Removing federal subsidies from high‐hazard coastal areas slows development

Abstract

The US federal government has implemented a variety of policies and subsidies that help coastal development remain viable, including investments in risk reduction measures, subsidized flood insurance, and post‐disaster assistance. In this study, we explored how the removal of federal subsidies impacts coastal development patterns by measuring the causal effect of the US Coastal Barrier Resources Act (CBRA) on building activity. Implemented in 1982, CBRA withdrew eligibility for federal funding for infrastructure, post‐disaster assistance, and subsidized flood insurance along designated sections of coastal barriers (“CBRA units”). Using a novel built‐structures dataset, we employed a spatial regression discontinuity design to compare development rates within and outside of CBRA units in 1980 and 2016. We found that enactment of the CBRA has resulted in significant reductions in development activity: indeed, development rates were reduced by more than 75% in CBRA areas as compared to non‐CBRA areas. Our findings suggest that policies like CBRA can be effective at slowing development in other sensitive or hazardous areas, and could help to preserve natural environments for habitat conservation and climate adaptation purposes.