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Shore builders and taxpayers

THE Cape Hatteras Lighthouse, off the coast of North Carolina, is only 150 feet from the water's edge. One hundred years ago it was 1,500 feet away. Unless something is done soon, this historic landmark will be claimed by the sea - like the more than 600 ships lost in the adjacent waters of Diamond Shoals. Since the United States government has already spent several millions of dollars protecting and shoring the lighthouse, Washington is likely to come to the rescue again. Its reasons range from the sentimental to the legal.

The lighthouse is beautiful. It has served seamen well over the years, though its lighthouse role has been reduced by modern navigational aids and a better-located beacon out to sea. Legal reasons for more federal help include the obligation to protect historic monuments, enhance recreation in national seashores, provide educational opportunities, and aid navigation.

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Cape Hatteras Lighthouse will exist, in some form and location, for years to come. The public will pay for this.

Yet the American taxpayer should not be required to pay for many other threatened structures along shorelines.

Public policy about building on the shoreline is mainly restricted to barrier beach areas or coastal and river areas that are subject to flooding.

The Coastal Barrier Resources Act restricts federal expenditures in certain barrier areas; the intent is to leave fragile ecosystems alone. The National Flood Insurance Act is somewhat similar; it aims to discourage federal investment and human activity in flood plains.

These laws do not reach far enough. Massive buildups have occurred on all coastal margins; they are likely to be affected by a further sea-level rise and the larger number of severe storms that may result from global warming in the coming decades.

The science underlying these changes is not precise or universally supported. Yet one need only understand the political calculus that will be energized as one clump of condos after another washes out to sea: Politicians attempting to please owners will try to concentrate benefits in the near term, for a limited constituency. They will try to spread the costs over as many taxpayers and as far into the future as possible.

That formula has a relentless corollary: Bureaucracy responds as a rising tide that never recedes.

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Our suggestion is a simple one, consistent with political realities and the need to stem increasing bureaucracy:

Prohibit any federal insurance for any purposes that relate to the loss of private property along, next to, or even near coastal areas and zones.

Saving Cape Hatteras Lighthouse for national sentiment is one thing. But it should not serve as a false precedent to justify bailing out thousands of private property owners who should not be building on the shoreline in the first place. Indeed, they would not build if they knew no taxpayer bailout was coming.

Garry D. Brewer is Frederick K. Weyerhaeuser professor at the Schools of Organization and Management and of Forestry and Environmental Studies, Yale University. Martin Shubik is Seymour H. Knox professor of mathematical institutional economics at Cowles Foundation and School of Organization and Management, Yale University.

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