How the Government Subsidizes Unsustainable Development

'The rest of us are assuming all of the risks.'


Over at Yale Environment 360, Rona Kobell (*) writes about efforts to build—and rebuild—on ecologically precarious barrier islands. You should read the whole article, but the passage that's most likely to interest Reason readers is this one:

Historically, residents of barrier islands have not always looked to the government for millions of dollars in salvation efforts when the sea encroached. Often, they simply left. When Hog Island, on the Virginia Coast, eroded to the point where it was uninhabitable in the 1930s, residents barged their houses to the nearby towns of Willis Wharf and Oyster. Similar tales have repeated themselves in Texas and Louisiana, where barrier islands were popular refuges for pirates but often not considered fit for long-term structures.

But in the mid-20th century, planners and developers began to view the nation's barrier islands as resort towns in the making—a steady source of tourism dollars, property tax revenue, and construction jobs. Federal and state governments spent big on bridges, dunes, beach replenishment, and public piers to encourage settlement. Government-backed flood insurance encouraged that process, as did the federal government assuming the role of rebuilder-in-chief, said Rob Young, a geologist who directs the program for the study of developed shorelines at Western Carolina University.

"Why do we rebuild on barrier islands?" asked Young. "Because the people who are doing the rebuilding are making a sound economic decision." The owners may rebuild the home, he said, but "the rest of us are putting back all the infrastructure. We're raising the road. We're putting back the beach. The rest of us are assuming all of the risks."

Development in these areas wouldn't necessarily cease altogether without those subsidies, but it would certainly take a different, lighter path. But when the government's greener elements try to rein in those unsustainable projects, they generally do this not by spending less but by spending more, blocking builders both through regulation and through land acquisition. The result is basically a contest between two interest groups to see which can play the political game more capably. (That said, conservationists have also acquired a lot of this land privately. Kobell notes, for example, that the Houston Audubon Society now owns more than 2,000 acres of the 11,689-acre Bolivar Peninsula.)

The full piece covers the science as well as the economics of barrier-island development. To read the whole thing, go here.

(* Full disclosure: She is my spouse.)