Beachfront Blockade

By Susan Bady. Environmental concerns, natural hazards, and growth management are just a few reasons why housing development is so heavily regulated in coastal areas. It's not home builders' imaginations: Restrictions have tightened in recent years.

One hot spot is California's Central Coast, a region that encompasses San Luis Obispo and Santa Barbara counties. Rick Laughead, of BDC Development in Pismo Beach, just south of San Luis Obispo, says getting a coastal project approved "would require a tremendous amount of assets and patience and a battery of lawyers and environmental consultants. I have three projects [under development] in the coastal zone right now, but they were started in 1980 and are just now coming to fruition."

Governments at the federal, state, and local levels have a say in what is built on the nation's four coasts (Atlantic, Pacific, Gulf of Mexico, and Great Lakes). For example, the California Coastal Commission (CCC) delegates authority to local governments that have an approved coastal management plan. However, the state retains jurisdiction over specified geographic areas.

"Coastal commissioners are appointed by the governor and the state speaker of the house, and we have a Democratic governor and senate," says Laughead. "There's nothing wrong with that, except they have to appease a lot of environmental entities that are not interested in any kind of growth. And there's no appeal process from the CCC; you'd have to go to the state legislature."

Green Barriers

Not much new development is permitted along the ocean in Washington state, except in a few rural areas. Those who would develop property on Puget Sound tend to be discouraged by onerous regulations. "Our government is pro-environment and antigrowth," says Tom McCabe, executive vice president of the Building Industry Association of Washington (BIAW). "Bill Gates built his home on Puget Sound, but you would have to be a multimillionaire to get through that cumbersome process."

Washington builders and other pro-development groups were flabbergasted when the federal government listed salmon as an endangered species two years ago. According to McCabe, the listing cannot be justified because salmon runs are at an all-time high. Jodi Slavik, BIAW general counsel, says the federal Endangered Species Act has become the banner for environmental and no-growth groups. "You put the salmon banner behind the no-growth movement and it becomes very powerful," says Slavik.

The environmental movement is, in fact, the biggest obstacle to coastal development anywhere in the United States, says Andrew White, CEO of Palmetto Traditional Homes, Columbia, S.C. "The [environmentalists] don't want anybody to build anything," White says. Some city council members and homeowners, including those who relocated to the South Carolina coast from Northern cities, are also dead set against new development, he adds.

"There is that constant struggle, and I don't think it's any different here than in any other coastal community," says Pat Dowling, vice president of public and shareholder relations at Burroughs & Chapin, a Myrtle Beach, S.C., developer. Dowling, who used to be public information officer for the city, says Burroughs & Chapin supports regulations that preserve the environment and make coastal areas safe for the public but recognizes there has to be compromise on both sides. "We try to work with the city and the county on providing green space and that type of thing," he says.

But the increasing number of agencies involved in regulating coastal areas makes a burdensome process more so. Puget Sound builders have to contend with shoreline regulations that vary from county to county and city to city as well as guidelines from the state department of ecology (DOE). Of the latter, Slavik says, "They're clearly overreaching the authority granted to them." The guidelines prohibit the subdivision of land if any of the lots require stabilization in the form of retaining walls along the waterfront. But it's a moot point, Slavik says, because new and replacement bulkheads are prohibited in many areas. In South Carolina, it's the federal Office of Ocean and Coastal Resource Management (OCRM) that regulates activity in the state's coastal region. Palmetto's White, who is legislative chairman for the state HBA, says the OCRM continues to assume jurisdiction over isolated wetlands despite a court ruling that would indicate otherwise. "That's presumptive jurisdiction, and we've successfully blocked it in the legislature two years running."

Building codes — such as the new International Residential Code (IRC) — are compounding the problem in some states. "The [South Carolina] state codes council adopted [the IRC] before we had a chance to look at it, and local building officials don't know how to interpret the code," says White. Among other things, in some coastal areas the IRC requires hurricane straps and ties, shatterproof windows, and a structural engineer's stamp on every plan. Because affordable shatterproof windows aren't on the market yet, builders are screwing bolts around every window and cutting plywood that homeowners can use as makeshift hurricane shutters.

"For a typical 2,000-square-foot house, it looks like it's going to cost about $1,000 for the engineer's stamp, between $700 and $800 for additional strapping and ties, and no less than $75 per window for the bolts and plywood," says White. "So you can figure the impact of the IRC alone is going to be another $4,000 per house."

Negotiate or Litigate?

The lengthening approval process, as builders well know, also adds to the cost, especially if wetlands, grasslands, wildlife habitats, and other sensitive areas are part of a proposed development. There are success stories, however. Bermant Development, a Santa Barbara, Calif., builder and developer, has completed a number of coastal communities and has several new ones in the pipeline. "It takes a longer time and it takes working with a lot of interested parties and groups, but if you're a member of the community, that's what you do," says Bermant's John Campanella.

Sometimes a builder's only recourse is the courtroom. In Washington state, the BIAW legal department spends much of its time taking on out-of-control government, says Slavik. "We're still at the table and negotiating, but when push comes to shove, we find it more effective to go to court," she says. "There you have the benefit of an impartial judge, so we've got at least a 50-50 chance going in."

Last year, the BIAW won its lawsuit against the state DOE concerning shoreline rules. Although the decision was appealed, Slavik says the outlook is promising for builders. At press time, the BIAW was awaiting a Justice Department decision that would determine whether the group's planned suit to remove salmon from the list of endangered species goes to trial. While Slavik laments the necessity of litigation in her home state, Dowling sees light at the end of the tunnel in South Carolina. "We've moved beyond the combativeness that you first have when regulations start to tighten, to more of a middle ground in our discussions with regulatory agencies," he says. "I think it's a good thing that's happening here."

The problem with coastal development is not so much that there is more regulation than there was five or 10 years ago, but that it is more restrictive as the amount of developable land shrinks. And opposition from environmentalists is mounting. Some builders walk away, some fight, and others choose to work with government and community groups on a compromise, even though it takes longer and costs more.

—Susan Bady is based in Chicago.

Published in BIG BUILDER Magazine, September 2002