How to Retreat: The Necessary Transition from Buyouts to Leasing

Abstract

Moving assets out of vulnerable areas, known as “retreat,” is a necessary but unpopular option when coastal hazards impact land. Most people prefer protection options. Governments and private land owners tend to adopt a “wait-and-see” approach for retreat. This may be because the time for retreat seems some way off, or because protection has not yet been ruled out, or to avoid unwelcome news. This policy void has allowed people to assume that government will offer to “buyout” property on generous terms after coastal hazards inevitably force the owner to relocate. The problem with that assumption is that (a) it is unaffordable as a solution for all at-risk properties and (b) it acts as an incentive to intensify development in locations vulnerable to coastal hazards. It is, in effect, a form of market distortion which promotes maladaptive behavior. We therefore need to retire that assumption by articulating a standard default arrangement for retreat. This essay suggests that government should establish a default position of renting land, rather than acquiring it, once assets are abandoned by private land owners. This provides sufficient leverage to protect the public interest and a level of financial assistance to the relocating land owner, while allowing markets to properly reflect risk and enabling coastal adaptation.