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<doc callnum="HD279 .B275 1981">
<metadata>
	<titleStmt>
		<mainTitle nfc="0"><title>Barrier island development near four national seashores</title>/<respStmt>prepared for the Council on Environmental Quality ... [et al.] ; by Sheaffer &amp; Roland, Inc.</respStmt></mainTitle>
	</titleStmt>
	<authorStmt>
		<corpAuthor><name>Sheaffer &amp; Roland.</name></corpAuthor>
		<corpAuthor><name>Council on Environmental Quality (U.S.)</name></corpAuthor>
	</authorStmt>
	<imprint><pubPlace>Chicago</pubPlace>:<pubName>Sheaffer &amp; Roland</pubName>;[<pubPlace>Springfield, Va.</pubPlace>:<pubName>Available from NTIS</pubName>],<pubDate>1981.</pubDate></imprint>
	<classStmt>
		<locClass>
			<subject cat="top">Real estate development</subject>
			<subject cat="geo">Southern States.</subject>
		</locClass>
		<locClass>
			<subject cat="top">Barrier islands</subject>
			<subject cat="geo">Southern States.</subject>
		</locClass>
		<locClass>
			<subject cat="top">National parks and reserves</subject>
			<subject cat="geo">Southern States.</subject>
		</locClass>
	</classStmt>
</metadata>

<text xml:space="preserve">
<pb n="1" />

        H T)

                                BARRIER ISLAND DEVELOPMENT
                               NEAR FOUR NATIONAL SEASHORES

                                     Prepared for the

                             Council on Environmental Quality

    V)
                           Federal Emergency Management Agency,
                             Federal.Insurance Administration

                               Department of the Interior,
                                Fish and Wildlife Service
                                            and
                                  National Park Service

                                 Department of Commerce,
                    National Oceanic and Atmospheric Administration,
                            Office of Coastal Zone Management

                                     property of CSC Libra"

                                             By
                                 Sheaffer &amp; Roland, Inc.
                           Chicago - Washington, D.C.     Denver

                                         April 1981

        HD                        U . S . DEPARTMENT OF COMMERCE NOAA
        258                       COASTAL SERVICES CENTER
      j

         B275                     2234 SOUTH HOBSON AVENUE
        1981                      CHARLESTON, SC 29405-2413
<pb n="2" />

                                        CONTENTS

                                                                       page
            ACKNOWLEDGMENTS

            LIST OF
            TABLES                                                      iv

            EXECUTIVE SUMMARY                                             1

            INTRODUCTION                                                13
                Purposes of Study                                       13
                Data Collection and Evaluation                          16

            SYNOPSIS OF CASE STUDIES                                    17
                Trends in Land Value                                    17
                Access                                                  24
                Water Supply                                            32
                Wastewater Management                                   35
                Disaster Assistance                                     40
                Flood Insurance                                         45

            IMPLICATIONS FOR FEDERAL POLICY                             51
                Development Policy                                      51
                Protection Policy                                       54
                     Protecting Noncontiguous Barrier islands           56
                     Regulating Contiguous Barrier Units                59
                     Benefits of an Acquisition Policy                  63
                Conclusion                                              66

            REFERENCES                                                  68
<pb n="3" />

                                   ACKNOWLEDGMENTS

                Many people assisted in this study of barrier island
            development. We particularly want to acknowledge the work of
            Malcolm F. Baldwin, Senior Advisor, President's Council on
            Environmental Quality, for his efforts leading to the study
            and for his guidance while it was being completed. For her
            sensitive and knowledgable editing of this study, Irene
            Gordon has our special thanks and admiration.

                More than one hundred individuals were interviewed and
            contributed to the case studies. Their knowledge of the case
            study communities and the history of local development was-
            invaluable to us. These people are too numerous to name, but
            they have our thanks and appreciation.

                Project staff for Sheaffer &amp; Roland, Inc. were: J. David
            Mullen, Economist; Louis T. Rozaklis, Environmental Engineer;
            and Penny Wallingford, Planner. H. Crane Miller was the
            Principal Investigator and is responsible for the technical
            adequacy of the study. John R. Sheaffer, President, provided
            overall direction and guidance.
<pb n="4" />

                                       TABLES

                                                                     page

                     Undeveloped, Unprotected Barrier Island          15
                     Acreage on the Atlantic and Gulf of Mexico
                     Coasts (September 1980)

            2        Oceanfront Land Sales in Study Communities       19
                     Cost per Acre

            3        Chronology of Vehicular Access to Study          26
                     Communities, Funding Sources, and Periods
                     of Principal Development

