destroyed his Bay St. Louis home on August 29, 2005. But instead of leaving, he invested countless hours of labor and more than $400,000 in two new houses for his family and his father.

“If they had showed up a day after the storm, I probably would have taken the money. It’s kinda after-the-fact now,” Mr. Williford said.

The buyouts would be voluntary, and the Army Corps plan envisions allowing casinos, hotels, and restaurants to continue operating on the coast from Bay St. Louis to Biloxi. But until the proposal becomes more focused, residents are concerned that it could spell the end of their Margaritaville-like communities, where a lifestyle of beaches and boiled shrimp has flourished for decades, and many houses are already built atop stilts.

Mr. Williford fears the buyouts could stunt the growth of his nearly deserted neighborhood and harm property values if few other residents return. “Just the rumor of it is slowing people down,” he said, noting a neighbor suspended his rebuilding plan after hearing about the proposal.

Rep. Gene Taylor, a Democrat whose home in Bay St. Louis was leveled by Katrina, said he doesn’t see much support — locally or on Capitol Hill — for funding billions of dollars in home buyouts.

“I can’t think of a single person who has come up to me and said, ‘I want the government to buy my land,'” he said. Some of his constituents welcome that option, though.

Arnold Toups, 90, is living in a government-issued trailer outside the gutted shell of the octagon-shaped home he built with his own hands three decades ago. A “For Sale” sign in his front yard has attracted a few offers, but nothing serious. Mr. Toups said he would listen to an offer from the Corps.

Libby Garcia, one of the few residents to rebuild in Mr. Williford’s neighborhood, wonders why the Corps is singling out the Gulf Coast for buyouts when so many other coastal areas face the same flood risks. “Why don’t they go buy Key West?” she asked.