Sink or Sell: Using Real Estate Purchase Options to Facilitate Coastal Retreat
Despite the political contention surrounding climate change, scientists almost universally agree that sea levels are rising and will continue to do so. In light of this inevitability, commentators and policymakers have begun to recognize that retreat—the withdrawal of people and development from coastal areas—will become necessary, at least in certain areas. Even so, many still question the viability of retreat given the exorbitant economic, political, and legal costs it generally faces. In particular, hardline opposition to retreat runs strong among many coastal landowners. This Note introduces a device for implementing retreat with the potential to overcome these obstacles: real estate options that do not vest until sea level rise materially harms coastal properties. By establishing a plan for retreat today but delaying withdrawal until necessary, such options can reduce the ultimate costs of retreat while still protecting coastal communities. Even more significantly, this approach invites landowners to bet on the likelihood of sea level rise, leveraging their current resistance so as to secure a promise to relocate if—and more likely when—retreat becomes the only available option.
Richard Turner Henderson
J.D. Candidate, 2018, Vanderbilt Law School; B.A., 2014, the University of North Carolina at Chapel Hill.