            4        Costs of Access to Study Communities             31

            5        Water Supply Systems Costs in the Study          36
                     Communities

            6        Costs of Wastewater Facilities in Study          41
                     Communities

            7        Federal Funds for Disaster Response and          44
                     Recovery, Bridge Construction, and
                     Airport Repairs - Hurricanes Camille,
                     Frederic, and Allen

            8        Flood Insurance in Force and Claims Paid         46
                     in Study Communities

            9        Comparison of National Flood Insurance           47
                     Experience with Experience in Study
                     Communities (1978-1980)
            10       Comparison of Pre- and*Post-Hurricane Flood      49
                     Insurance Coverage (Mobile County, Alabama;
                     Pensacola Beach, Florida; and South Padre
                     Island, Texas)

            11       Federal Expenditures in Three Study Areas in     52
                     Relation to Developed Acreage

            12       Estimated Potential Costs of Developing          53
                     Barrier Islands in April 1980 Inventory
                     Based on Present Worth of Current Federal
                     Programs
<pb n="5" />

           13       Estimated Potential Costs of Developing           55,
                    Barrier Islands in August 1980 Inventory
                    Based on Present Worth of Current Federal
                    Programs

           14       Comparison of Estimated Potential Costs of        64
                    Public Purchase of Barrier Islands Versus
                    Estimated Potential Costs of Current Federal
                    Programs to Support Island Development

                                                                        IV
<pb n="6" />

                                  EXECUTIVE SUMMARY

            Introduction

                The first line of storm defense for a thousand miles of
            Atlantic and Gulf coastlines is their barrier islands -- a
            succession of low-lying, narrow islands, spits, and bay
            barriers generally located parallel to the mainland coast.
            These are geologically recent structures formed by
            interactions of waves, currents, tides, winds, and sediments.

                The National Park Service has identified nearly 250
            barrier-island units along the two coasts, consisting of
            single islands or clusters of barrier structures. Barriers
            generally consist of sands or other kinds of unconsolidated
            sediments. On their seaward side, the barriers are more
            often fronted by a beach; on the mainland side, by highly
            variable zones of wetlands. (See Figure 1.)

                Development on barrier islands is a gamble between time
            and nature. The islands change position, often very rapidly,
            in response to storms, changes in water level, and changes in
            current patterns. The barriers are generally receding toward
            the mainland, responding to the progressive rise of sea
            level. Among the hazards are the migration of old inlets,
            formation of new inlets during storms, and storm overwash
            that can undermine foundations by liquefying soil. The
            combination of rising water level, coastal storm surges, wave
            action, and high winds make development hazardous on many
            parts of the islands.

                Despite the hazards, development on barrier i'slands has
            been growing at a rate greater than 6,000 acres per year.
            That rate, if applied to the remaining undeveloped islands
            identified by the National Park Service, could consume the
            developable upland portions of those islands by the year
            .1995, just 15 years from now. In 1950, only some 90,000
            acres were developed; the Department of Interior reported
            that 228,680 acres were developed by 1973-74, and an
            estimated 280,000 acres by 1980.

            The Study

                In recent decades the federal government has acquired
            several barrier islands and established them as national
            seashores. This report explores the impact of public land
            acquisition on land values on adjacent barrier islands and
            mainland communities. It analyzes the developmental history
            of communities near four national seashores on the southeast
<pb n="7" />

                                                                                              FIGURE 1.
                                                       EXAMPLES OF BARRIER STRUCTURES

                                                          BAY BARRIERS                                BARRIER SPITS                         BARRIER ISLANDS

                                                                   BAY HEAD
                                                                                                          0                              E TUARY

                                                                                                                                                               INLET

                                                            -7                                                   INLET

                                                                           Source: Oceanu  No. 23, Vol. 4, Winter 1980-81
                                                                                  with permission of Woods Hole Oceanographic Institution.
<pb n="8" />

            Atlantic and Gulf of Mexico coasts. Case studies were
            carried out in the following areas:

            State              National Seashore               Adjacent
                              (Authorization Date)       Counties,Communities

            North Carolina     Cape Hatteras (1938)      Dare County; Nags
                                                         Head; Kill Devil
                                                         Hills

            Georgia            Cumberland Island         Camden County; St.
                               (1972)                    Marys; Glynn County;
                                                         St. Simons Island;
                                                         Sea Island

            Florida,           Gulf Islands (1971)       Dauphin Island,
            Alabama,                                     Alabama; Pensacola
            Mississippi                                  Beach, Florida

            Texas              Padre Island (1962)       Cameron County;
                                                         South Padre Island

                The study focused on several questions. Had withdrawing
            the land for national seashores had a significant impact on
            land values in neighboring communities? How had development
            in these communities been affected by the accessibility of
            the community itself or by the accessibility of the national
            seashore? Had other external factors, including the adequacy
            of water supply and wastewater treatment and the availability
            of flood insurance, been a significant factor? Had community
            development or expansion been influenced by federal
            assistance programs and policies, and at what cost? Finally,
            is federal acquisition of national seashores a cost-effective
            policy for protecting barrier islands from unsuitable
            development?

