Is California Coming for Your Beach House?

Nossaman LLP

Yes, but the sea might beat them to it. In 2015, the California Coastal Commission adopted the Sea Level Rise Policy Guidance. This Guidance document discusses a number of potential measures for responding to sea level rise, including "managed retreat." As explained in the Guidance document, "[r]etreat strategies are those strategies that relocate or remove existing development out of hazard areas and limit the construction of new development in vulnerable areas." Examples of retreat strategies include the acquisition and buy-out of "threatened" properties. While many property owners have denounced managed retreat as nothing more than a land grab, it appears that some in the California Legislature have a different view. Just last month, numerous bills were introduced that would, if enacted, help facilitate managed retreat up and down the coast.

For example, California Assembly Bill 2619, which was introduced on February 20, 2020, would establish the Program for Coastal Resilience, Adaptation, and Access for the purpose of funding activities by the Coastal Commission and other select state agencies to help the state prepare, plan, and implement actions to address and adapt to sea level rise and coastal climate change. And, California Senate Bill 1293, which was introduced the following day, would "create a revolving fund to allow local governments to purchase threatened coastal properties for leasing purposes."

But if these bills pass, how will the government value the properties? Will they pay fair market value, or something less? Will the government use eminent domain to acquire properties from unwilling sellers? If the local government has a local coastal program, will that impact the valuation of the property? With these questions looming, one can easily imagine the large valuation disputes that are just beyond the horizon.

Make sure to check back with us, as we will continue to track these developments and report on any updates. (For additional background on managed retreat, see our previous post on January 7, 2019.)

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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