Column: Managed retreat from eroding shorelines

Last October, the North Shore Coastal Resilience Working Group published its report with a recommendation to establish a managed retreat program “to provide a pathway for affected landowners to voluntarily vacate affected properties and utilize shoreline areas for public benefit” (hawaii.surfrider.org/northshoreworkinggroup). In December, Chip Fletcher and Colin Lee of the University of Hawaii proposed the state use some of its budget surplus to acquire all of the North Shore properties in the most affected part of Sunset Beach (“Use surplus to protect Sunset Beach,” Dec. 25, 2022, Island Voices, Star-Advertiser). But their proposal was more a one-time fix than a managed retreat program.

Shoreline erosion presents a difficult problem. Beachfront property on the North Shore is some of the most desirable and expensive land in the islands. To protect their property, owners, engineers and builders are coming up with ad hoc solutions, and the county and state are mainly reacting to their plans. The result has been ineffective protection of private property and too little concern for the impact on the public beach.

The basis for managed retreat is the recognition that the best way to protect the public beach is to allow the shoreline to recede. Once that becomes county and state policy, with strict enforcement to prevent measures such as sea walls, private property owners will be forced to accept erosion and possibly eventual loss of their property.

A hard-nosed approach to managed retreat would be to force the property owners to accept receding shorelines and eventual condemnation, then the county or state could acquire the land for little cost. This is likely to result in legal battles and lots of enforcement actions as property owners seek to protect their property values.

A less contentious approach would involve compensating the affected property owners for participating in managed retreat. Knowing that it is public policy to allow the shoreline to recede, and that the rules will be enforced, will incentivize owners of eroding shoreline property to participate in the managed retreat program. Participation should probably be a one-time offer, either join or take your chances on losing everything someday.

One idea would be to buy the property then lease it back to the owner or someone else. The purchase price and the lease amount wouldn’t necessarily be at market rates. Property with a house about to fall onto the beach could be deemed less valuable. Expected useful life of the house would be a major factor in assessing the property value. The goal is to recoup as much of the cost of the property as possible with the lease rents before the house is so threatened by erosion that it is condemned.

For example, consider the beachfront properties between Sunset Beach Park and Rocky Point, the area receiving so much attention lately. There are 26 beachfront properties along this stretch with appraised values ranging from $2 million to $4 million. Suppose they are acquired for an average of $3 million each for a total cost of $78 million. Lease rent for a beachfront house on the North Shore could range from $5,000 to $40,000 per month, with the high end being vacation rental rates. Suppose you could get an average of $10,000 per month. At that rate it would take about 25 years to fully recoup the cost of the properties. Of course, some of the houses might be condemned because of erosion within 25 years. The public will end up paying whatever is not recouped from lease rents to convert this stretch of beachfront to public property and protect the beach.

With some creative financing, it’s possible to devise a fair mechanism for implementing managed retreat from eroding shorelines.

Jim Richardson, a retired associate professor at the University of Hawaii Shidler College of Business, lives in a beachfront home on the North Shore.