            MajorFindings

                Trends in Land Value

                Increases in real estate values in communities adjacent
            to the four national seashores and directly attributable to
            federal land acquisition were not immediately measurable in
            communities that had not reached or approached full
            development.

                Impacts on land values in adjacent communities from the

                                                                                3
<pb n="9" />

            withdrawal of federal lands from the marketplace may be
            delayed tens or scores of years after seashore acquisition,
            depending on the rate at which adjacent communities grow. In
            adjacent communities approaching full development, impacts of
            federal land acquisition on land values can be identified and
            measured.

                External factors (road access, urban infrastructure and
            utilities, septic system moratoria, and naval bases) had a
            more immediate and measurable impact on land values in
            adjacent communities than did acquisition of the national
            seashores.

                Access

                Development on adjacent barrier islands was nonexistent
            or negligible until vehicular access by road, causeway, or
            bridge was available. However, convenient access per se did
            not lead immediately in every case to extensive development
            in the adjacent communities.

                Where no road access exists to the national seashore,
            development in adjacent communities (whether on the mainland
            or on adjacent barrier islands) has not been measurably
            affected by federal acquisition of the national seashore,
            c.f., Cumberland Island, Gulf Islands (Mississippi islands).

                Where road access exists to the adjacent community
            independent of road access to the national seashore,
            development and land values in the adjacent community are not
            measurably affected by seashore acquisition, c.f., Dauphin
            Island, South Padre Island.

                In all instances studied, initial development of road,
            bridge, or causeway systems was financed by private, local,
            and state interests. Federal participation came later,
            through funding the improvement or replacement of existing
            systems. (The substantial costs of these and other federal
            assistance programs are discussed in later sections.)

                Water Supply

                In several adjacent communities that are on barrier
            islands, increasing density of development caused them to
            rely on mainland sources for water.

                Only two communities studied still obtain 100 percent of
            their potable water from wells on the island, and these
            systems are being affected by salt water intrusion and

            4
<pb n="10" />

            infiltration and inflow of polluted waters. Both communities
            have septic system or building moratoria in effect to
            restrict new development.

                Availability of water from island or mainland sources has
            not been a constraint on development in most of the study
            areas. An exception is South Padre Island, where the
            availability and cost of additional water rights are limiting
            further development.

                Federal expenditures (in the form of low interest loans,
            grants, and donation of federal property) contributed to
            establishing or upgrading water supply systems in some of the
            study areas. Community systems in the Nags Head - Kill Devil
            Hills area and on St. Simons Island benefited from federal
            loans and sale of excess property, respectively. Expansions
            of existing systems in South Padre Island and Nags Head -
            Kill Devil Hills also received federal grants and loans. A
            currently planned expansion to the facilities at Dauphin
            Island awaits similar federal aid.

                Wastewater Management

                In all communities studied, initial development relied
            primarily on septic systems for disposal of wastewater; as
            development increased, septic systems tended to exceed the
            capacity of local soils to assimilate the wastes.

                In all study communities, the provision of a complete
            sewerage system and wastewater treatment facilities has
            become a requisite for prevention of environmental
            degradation and for continued development on the islands.
            Septic system moratoria were in effect in Kill Devil Hills,
            Dauphin Island, and St. Simons Island, when the case studies
            were conducted.

                In only one of the study communities were federal monies
            for wastewater management systems expended as part of the
            initial costs of development of the islands. The original
            wastewater treatment plant and sewer system on St. Simons
            Island was built by the U.S. Navy and sold as excess property
            to Glynn County in 1947.

                Federal funds spent so far in connection with wastewater
            management in the study communities are: 201 planning funds
            for wastewater treatment facilities and one construction
            grant (at South Padre Island). The federal contribution is
            estimated to be $3.3 million.

                                                                        .5
<pb n="11" />

                 Two of the study areas are currently seeking federal
             construction grants for new or expanded wastewater treatment
             facilities: Dauphin Island, Alabama ($3.5 million) and Dare
             County, North Carolina ($7.5 million).

