MANAGED RETREAT - Funding Difficult Conversations and Initial Steps at the Local Level.

• Author: Mickel, Gabriella

TABLE OF CONTENTS INTRODUCTION I. THE GAP BETWEEN MANAGED RETREAT RESEARCH AND IMPLEMENTATION A. The Importance of Planning B. The Legal Barriers C. The Issue of Funding II. DEVELOPERS IN CLIMATE VULNERABLE AREAS SHOULD COVER EXTERNALITIES III. THE LEGALITY OF A CLIMATE RESILIENCE IMPACT FEE A. Would the Climate Resilience Impact Fee Survive in California-- the Most Wildfire-Prone State? B. Would the Climate Resilience Impact Fee Survive in Florid-- the Second Most Flood-Prone State? CONCLUSION INTRODUCTION

According to the National Oceanic and Atmospheric Association (NOAA), 2021 was the sixth consecutive year with an above-normal Atlantic hurricane season. (1) In thirty years, chronic flooding caused by rising sea levels could impact 300 million people. (2) Wildfires and droughts have also become increasingly frequent and severe. (3) Researchers associated 7,415 deaths in the U.S. from 1999 to 2010, an average of 618 per year, with exposure to excessive heat. (4) Unnatural disasters, such as these, are making many areas more difficult to inhabit. (5) One response has been to voluntarily, or at least with forethought, move from disaster-prone areas, an action commonly referred to as managed retreat. (6)

Managed retreat takes many forms. Some municipalities have utilized planning, zoning, and environmental impact assessments to subtly manage retreat. (7) For example, Punta Gorda, Florida limits new development in flood-prone areas and prohibits hard shoreline armoring; (8) however, Punta Gorda has also utilized another managed retreat tactic--buyouts. Punta Gorda buys out properties to help people move away from the coastline. It then uses the land to build living shorelines that buffer floods and facilitate the inland migration of coastal habitats--increasing the resiliency of the area. (9) Indeed, many communities pursue federal funds for buyouts from the Federal Emergency Management Agency (FEMA) and the U.S. Department of Housing and Urban Development (HUD). (10) Since the 1980s, FEMA has funded 40,000 buyouts. (11) A couple of states, like New Jersey, have, or are exploring, state-run buyout programs. (12) A few municipalities use a combination of federal and local funding for buyouts. For example, Charlotte-Mecklenburg County, North Carolina uses FEMA Hazard Mitigation grants, a local storm water fee, and profits from leasebacks. (13) As the climate crisis progresses, these experienced communities can provide guidance on these methods and offer insight on how to build managed retreat plans that fit community values.

Indeed, climate change will likely require widespread managed retreat. Managed retreat expert A.R. Siders stated:

Real estate worth $1.4 trillion is already located within 700 feet of the US coast, and sea-level rise alone is projected to affect 4-13 million Americans. If just one tenth of these people or buildings retreated, it would cost $140 billion--almost 30 times what FEMA has spent on managed retreat to date--and affect 5-10 times as many people. Even low sea-level rise projections and existing development will require managed retreat to occur at a much larger scale and on a faster timeline than has yet been achieved. (14) The anticipation of widespread relocation has even resulted in naturally climate resilient cities planning to receive those in search of a new home. (15) Cincinnati, Ohio's climate action plan includes an entire section titled "Climate Haven--Leverage climate resilience to attract new business and residents." (16) Managed retreat as an adaptation strategy is gaining popularity, and, in many cases, is likely the most economical and safest choice.

