1/11/24: The Fight Over Sea Walls

Defining the future of real estate

Propmodo Daily

By Franco Faraudo · Jan. 11, 2024

Greetings!

As more and more severe storms cause damage to coastlines, owners are looking for ways to stop (or at least slow) the rising sea from destroying their buildings. But doing so just got harder, at least in California. A lawsuit between homeowners and the powerful California Coastal Commission might shape the precedent for what owners are allowed to do when it comes to protecting their property.

Also, don’t forget to check out today’s featured article about Bank OZK. Over the last ten years, the regional Bank OZK has turned heads for its ability to lend on some of the country’s largest commercial construction projects. We checked back in with the bank to see how they are faring in this adverse, high interest rate environment.

Now let's dig in!

The Fight Over Sea Walls

California was just hit by the perfect storm of large waves and high “king” tides that damaged many coastal areas. One of the areas that was threatened by this extreme weather event was a small complex of ten homes called Casa Mira, about two miles north of the sleepy town of Half Moon Bay. It wasn’t the first time that the houses, built on a bluff above the ocean, had been hit. Back in 2016, Casa Mira owners banded together and filed for an emergency permit from the California Coastal Commission to put down protective boulders or riprap (great name, I know) to keep waves from damaging the cliff and endangering their homes.

But when the Commission was finally able to hear their plea in 2019, they were denied. The reason cited by the surprise decision was that it would “set a terrible precedent.” Building these types of sea walls can be detrimental to neighboring beaches. “Sea walls eat away at the beach,” said the commission’s chairwoman, Dayna Bochco. “So someday as this keeps moving in and in, you are going to lose that beach if you have that sea wall. I think it’s anti-access.” The Commission even went as far as ordering Casa Mira owners to remove the riprap they had already put in.

The homeowners went on to sue the Coastal Commission, saying that they violated their mandate to issue permits for protecting existing structures. But the Commission's interpretation was that the “existing structure” clause only applied to buildings built before 1977 when the law took effect. The Casa Mira houses were built in 1984, so they did not qualify.

The homeowners won. The Judge in the case called the Commission’s interpretation an “erroneous and unreasonable” misreading of state law. But the Commission was not ready to concede. They have filed an appeal to the case, one that is being considered by the State’s Supreme Court for its significance. If the Commission loses, then they would have to allow any property owner to build a seawall to protect their property from rising seas. This would cause a boom in seawall construction in California, a state where 14 percent of the entire coastline is already protected by some sort of sea wall.

But if the Commission wins, it will set a precedent to proceed with their plan for coastal cities: “managed retreat.” Rather than fighting what will likely be a losing battle against the ocean (and depleting California’s popular beaches of sand), the Commission thinks that cities should just abandon properties that are no longer viable to live within higher sea levels.

This lawsuit only affects properties in California but the outcome could be used by other coastal states as a guide for how to avoid costly and damaging sea level remittance infrastructure. It seems pretty obvious that owners should be able to protect their property, but when that comes at the expense of the environment, governments are being forced to choose between saving a few buildings and preserving the coastal ecosystems that provide so much joy and revenue for the state.

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