                 Disaster Assistance and Flood Insurance

                 Federal disaster assistance funds of at least $43 million
             will be expended in two of the study communities as a result
             of Hurricanes Frederic and Allen. Major disasters had been
             declared in the remaining states studied between 1953 and
             1964, but none had been declared in them from 1965 to 1980.

                 Flood insurance coverage in the study communities
             currently exceeds $578 million. Claims totaling $17.8
             million were paid in the study communities in the period
             January 1978 to November 1980. Sharp increases in the total
             number of policies and total flood insurance coverage were
             noted following Hurricanes Frederic and Allen.

                 Federal Policy Implications

                 Current federal programs support development, effectively
             leveraging private development money by shifting to the
             public sector portions of the costs of bridges, roads,
             causeways, water supply systems, wastewater treatment
             systems, shore protection, disaster relief, and flood
             insurance. Documented federal expenditures in three of the
             study areas represent an average subsidy of $25,570 per
             developed acre in actual dollars expended or obligated, and a
             total expenditure of more than $96.7 million for 3,784
             developed acres.  When restated as 1980 replacement costs,
             federal subsidies in the three areas averaged $53,250 per
             developed acre.

                 These figures are consistent with estimates made by
            .Sheaffer, Miller and Rozaklis in 1980 of the potential
             federal costs under current programs if the remaining
             undeveloped, unprotected barrier islands were to be
             developed-' Those estimates range from $25,800      $26,400 per
             acre, assuming low developed acreage, to $43,700      $46,700
             per acre, assuming high developed acreage. As modified by
             Miller to the August 1980 National Park Service inventory of
             undeveloped,.unprotected barrier island acreage, the
             estimated cost to the federal government of funding barrier
             island development under current programs could range from
             $2.46 - $6.05 billion over the next 20 years.

                 If the federal goal is to protect remaining barrier

             6
<pb n="12" />

            islands, policy should distinguish between the
            "noncontiguous" islands, i.e., those barrier islands not
            contiguous to developed areas and accessible principally by
            boat (about 138,100 acres) and "contiguous" barrier units,
            i.e., those barrier islands, barrier spits, and bay barriers
            immediately adjacent to developed areas and generally
            accessible by roads, bridges, and causeways (about 138,800
            acres).

                Protecting Noncontiguous Barrier Islands

                The noncontiguous islands present the greatest range of
            opportunity for protecting and preserving the barrier
            islands. The opportunity is greatest before development
            begins; enforcement of strong federal policies on issuance of
            bridge permits could effectively preclude intense development
            and protect the noncontiguous islands without public
            acquisition. Each subsequent stage of development diminishes
            the effectiveness of federal, state, and local regulations,
            and increases the federal financial assistance required to
            mitigate or "correct" adverse conditions.

                   A Federal protection policy would be enhanced by
                   continuing the historic federal position not to
                   participate in the initial costs of barrier island
                   access and other urban infrastructure.

                In almost all study areas, the initial costs of access
            and other urban infrastructure (e.g., water supply,
            utilities, wastewater treatment, etc.) were borne by private,
            local, or state interests, or some combination of this
            funding. Financing was achieved primarily through sale of
            local or state revenue bonds, land sales, or private
            investments. Federal involvement characteristically came at
            subsequent stages of development. Continuing federal
            nonparticipation in the initial costs of barrier island
            access and other urban infrastructure would enhance a
            protection policy.

                   The critical focal point for a federal protective
                   policy toward the remaining undeveloped, noncontiguous
                   barrier islands is road, bridge, and causeway access.

                Most barrier island development would not have taken
            place without bridge, causeway, and road access. A federal
            protective policy toward the remaining noncontiguous islands
            would logically seek to retain the islands in their natural
            condition, and prevent or inhibit development through a

                                                                        7
<pb n="13" />

           variety of actions before initial development. The key to
           barrier island development is access. Therefore, bridge
           permits play a pivotal role in the development of the barrier
           islands.

                  Development of most undeveloped, noncontiguous barrier
                  islands could be effectively regulated if
                  bridge/causeway permits were (1) denied or (2) granted
                  subject to enforced federal standards and without
                  federal subsidization.

               Federal regulatory authority over bridge permits is
           uniquely strong (by virtue of the navigation servitude under
           the Commerce Clause of the Constitution). Denial of a bridge
           permit would effectively preclude most extensive development
           of barrier islands.

