Government

Hey, Chris Christie: Don’t Rebuild in Harm’s Way


A collapsed house along the central Jersey Shore coast on Oct. 31, 2012. New Jersey got the brunt of Sandy, which made landfall in the state and killed six people.

Photograph by Mike Groll

A collapsed house along the central Jersey Shore coast on Oct. 31, 2012. New Jersey got the brunt of Sandy, which made landfall in the state and killed six people.

New Jersey Governor Chris Christie, usually a tireless advocate of individual responsibility and self-reliance, has been sending a different message since Hurricane Sandy devastated the Jersey Shore. Now he’s emphasizing a “we’re all in this together” message as he seeks support from his new best friend, President Barack Obama.

Christie wants the federal government—i.e., taxpayers in other parts of the country—to help rebuild the Jersey Shore back to the way it was before Sandy hit. That could be not only hugely expensive, but wasteful as well—because the next big storm could quickly wipe out the investment.

New Jersey’s barrier beaches are really nothing more than glorified sand bars. They’ve shifted shoreward about a mile since Colonial times. Trying to stop the force of nature is, in the long run, futile. “The definition of insanity is doing the same thing over and over again and expecting different outcomes,” says Jeffrey Tittel, director of the New Jersey chapter of the Sierra Club.

Christie has gained a national reputation for fiscal discipline that’s led to talk that he could be the Republican nominee in the 2016 presidential election. But if Christie pushes too hard for federal reconstruction funds, he risks losing his reputation for stand-up frugality. “The people who oppose government the most want the bailouts the most,” observes Tittel, speaking of both Christie and his supporters among shore residents and vacationers.

It’s right and decent for the nation as a whole to supply emergency assistance to the hard-hit communities that line the New Jersey coast. Their pain is real. The question is what happens after the emergency is over and it’s time to plan. Christie has one idea. In a briefing for the media, he said, “I don’t believe in a state like ours, where the Jersey Shore is such a part of life, that you just pick up and walk away.” He also said the government should not decide where building is and is not allowed.

That bravado rings hollow, though, when you stop to consider that Christie is hoping to put other people’s money at risk. Matthew Kahn, a professor at the UCLA Anderson School of Management, asks in a newly posted video: “What if New Jersey had to spend its own money for rebuilding New Jersey? It would build a more robust, resilient New Jersey with fewer people living near the coast.” Adds Kahn: “You take more risk when you are implicitly insured. When you spend your own money and you know you’re on the hook for any damage that occurs, you take more precautions.”

In other words, let the free market work. Shore residents are entitled not only to federal disaster aid that pays for rebuilding such critical infrastructure as roads, water lines, and sewer lines, but also to subsidized flood insurance. If they had to pay for the real cost of insurance from the private market, their premiums would be much higher—so much higher that many would decide a safe little cottage in the Poconos might be a better bet. Taxpayers in South Dakota would be spared having to bail out the Jersey Shore again and again.

Christie is right about one thing: Too many people have too much invested in the Jersey Shore to abruptly abandon the whole area to the seagulls. “The Jersey Shore is integral to our identity, and we have a $38 billion tourism economy. A significant portion of that is fueled by our shore,” says Lawrence Hajna, a spokesman for the state’s Department of Environmental Protection.

But at a minimum, Christie shouldn’t be luring more people and more investment into harm’s way by protecting shoreline residents through state and federal aid for rebuilt roads, water and sewer lines, and beach restoration. From fiscal years 2009 through 2012, the Army Corps of Engineers spent $436 million on replenishing the sand on beaches. Of that, New Jersey was the No. 1 recipient, with 27 percent of the haul, edging out Florida, according to statistics compiled by Howard Marlowe, a lobbyist who helps beach towns get restoration aid.

Much of that costly sand has now been washed out to sea, although some should filter back with the tides over the coming months. Environmentalists like Tittel argue that the money would have been better spent on helping people put their houses up on stilts—or moving out of harm’s way entirely.

New Jersey’s problem is a national problem. Even as climate change increases the severity of storms, the exposure along the nation’s coasts keeps increasing. A storm that would have wiped out a handful of fishermen’s shacks a few generations ago now takes out million-dollar homes. According to the U.S. Census Bureau, the nation’s coastal population grew by 40 million, or 84 percent, from 1960 to 2008.

New Jersey has a Coastal Blue Acres program that acquires land that’s vulnerable to storm damage. But it’s lightly funded, with only $15 million for coastal acquisition under a 1995 bond act. Overall, New Jersey ranks in the bottom five for smart response to coastal erosion, according to the nonprofit Surfrider Foundation, along with Alaska, California, Louisiana, and Puerto Rico.

Beach replenishment is an example of throwing good money after bad. Marlowe, the sand lobbyist, argues that it’s a good investment. The Army Corps of Engineers, he says, only does projects that cost less than the savings in terms of property that’s protected from harm by wide beaches and dunes. That could well be true. But it begs the question of why the property needing protection is there in the first place. “I’m not going to deny there are people living in hazardous places,” says Marlowe.

Chris Christie should think back to a lesson he undoubtedly learned as a child with a shovel and pail. Go ahead and build a beautiful sand castle on the beach. Just don’t expect anyone else to protect it for you when the tide comes in.

Coy_190
Coy is Bloomberg Businessweek's economics editor. His Twitter handle is @petercoy.

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