In fact, the difficulties and dangers of rebuilding and hard armoring (17) in place are becoming more apparent. For example, post-disaster communities have built seawalls, only to find that seawalls are not a long-term solution. (18) Maladaptation "refers to actions that may lead to increased risk of adverse climate-related outcomes, including via increased greenhouse gas emissions, increased or shifted vulnerability to climate change, more inequitable outcomes, or diminished welfare, now or in the future. Most often, maladaptation is an unintended consequence." (19) Seawalls are often categorized as maladaptive due to the 'coastal squeeze' effect on native vegetation, (20) the "colossal" carbon footprint of concrete, (21) the relatively large expense for construction and maintenance, (22) and the risk of inequitable protections. (23) As the sea-level rises and unnatural disasters intensify, more communities may be open to considering managed retreat over maladaptive action; however, managed retreat has not yet fully made its way from academia to mainstream climate action planning. (24) This paper offers a possible solution for closing the gap between the relocation that will happen and the research and planning methods that lay out how relocation could unfold in a safer and more equitable way. For relocation to unfold in a safer and more equitable way, it must be done in a manner that (1) aligns with community values in each locality, (2) navigates legal barriers to managed retreat, and (3) creates blue-sky funding for adaptation, including managed retreat planning and implementation. This paper also argues that developers continuing to build in climate vulnerable areas could and should help cover the risk of their actions. Part I lays out the legal importance of planning for retreat, as well as the need for initial funding for community-level planning and experienced personnel. Financing managed retreat is a developing area of study. Few scholars have explored options for municipalities to fund difficult conversations about and initial steps towards managing retreat, especially pre-disaster. Yet, without blue-sky funding, at least some of which is generated at the local level, retreat from climate-vulnerable zones will likely unfold inequitably. Thus, Part II explores how community benefit agreements between communities and developers in climate-vulnerable areas could provide resources to bridge the gap between research and implementation. Part II also introduces the idea of a climate resilience development fee, which could provide the needed blue-sky funding (25) to implement managed retreat. Part III analyzes the validity of a climate resilience impact fee in California and Florida, two states in which the consequences of climate change are severe enough for communities to begin to consider managed retreat. By utilizing CBAs and a climate resilient development fee, communities could raise the funding and resources required to begin to consider whether, and in what form, managed retreat is right for them.

1. THE GAP BETWEEN MANAGED RETREAT RESEARCH AND IMPLEMENTATION

   Most managed retreat in the U.S. has occurred post-disaster with little to no pre-event planning; however, "[a]pproaching managed retreat in this way ... is not likely to adequately address the magnitude of the changes that climate change will bring. Current approaches also are not consistent and often lack a comprehensive plan that would maximize benefits to both the displaced and receiving communities." (26) Case studies and other research around managed retreat implementation exist. (27) The question thus becomes why aren't communities exploring the option when there is such a need for managed retreat planning? A.R. Siders categorizes barriers to managed retreat as psychological (fear, optimism bias, status quo bias, place attachment, retreat is defeat), institutional (subsidized risk, disincentived action, authority mismatch), and practical (lack of learning, lack of evaluation, inequity, logistics). (28) For managed retreat to succeed widely, it must be done in a way that (1) aligns with community values in each locality, (2) navigates legal barriers to managed retreat, and (3) creates blue-sky funding for adaptation, including managed retreat planning and implementation.

   1. The Importance of Planning

      Planning would allow communities to avoid or mitigate the inequities of unmanaged retreat (in the form of traumatic post-disaster retreat or chaotic, market-driven retreat), identify shared community values, understand local climate vulnerabilities, (29) and protect their local governments against takings claims. Large-scale retreat is eminent. Retreat can take the form of traumatic post-disaster retreat; chaotic, market-driven retreat; or forward-looking planned retreat. (30) Post-disaster retreat in the U.S. has occurred and will continue to occur. For example, in 2017, according to phone tracking data, about 400,000 island residents left Puerto Rico in the five months following Hurricane Maria. (31) In 2016, over a decade after Hurricane Katrina, New Orleans' population stood at 20 percent below the 2000 census count. (32) FEMA notes that 40 percent of small businesses never re-open post-disaster and an additional 25 percent fail within a year. (33) Obtaining federal funding to rebuild can be a complicated and slow process, which may not be worth it when the funds themselves are insufficient. Additionally, homelessness increases, (34) and public housing may not be rebuilt. (35) Unnatural disasters also have inequitable impacts. For example, racial inequalities in New Orleans made Hurricane Katrina even worse for Black Americans. (36)

      Chaotic, market-driven retreat results from climate risks stressing the financial resilience of real estate and insurance markets. The stress on real estate and insurance markets, in turn, burdens households, businesses, and local governments. (37) "In a market-driven retreat, individuals and families, especially property owners, must make stressful, deeply emotional decisions about whether and when to move away from at-risk locations without the support of local government and community-based resources, such as facilitated processes, technical information, financial analyses, and partnering." (38) Due to...