               When bridge or causeway permits are approved, development
           can be limited by requiring compliance with federal standards
           and permit conditions, and prohibiting federal cost sharing
           of construction, improvements, repairs, or replacement,
           except under stringent exceptions. The capital costs of
           building bridge/causeway systems to federal standards
           currently range from $10 - $30 million per mile. Imposing
           such costs on the private sector would greatly affect the
           economics of barrier island development, making much of it
           economically infeasible. Bridges and causeways are the neck
           of the funnel leading to and from the barrier islands.
           Control of the neck of the funnel can effectively determine
           whether development takes place initially.

               Regulating Undeveloped, Contiguous Barrier Units

               Access and development cannot be so simply directed on
           contiguous barrier units. These barrier islands, barrier
           spits, and bay barriers, are by definition near existing
           roads and urban infrastructure. Estimates showed that
           "contiguous" barrier units are, on average, within 0.4 miles
           of existing road systems on both the Atlantic and Gulf of
           Mexico coasts.

                  For readily accessible barrier communities, federal
                  regulations are not designed to and will generally not
                  prevent or inhibit development in the long term, but
                  can reduce or mitigate some potentially adverse
                  consequences.
<pb n="14" />

                Regulation of barrier island development generally
            implies minimum standards for building practices and land
            uses. The added costs of these regulations cannot be
            expected to prevent development. They are not designed to do
            so. Moreover, in the case of flood insurance regulations,
            property owners and local governments can recover most or all
            of the costs of complying with elevation requirements through
            reduced flood insurance premiums and reduced average annual
            flood losses.

                Standards and regulations will not be adequate alone,
            however, to achieve the recently articulated federal goal "to
            achieve an abs9lute decline in communities' average annual
            flood losses."   Design of buildings to minimum standards can
            only reduce losses up to the design and safety limits of the
            structures. A storm that exceeds these design and safety
            limits can then produce catastrophic results. The chances
            for such a storm over a 50-year building life expectancy are
            relatively high (1-in-4 for a 200-year storm such as
            Hurricane Camille). Continued development, even to minimum
            standards, increases the potential for catastrophic loss in
            large, rare storms. Moreover, community losses from damage
            to roads, water systems, and other urban infrastructure can
            be expected from storms of considerably lesser magnitude,
            adding to potential disaster relief expenditures.

                   Removal of federal subsidies for developing contiguous
                   barrier units can be expected to inhibit but not
                   prevent development of those contiguous areas.

                Removal of federal subsidies for developing contiguous
            barrier units would shift significant portions of the costs
            from the federal to the state, local or private sectors.
            However, these communities are so near access and urban
            infrastructure that the capital costs of extending these
            services would in many instances be economically feasible.

                Removal of federal subsidies for access and other urban
            infrastructure on the undeveloped contiguous barrier units
            would reduce federal costs, but would not necessarily
            preclude development. Continued federal expenditures for
            increased disaster relief and flood insurance can be
            anticipated, unless federal disaster assistance and flood
            insurance programs are modified to further mitigate hazards.

                 Benefits of an Acquisition Policy

                   A federal protection policy will be strengthened by
<pb n="15" />

                    authority and appropriations to acquire both
                    undeveloped contiguous and noncontiguous barrier
                    islands. Public acquisition of the islands is cost
                    effective, and the surest means to protect barrier
                    islands from inappropriate development.

                Acquisition costs of the National Seashores included in
            this study ranged from $75.35 per acre at Cape Hatteras
            (1950-1954) to $4,950 per acre at Gulf Islands National
            Seashore (1970-1974). Using an average-purchase price of
            $5,000 per acre, recent estimates indicate that acquisition
            costs could be one-fifth or less of the costs to the federal
            government of continuing its current development programs on
            the undeveloped barrier islands.

                Even at costs of $5,000-$10,000 per acre for the upland
            portions of contiguous units, acquisition costs are estimated
            to range no higher than $275-$550 million, and for the
            noncontiguous islands $185 to $370 million. Total
            acquisition costs for all contiguous and noncontiguous
            undeveloped upland acreage on the barrier islands would range
            from $460 to $920 million. Developing the barrier islands
            under cur*rent federal programs is estimated to range between
            $2.46 billion and $6.05 billion, 2.5 to 5 times the
            acquisition costs. (See Table 14 of the report.)

                Under a public acquisition program, priorities can be
            divided generally between contiguous and noncontiguous
            barriers. In many, if not most, instances first priority
            should be given to purchase of undeveloped contiguous units,
            based on such objective factors as physical characteristics,
            resource values, and threats to those resource values
            (imminent development, pollution, loss of habitat, loss of
            open space, etc.).

