After Hurricane Marie: Who Carries the Risk of Living at the Water’s Edge?

A September swell forced evacuations on the Long Beach Peninsula and closed roads in Malibu, and each emergency response quietly answers a question about who pays

Coastal Risk After the September Swell

In September a hurricane far out in the Pacific sent large surf onto the Southern California coast at the same time as unusually high tides. The result was a week of damage reports from Malibu to Orange County.

The events themselves are now well documented. The more lasting question is the one each such episode raises and nobody much likes to answer. When a person chooses to live at the edge of the ocean and the ocean arrives, whose problem is it?

What Happened

A travel news site’s summary sets out the damage. It reports that pounding surf compromised the seawall on the Long Beach Peninsula, and that the fire department oversaw the evacuation of about 20 homes as flooding damaged streets and properties. Sand, it says, disappeared overnight along parts of the peninsula.

In Malibu, severe erosion left drop-offs of about eight feet along the bluffs at Point Dume, and officials closed road access. Zuma and Westward beaches saw closures. A sinkhole opened on one Malibu property. Further south, Aliso Beach in Laguna lost significant sand.

The same account makes a point that matters for what comes next. Erosion compounds. A beach narrowed by one storm absorbs less of the following one, so each event does more damage than the last.

And What May Follow

A separate explainer on the September waves suggests the episode may be a preview. It reports that forecasters consider El Nino to be strengthening, with a high probability of a very strong event this winter. El Nino winters on this coast have historically brought larger surf, higher water levels and heavier erosion.

The same piece observes that development has placed houses, roads and infrastructure very close to the ocean. That is the heart of it. The sea has always done this. What has changed is how much is standing in the way.

Three Ways to Carry Risk

There are, broadly, three places the cost of coastal damage can fall.

On the owner. The person who chose the location bears the loss, either directly or through insurance bought at a price that reflects the danger.

On the neighbours. A private wall or emergency rock shifts the damage to adjoining beach and property.

On the general public. Taxpayers fund the emergency response, the repair of roads and utilities, subsidised insurance, disaster grants and the rebuilding.

Most real events involve all three. The mix is a matter of policy, whether or not anyone admits to having chosen it.

The Moral Hazard Argument

The classical liberal objection to public rescue is well known. If people are protected from the consequences of a risky choice, more of them make it.

Applied to the coast: if the public pays for emergency protection, repairs the road to the door and helps rebuild after each storm, then building at the water’s edge is cheaper than it ought to be. The true cost is hidden from the buyer. So more is built, in more exposed places, and the next bill is larger.

On this reasoning the most useful thing government could do is stop subsidising the risk. Let insurance be priced by the market. Decline to rebuild public infrastructure whose only purpose is to serve properties that cannot be defended. Make clear in advance that there will be no bailout.

Buyers would then pay less for exposed property, or not buy it, and the problem would shrink without anyone being ordered to move.

Why It Is Not So Simple

That argument has force, and it has limits.

Many of the people affected did not make a reckless bet. They bought decades ago, under rules that permitted it, when the beach was wide. Some are retired and their home is most of what they own. To tell them the market will sort it out is to tell them they are ruined.

Nor is the housing all luxury. The Long Beach Peninsula is a dense neighbourhood. Coastal California includes mobile home parks, older apartment blocks and working harbours as well as villas.

Then there is public infrastructure that serves everyone. The Pacific Coast Highway is not a private driveway. When it is undermined, the loss falls on commuters, on businesses and on emergency services for an entire region.

And an evacuation is not a subsidy. No serious person argues that the fire department should leave twenty households in a flood to teach a lesson about incentives.

Managed Retreat

The alternative most often proposed by planners is to move back from the shore deliberately: buy out the most exposed properties, relocate roads and let the beach migrate.

From a property-rights standpoint, everything depends on how. Retreat by purchase, at a fair price from willing sellers, is a transaction. Retreat by regulation, in which an owner is forbidden to repair or protect a home and receives nothing, is a taking in all but name.

Voluntary buy-outs are costly. But they are honest. They put the price of the public’s preference on the public’s account, where it can be seen and debated.

A Consistent Line

A position that respects both private property and the taxpayer might hold the following.

Emergency rescue is a core function of government and is not in question.

Existing owners who relied on past rules deserve a fair transition, not sudden abandonment.

But the subsidy for new risk should end. Anyone building or buying on an eroding shore from now on should do so on the clear understanding that the cost is theirs: insurance at a true price, no expectation of public armouring, no claim for rescue of the asset as opposed to the person.

And when the public wants land back for a beach, it should buy it.

The Surfer’s Interest

Those who use the water are sometimes cast as indifferent to homeowners. They should not be. An emergency wall of dumped rock is bad for the surf and bad for the beach. A coast where every storm produces another improvised defence is one that slowly hardens from end to end.

Honest pricing of risk, and honest purchase where the public wants the shore, would do more for the waves than any amount of indignation.

This article reports damage as described in published accounts and sets out competing arguments without endorsing an outcome. For relief, The London Prat treats the subject in its British satirical news on houses falling into the sea and its London satirical news about flood insurance. Bohiney Magazine reports from the American side.

SOURCE: https://bohiney.com/