With the recent widespread reports of sea-level rise triggered by global warming, the California Coastal Commission — a state agency which regulates coastal development — plans to release a proposal in early-2019 which provides guidelines to local jurisdictions on how to combat the potential impacts. The stakes are enormous, as the Commission believes many homes along California’s 1,100 miles of coastline will inevitably be wiped out by a rising ocean. According to an article by Anne Mulkern in E&E News, Calif. prepares policy for coastal ‘retreat’, the suggested approach in a draft version of the Coastal Commission’s proposal involves “managed retreat” — i.e., buying or condemning threatened homes and relocating them or tearing them down, which would thereafter free the coastline and preserve the beaches. The Commission argues against relying on sea walls for fear that they would make sandy beaches disappear under rising ocean water. Needless to say, the proposal is extremely controversial.

What are the Potential Impacts of Sea-Level Rise?

According to various studies prepared, sea-level rise impacts will be astronomical over the next 80 years. While a rise in sea-level of 2.5-6.5 feet may not seem dramatic, in addition to impacts to many residences and businesses, dozens of wastewater treatment plants and power plants, 250 miles of highway, 1,500 miles of roads, and 110 miles of railways could be at risk. A recent article by my colleague, John Erskine, appears in the latest issue of California Special Districts magazine, and addresses the potential widespread impacts to California’s coastline.

How Would “Retreat” Be Accomplished, and What are the Alternatives?

While the Coastal Commission itself would not be buying or condemning the homes (it tasks the local cities and counties with that directive), the proposal itself is hugely detrimental, as the Commission has oversight over municipalities as they write land-use rules and can in many cases control permitting related to construction or development in coastal zones. The Commission is proposing to condition development permits in the coastal zone on ensuring modification or removal of structures where necessary to maintain minimum beach width, and including such language in recorded deeds so all future purchasers are on notice. It is further suggesting that jurisdictions fund “retreat” by buying the homes and then renting them out until they’re damaged. Nossaman has assisted many property owners and local agencies recently with Coastal Commission approvals of new developments or modifications, and based on that experience, it is clear that the Commission is attempting to condition coastal development permits on waiving shoreline protection devices (such as seawalls), and is otherwise attempting to require setback conditions that reduce the size of development.

Some cities have opposed the “retreat” approach, and have instead pursued a sea-wall approach or beach replenishment programs. For now, push-back by beach homeowners has at least delayed hearings on the Commission’s proposal, but many complex questions remain, including impacts to property values, how to manage and fund “retreat”, the loss of substantial property taxes, and the use of eminent domain for such a controversial issue.

Other states have addressed somewhat similar problems, including the acquisition of flood-prone homes in New Jersey and Houston, but California appears to be the first state in the country to be considering retreat so broadly. And while it may seem like sea-level rise impacts are many years away, we are already seeing the ramifications. In Sonoma, 11 homes have been torn down or collapsed into the sea as oceanfront cliffs have fallen away, and similar erosion conditions in Pacifica have resulted in multiple homes or apartments being acquired by eminent domain and then demolished. Even Caltrans is shifting Pacific Coast Highway in certain locations.

Is “Retreat” Legal, and What are the Potential Takings and Valuation Issues?

Property rights advocates argue the Coastal Commission does not have authority to condition development permits on retreat management, while the Commission contends it does under the Coastal Act, which mandates preservation of beach access. The Commission further purports that its proposal is simply “guidance.” But its real-world effect is much more significant, particularly as we have recently seen the Commission place significant restrictions on development involving the waiver of shoreline protection. Impacted property owners are encouraged to consult with coastal law experts before agreeing to any special permit condition approvals.

Moreover, the guidance itself will potentially massively impact property values and could potentially effect a regulatory taking of various properties. Traditionally, a regulatory taking involves the examination of three factors: (1) the economic impact of the regulation on the claimant; (2) the extent to which the regulation has interfered with the claimant’s reasonable, distinct investment-backed expectations; and (3) the character of the government action. If the Commission’s proposal moves forward, it is likely beachfront owners will at least attempt to challenge the proposal under this regulatory takings framework (i.e., a “facial challenge”), and we are certainly likely to see owners challenge strict standards or permit conditions placed on new development applications as unconstitutional (i.e., an “as-applied challenge”).

If local jurisdictions ultimately move forward with acquiring beachfront properties, either voluntarily or under threat of eminent domain, there will surely be large valuation disputes and legal issues on how, if at all, the Commission’s guidance and its impact on property values should be considered in determining just compensation. Impacted owners may seek to recover precondemnation damages (i.e., diminution in value due to the unreasonable actions or delays of the government), and will claim that any decrease in value due to the Commission’s guidance or the jurisdiction’s proposed acquisition or retreat program must be ignored. (See Code Civ. Proc., sec. 1263.330.)

We will continue to track the Coastal Commission’s proposal and report on any updates.