                A public acquisition program on the noncontiguous islands
            would not be required, if the federal government chooses to
            adopt a more stringent bridge permit program than is now in
            force, and if such regulations withstood inevitable judicial
            challenge, extensive development of the undeveloped
            noncontiguous barrier island would be effectively precluded
            and acquisition could be directed to contiguous barrier
            islands.

                As with any form of regulation, public acquisition before
            development takes place would be the most cost effective
            action. At each incremental stage of access and urban
            infrastructure development, adjacent land values will

           10
<pb n="16" />

            increase. The Government would get the most for its money
            before such development takes place.

                If the history of National Seashore acquisition and the
            increase of coastal land values is any precedent, costs in
            the range of $5,000-$10,000 per acre will be deemed sound and
            inexpensive investments not even 10 years from now; not only
            would they be inexpensive, but they would also be "repaid" in
            reduced or avoided federal subsidies and disaster relief
            expenditures.

                An acquisition program would effectively avoid or reduce
            costs to repair, improve, enlarge, upgrade, reconstruct, or
            replace bridges, roads, causeways, water supply systems,
            wastewater treatment systems, flood and erosion control
            structures, or to provide disaster assistance and to
            subsidize flood insurance for the areas acquired.

                Where development in adjacent communities has not reached
            or is not approaching saturation, federal acquisition of
            noncontiguous barrier islands would have no measurable effect
            on land values in those communities. other factors,
            especially improved urban infrastructure, will have a more
            immediate effect on adjacent community land values than
            public acquisition of the noncontiguous islands.

                Undeveloped, contiguous tracts will reflect market values
            of developed lands nearby. In one instance cited, the asking
            price for one parcel of land included in the National Park
            Service inventory of undeveloped barrier units is nearly six
            times the average estimated present value of remaining
            undeveloped noncontiguous islands. The smaller the acreage
            involved, the greater the likelihood of high cost per acre.
            Nevertheless, viewed as a totality, the average acquisition
            costs per acre for "bulk" land purchases of uplands,
            wetlands, and interior waters is expected to fall in the
            range of $5,000-$10,000 per acre.

                   To the extent that adjacent areas are totally or
                   significantly developed, public acquisition of
                   undeveloped, contiguous parcels would be expected to
                   increase the value of adjacent lands.

                Removal of lands from the marketplace near communities
            that are highly developed was shown in at least one instance
            in the study to have increased property values in that
            community. Both the perception and the fact of reduced
            supply of land will increase the value of the remaining lands
<pb n="17" />

           outside the publically-acquired property where development
           has reached or approaches saturation.

           Conclusion

               "Protection" measures such as regulations and removal of
           federal subsidies for access and urban infrastructure may
           forestall some barrier island development but generally will
           not prevent development. Among all regulations only a
           strengthened bridge permit program, coupled with removal of
           federal bridge construction funds, is likely to protect
           barrier islands from development, and then only with respect
           to noncontiguous islands. Regulations on access, urban
           infrastructure, and building requirements, and removal of
           federal subsidies are important short-term measures; but
           their limitations as means to protect barrier islands need to
           be recognized.

               If protection of the undeveloped barrier islands is to be
           a federal goal and is to be effectively achieved, a program
           of regulation, removal of federal subsidies for development,
           and public acquisition would need to be authorized and funds
           appropriated for that purpose. Such a combined program is
           the only effective way to protect the islands, and, through
           acquisition, the only fair way to compensate individual
           barrier island property owners for taking their right to
           develop the islands. of all the available measures, the
           surest means to protect the undeveloped barrier islands is
           public acquisition.

          12
<pb n="18" />

                                        INTRODUCTION

                The barrier islands are the first line of storm defense
            for a thousand miles along the Atlantic and Gulf coasts.
            Development on them is a gamble between time and nature, as
            evidenced in recent years by Hurricanes Frederic, Camille,
            and Allen. Yet people continue to be drawn to their sunny
            beaches and to risk building on the islands.

                Development on barrier islands has been growing at a rate
            greater than 6,000 acres per year. That rate, if applied to
            the remaining barrier islands, could consume the developable
            upland portions of those islands by the year 1995, just 15
            years from now. By 1980 an estimated 280,000 acres had been
            developed.

                In recent decades the federal government has acquired
            several barrier islands and established them as national
            seashores. The report explores the impact of such public
            land acquisition on adjacent barrier islands and mainland
            communities.

