Using Development Financing Tools to Help Cover Costs of Adapting to Climate Change in Tornado Alley and Beyond

Abstract

In a future menaced by global climate change, to what extent can and should local communities use development financing tools — especially impact and linkage fee programs — to help defray the public and social costs of natural disasters? Should land use authorities require new real estate projects to internalize some of the potential costs that severe weather events may impose on their communities over time? Such programs might, for example, impose disaster impact fees on new development to fortify infrastructure and to improve emergency management systems or even to fund a reserve account to defray anticipated disaster recovery costs. Beyond that, should new development help finance any of the costs of retrofitting existing communities and new affordable housing projects to face natural disasters and the costs of recovering and rebuilding in those neighborhoods when disaster strikes? Can disaster impact and linkage fees help address problems of uninsured, underinsured, and uninsurable risks?To establish a framework for understanding the public financing challenge, Part I of this paper presents the problem in the context of evidence that climate change may cause more frequent and more severe tornadoes. Part II then develops a legal analysis equally applicable to other natural disasters that are even more commonly associated with climate change, such as extreme heat waves, hurricanes, coastal storm surges, forest fires, and flooding. The author concludes that disaster impact and linkage fee programs could play a small but meaningful role in tornado alley and beyond, but only if they can avoid or survive heightened judicial scrutiny under the U.S. Supreme Court land use cases and the rational nexus standard of state land use law. The current state of the law, especially following Koontz v. St. Johns River Water Management District, 133 S. Ct. 2586 (2013), creates a quandary for any land use authority that may consider resorting to development funding devices to help adapt the built environment to climate change.The author presented a first draft of this paper at the 13th Kratovil Conference on Real Estate Law and Practice: Adaptation of the Built Environment to Achieve Resilience to Climate Change, which took place in September, 2013 at the John Marshall Law School. He gratefully acknowledges the comments, suggestions, and encouragement provided by the other participants in that conference.