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Castles Made of Sand

The legal and ethical quandaries of rebuilding

The story is at once heartrending and predictable. A Nor’easter or hurricane drives rain and surging ocean and river water onto coastal land, devastating homes, businesses, public infrastructure, and people. Some lives are lost. Many more are upended. Displaced homeowners and businesspeople seek temporary and permanent aid of all sorts from governments and charities. The local dateline for the story could be Plum Island, Scituate, or Cape Cod. Boston may be next.

For decades, it has been an article of faith that, at least when it comes to homes, owners should be able to rebuild exactly in place, often with financial help from the government to cover some or all of the costs. How could it be otherwise? Absent erosion, the land is still there, owned as private property, waiting for its value to be renewed through resurrection of the home. Americans have endorsed an implicit contract between harmed individuals and society. When one of us is hurt, especially in a natural catastrophe where our own “agency” is not implicated, all of us want to help the victim. “There but for the grace of God go I” captures the spirit. The bigger the natural disaster, the greater the damage, the more the public help, it would appear.

Suddenly, however, this decades-old narrative is under pressure from, of all things, the weather. Climate change and its discontents have rendered the landscape of coastal areas especially problematic, from not only the effects of water but also politics and policies. Storms are no longer perceived as purely providential. Scientists predict that, with sea-level rise in the offing, coastal areas will face floods more often than before, with potentially devastating consequences to people and economies.

Debates swirl around the appropriate response: Coastal individuals, cities, and regions should armor themselves against future floods with hard infrastructure. Structures should be more resilient, able to flood and rebound in subsequent days and weeks. The built environment should, literally, elevate itself above the fray. The sounds of retreat from vulnerable areas are now being heard. Even the idea that private owners located in flood-prone zones should pay to stay is on the table.

Post-Katrina, post-Sandy, the shock of major flood events has worn thin, giving rise to sentiments that once would have been seen as cold at best, monstrous at worst. Put argumentatively, why should government bail out private individuals who have chosen — yes, chosen — to stay in harm’s way? Put more argumentatively, why shouldn’t government restrict or fully remove the choice of staying in harm’s way, given society’s humane inability to say no to help and bailouts in the throes of after-flood misery? This is where the smart writer puts down his pen and moves on to the next assignment.

For some, the evocation of private property rights, whether framed legally, financially, politically, or morally, is the only point to the discussion. But the right of individuals to use their property in any way they wish is pure fantasy. For centuries, the venerable common law of nuisance — sic utere tuo ut alienum non laedas — has restrained owners from using their property in ways that unreasonably interfere with a neighbor’s use of his or her property. Modern-day zoning and environmental laws have stretched restrictions placed on owners well beyond the bounds of nuisance concerns to promote and protect the public health, safety, and general welfare.

Policymakers are now considering laws that would impose new and costly obligations on owners in flood-prone areas. New or rebuilt structures would have to elevate themselves on piles or stilts. Expensive dry and wet flood-proofing standards would become norms in building codes. Mechanical systems that power buildings would now have to locate themselves on upper floors.

Geographic restrictions are no longer beyond the pale. The national government introduced revisions in 2012 to its flood insurance program, and the notion that government should provide flood insurance at below-market-rate premiums to owners who build and rebuild in unambiguously vulnerable areas may finally have worn out its welcome. It only took close to 50 years. In New York state, Governor Andrew Cuomo has proposed that government buy out owners whose homes have been destroyed by Superstorm Sandy. If an owner refuses, one imagines, the state could exercise its power of eminent domain and force the issue.

The holy grail of geographic restrictions, whether imposed through so-called rolling easements or other technical methods, is the outright prohibition of building or rebuilding in flood zones without financial compensation. The politics of this approach is one thing, the constitutional validity another. The United States Constitution’s Fifth Amendment states that government may not “take” private property for a public use or purpose without paying just compensation. The public purpose here is clear. The massive efforts of emergency responders, aid workers, and other government employees during and after an event engender obvious costs on society. Even if endangered individuals themselves can retreat prior to a storm (and not all do), they expect, even demand, that society help them out afterward, and a humane government cannot say no. Public policies designed to mitigate these costs (and temptations), including ones that take homes and their occupants out of harm’s ways before the next harm strikes, belong in the discussion.

The question is who pays, and whether government is constitutionally required to pay homeowners full, fair market value for their properties if it prevents them from using their land for a house or business or otherwise imposes onerous restrictions on building.

Laws that require owners proposing new structures to meet higher standards, or not receive development permission at all, are likely to survive legal challenges. The United States Supreme Court reiterated in this past June’s Koontz v. St. Johns River Water Management District case that government may, indeed, say no to development or say yes with conditions — so long as the restrictions are truly related to articulated public purposes and not overly demanding.

Laws that require owners to fortify their existing structures, even if they impose substantial costs, are also likely to pass constitutional muster. Think about laws that require installation of sprinklers or smoke detectors in buildings. Whatever public hesitations there may be about enacting such ex post facto laws — and surely the ability of an owner to absorb the costs is one of them — their constitutional foundation is on firm footing.

The toughest question is whether government may ban owners from building or rebuilding altogether without compensation, leaving the owner with the land and little else. In general, if government regulation fully denies an owner all use of his or her property, then the rule has been to compensate. That was more or less the case in the Supreme Court’s 1992 decision in Lucas v. South Carolina Coastal Council, where David Lucas had purchased two parcels of land on the South Carolina coast for close to a million dollars and wanted to build a home for himself on one plot and a speculative house on the other. At the time of purchase, the law allowed such development.

Shortly after his purchase, however, the South Carolina legislature enacted its Beachfront Management Act, creating a government agency with broad power to impose coastline restrictions. The newly formed Coastal Council drew a line in the sand, placing Lucas’ parcels on the seaward side. That meant no development for Lucas, who responded with a lawsuit that ended up in the Supreme Court. The Court agreed that a denial of all use would normally constitute a taking requiring payment of compensation. Even then, however, the Court declined to apply its rule to all cases by carving out an exception for situations where the state, prior to enacting the new regulation, had in place property and nuisance laws that themselves would have limited an owner’s right to develop his or her land.

Owner expectations in flood-prone areas will need to bend, slowly but inexorably, to the harsh downsides of a coastal location and a decreasing societal willingness to pay the tab when the inevitable strikes. Twenty climate-change hardened years later, a home in a flood zone may indeed be deemed a public nuisance. To get from here to there will not be easy, and transitional aid from the rest of us will be crucial, but a sea change in owner attitudes will need to become as much a reality as the sea change in water levels.