            Purposes of the Study

                This study was undertaken as part of the consideration of
            alternative fedeial policies for protecting the nation's
            barrier islands.     This report describes and analyzes the
            developmental history and recent trends affecting economic
            and environmental conditions in four case study areas of the
            southeast Atlantic and the Gulf of Mexico coasts adjacent to
            or near national seashores:

            State              National Seashore       Counties, Communities

            North Carolina     Cape Hatteras (1938)    Dare County; Nags
                                                       Head; Kill Devil Hills

            Georgia            Cumberland Island       Camden County; St.
                               (1972)                  Marys; Glynn County;
                                                       St. Simons Island; Sea
                                                       Island

            Florida,           Gulf Islands (1971)     Dauphin Island, AL;
            Alabama,                                   Pensacola Beach, FL
            Mississippi

            Texas              Padre Island (1962)     Cameron County; South
                                                       Padre Island

                                                                               13
<pb n="19" />

                 There are approximately 1.4 million acres of uplands,
             wetlands, and interior waters included in the federal
             inventory of barrier structures on the Atlantic and Gulf of
             Mexico coasts. An estimated 885,000 acres (more than 60
             percent) are in public ownership, owned by federal, state,
             and local governments and protected from development. Nearly
             280,000 acres have been developed, about 190,000 within the
             last 30 years. Somewhat less than 280,000 acres are
             undeveloped, in private ownership, and potentially subject to
             development. See Table 1.

                 Nearly 95 percent of the undeveloped, unprotected barrier
             acreage is found from Virginia south along the Atlantic coast
             and along the Gulf coast. More than 40 percent of that
             acreage is in Texas; another 43 percent is in North Carolina,
             South Carolina, Georgia, and Florida. Hence, the areas
             selected for case studies are both representative of and
             dispersed throughout the geographic area with the greatest
             remaining undeveloped, unprotected barrier island acreage.
             The case study method was used to document developmental
             history within each study area and to discern recent trends
             affecting those areas.

                 One purpose of the study was to assess the impact of
             federal land acquisition on land values in communities
             adjacent to but outside the boundaries of national seashores.
             Concern had been expressed that as the supply of land
             available for development is diminished by federal land
             acquisition, and demand for land remains steady or increases,
             the effect of federal land acquisition will be to increase
             the price of remaining land sharply. The study tested that
             concern.

                 A second major purpose of the study was to document
             federal involvement in development, expansion, and
             redevelopment of the study communities. The economic
             feasibility of barrier island development is influenced by a
             number of factors, including access to the islands, urban
             infrastructure to support development, and -- ultimately
             shore protection measures to counteract the effects of rising
             sea level, currents, winds, waves, storms, and erosion.

                 Extensive barrier island development cannot take place
             without access, water, and other urban infrastructure to
             support that development. Access and urban infrastructure
             are broad areas in which current federal programs can provide
             substantial direct subsidies to foster development. The
             study documented the sources and costs for such basic factors

            14
<pb n="20" />

             Table 1.   Undeveloped, Unprotected Barrier Island Acreage on the Atlantic
             and Gulf of Mexico Coasts (September 1980).

                                         Contiguous Units 1 Noncontiguous Uni s  2
                                                          3 -
                                         Uplands Wetlands   Uplands      Wetlands       State
             State                       (Acres) (Acres)    (Acres)       (Acres)       Total

             Maine                          702        136          0           0         838
             Massachusetts                3,226      1,447      1,276       1,027       6,976
             Rhode Island                   777        432          70          0       1,279
             Connecticut                      72       203          22          29        326
             New York                     1,327        535          0           0       1,862
             New Jersey                        60      290          0           0         350
             Delaware                       156        200          0           0         356
             Virginia                           0         0     1,786       6,58T       8,373
             North Carolina               2,608      5,065      1.939      12,235     21,847
             South Carolina               6,288      8,915      4,293      21,064     40,560
             Georgia                            0         0     5,706      23,084     28,790
             Florida                     14,176      8,174      1,040       3,176     26,566
             Alabama                        465      1,162          0           0       1,627
             Mississippi                        0         0     1,970       1,325       3,295
             Louisiana                      860      4,972      4,151      11,744     21,727
             Texas                       24,797      51,770     15,459     20,088     112,114
             September 1980 Totals       55,514      83,301     37,712     100,359    _@_76,'W%
             1  "Contiguous Units"   are those undeveloped,   unprotected barrier struc-
             2  tures contiguous to partially or totally developed areas.
                "Noncontiguous Units" are totally undeveloped, unprotected barrier
                islands not contiguous to partially or totally developed areas, and
             3  generally only accessible by boat.
                Wetland acreages include interior waters.

