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Left Holding the (Sand) Bag

Who Will Pay for the Damage Caused by Rising Sea Levels? It Could Be Your Homeowners Association!

The San Jose Mercury News:

From Antioch to North Richmond to Redwood City, a slowly rising Bay could endanger the properties of as many as 270,000 Bay Area residents and cause some $56.5 billion in damage by the end of the century unless measures are taken to protect them, scientists warn.

But surprisingly, few cities are taking action.1

November 5, 2008…

In the event of projected flooding sandbags are available at the Benicia Corporation Yard. Some assistance may be available but residents should bring shovels and plan to fill and load the bags themselves.2

The chance of flooding in cities in and around San Francisco Bay is not just speculation. It has happened many times in the past and it will happen again and again if sea levels continue to rise or a “perfect” storm joins with normal high tides. It's easy to see why. Take a look at one of the several interactive devices used to illustrate the first areas around the bay that will flood when the sea rises. It should come as no surprise that they are the same locations where the bay was originally filled to create housing and commercial developments. These low-lying areas—Redwood Shores, Alameda, Vallejo, Alviso and many others—were bay bottom and tidelands just a few decades ago. Now there are thousands of homes. The flood danger is obvious.

And, thousands of new homes are projected for a dozen or more major developments being proposed for additional tidelands and other low-lying locations around the bay:

At least 12 major developments with as many as 56,000 new homes are planned at the edge of the Bay over the next 5 to 20 years…many are in low-lying areas experts say are potentially vulnerable to flooding associated with long-term sea level rise. Some cities and counties have strategies to deal with that problem, others do not.3

But what is different today from developments built, say, three or more decades ago is that many of these new developments will be built as community associations and much of the expensive engineered facilities necessary to protect these developments from storms, rising tides and sea levels will not be owned by cities or the state, but instead will be the responsibility of homeowners.

Streets, storm sewers, parks, parking lots, and sidewalks in old developments are owned and maintained by cities and counties using tax dollars raised from a much broader tax base. In newer projects these “public” works are instead made the responsibility of private owner's associations. The advent of the community association was a boon to tax-starved local governments who saw them as a way to promote development and raise new tax dollars while avoiding liability for these new facilities.

The proposed new developments around San Francisco Bay will tempt local cities and counties to vest the responsibility for necessary flood control improvements to local community associations or small, special districts. Responsibility for Levees, berms, pumps, riprap, and retaining walls built by the developers of these large projects could eventually find themselves maintained and repaired by homeowner associations.

The beginning step of this massive shift of responsibility away from governments and onto landowners, one that has been widely used for many years, is the use of local improvement, levee, or reclamation districts. Much of the Sacramento delta, a system of sloughs and islands on which more and more housing is being built and proposed is maintained by such “special” assessment districts, not the state or local cities or counties. The taxpayers within those districts pay for all levee maintenance and repair work.

Originally these districts were formed to give farmers quasi-governmental authority over the properties in a particular area. It also shifted fiscal responsibility away from larger jurisdictions and a broader base of taxpayers. But a flood disaster in an agricultural area will only inundate crops. The same disaster in a residential community will be much worse. It matters who is in charge and who is responsible for maintenance of such critical facilities.

A large community association functions in a manner similar to a special district—ownership of public works is handed off by the developer to the association when development is complete, and the owners, through assessments, pay for the ongoing maintenance and repair. Cities and counties, which gain considerable tax benefits from new development, are able to shift the long-term responsibility for the cost of maintaining improvements associated with that development to property owners. This can be done with either a community association or a special district.4

By this mechanism, developers avoid long-term responsibility for such projects. The homes and buildings within the development are sold off in the near term. The developer takes the profits and is protected from long-term liability not only by the assessment arrangement that shifts the cost of future repairs to owners, but also by various statutes of limitation that cut off legal liability in just a few years after the project is complete.

After that, the property owners within the association, or within the local special district, are on their own. So just as the liability for landscaping, streets, parks, even schools and unstable hillsides5 have been shifted to local homeowners in recent years, there is no reason why the flood control improvements necessary to build housing on former tidelands won't be similarly vested in the buyers of all of this new housing. Their maintenance and repair obligations start immediately, and over time, the facilities may prove inadequate to forestall the inevitable rise in sea level, leaving homeowners on the hook for a lot more.

There is another problem. We have written many times about the looming failure of community associations to keep pace with the growing cost of maintaining even simple common area components—but can you imagine what will happen if much more sophisticated, not to mention critical, improvements are to be maintained solely by owner assessments--that levees and retaining walls, essential to keeping the waters of San Francisco Bay from flooding hundreds or perhaps thousands of homes, will be dependent upon the willingness of individual homeowners and their associations to provide adequate funding? It's one thing to let the landscaping go to seed or to allow chuckholes to exist in the parking lot, but a crumbling bay levee is at another threat level altogether.

Of course, the proponents of new bay shore development contend that it will be good for the economy, for the tax base, and, ironically, for the environment, since it will shorten commute times for many bay area workers. But these benefits are all short term--if they exist at all. In fact the “benefits” are more likely to be realized only by the developers and the local taxing authority. There is lots of land available for necessary higher-density infill away from the shoreline on higher ground that would not be threatened by tides and sea level. It costs more to develop, perhaps and may not provide the economies of scale offered by salt ponds and tidelands, but its eventual owners would not inherit the potential for both fiscal and physical disaster.

Anyone concerned with these new bay shore development proposals should ask the city one simple question:

Who will be responsible for keeping these flood control improvements working in the years to come?

Don't be surprised by the answer.

  1. Page 1, San Jose Mercury News, June 13, 2010.
  2. Website for the City of Benicia, California.
  3. San Jose Mercury News, Ibid.
  4. A special district would usually be the choice if the facilities to be maintained include multiple new developments or community associations.
  5. In this case the district is called a “GHAD” or Geologic Hazard Abatement District and provides a vehicle for developers and cities to dispose of responsibility for unstable, and thus unusable, pieces of land left over from larger developments.
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