             Source: Sheaffer &amp; Roland, Inc., using:
                   Summary of the Undeveloped and Unprotected Natural Areas on Barrier
                   Islands Along the Atlantic and Gulf Coasts-U.S.Department of the
                   Interior, National Park Service (Washington, D.C., April 1980).
                   Table 1, Barrier structures and parts of structures listed in April
                   1980 National Park Service inventory that have been determined to be
                   protected by existing owners and deleted (revised to Sept. 9, 1980).
                   Table 2, Other barrier structures or parts of barrier structures
                   deleted from April 1980 National Park Service inventory (revised to
                   Sept. 9, 1980).
                   Table 3, Barrier structures determined to qualify for addition to the
                   inventory of undeveloped and unprotected barrier structures (revised
                   to Sept. 9, 1980).

                                                                                            15
<pb n="21" />

            as:

                     access: bridges, causeways, roads, and airports;
                     water supply and distribution;
                     wastewater collection and treatment; and
                     protection against flood losses.

                Each of these categories was assessed separately.
            Private, local, state, and federal sources of financing were
            documented where available. Specific development factors
            were assessed over time by examining building permits,
            traffic counts, and property transfers and sales. The
            influence of federal acquisition of the national seashores
            was measured and evaluated by means of time series analysis.
            Effects of federal subsidies on land use and value, and on
            pressures to develop the communities were also assessed by
            examining changes over time.

                In each case study external factors were evaluated to
            assess their impacts. These external factors included

                -    military and naval bases
                -    adjoining public holdings other than national
                     seashores
                -    tourist facilities and attractions
                -    significant nearby development, e.g., major
                metropolitan areas, and
                     offshore oil and gas exploration and exploitation.

            To the extent identifiable, the impact of external factors
            were compared with the impact of the national seashores on
            development in the adjacent communities.

            Data Collection and Evaluation

                Each case study focused on the national seashore itself
            and on private development nearby on the same barrier island,
            on separate but adjacent barrier islands, or on the mainland.
            Each was studied separately to determine its developmental
            history and trends in land use and land value. Available
            planning and other documents were reviewed; locally
            influential and knowledgeable individuals were interviewed;
            and primary data relating to building permits, property
            sales' and property transfers were collected and analyzed.
            The urban infrastructure in each case study area was
            evaluated and, where possible, the costs of building the
            infrastructure were collected and analyzed.

           16
<pb n="22" />

                              SYNOPSIS OF CASE STUDIES

               Although the developmental history of each study
           community was unique, some characteristics are typical not
           only of other study areas but also of other barrier units
           along the Atlantic and Gulf coasts. For example, Cumberland
           Island and the Mississippi islands of the Gulf Islands
           National Seashore have little or no development on them and
           no road access from the mainland. They share these
           characteristics with more than 50 undeveloped, privately
           owned barrier islands comprising about 138,000 acres that are
           not contiguous to developed areas and are currently
           inaccessible by road, bridge, or causeway. The Cape
           Hatteras, Padre Island, and Florida portions of the Gulf
           Islands National Seashores are accessible by road and
           contiguous to developed and developing areas. They share
           these general characteristics with approximately 80
           undeveloped, unprotected barrier units comprising about
           139,000 acres. Thus, the four national seashores included in
           the study are broadly representative of the remaining
           undeveloped, unprotected barrier structures of the Atlantic
           and Gulf coasts.

               This synopsis focuses on a number of the common
           characteristics of the study areas related to land values,
           access, urban infrastructurer and external factors affecting
           development. Each finding is discussed and supported by the
           data collected, interviews held, and analyses made during the
           field work for the study.

               Trends in Land Value

                  Increases in real estate values in communities
                  adjacent to the four national seashores and directly
                  attributable to federal land acquisition were not
                  immediately measurable in communities that had not
                  reached or approached full development.

               In all of the study areas except Pensacola Beach,
           Florida, percentages of development and rates of growth were
           low at the time of acquisition of the adjacent national
           seashore. Estimated percentages of development at the time
           of seashore acquisition were:

                                                                        X7
<pb n="23" />

                                                  Seashore
                                                Acquisition        Percent
                 Community                        Period          Developed
                 Nags Head, NC                  (1953-1959)     Less than  15%
                 Kill Devil Hills, NC           (1953-1959)     Less than  15%
                 South Padre Island, TX            (1966)       Less than  5%
                 St. Marys, GA                  (1974-1979)     Less than  25%
                 Dauphin Island, AL             (1972-1979)     Less than  10%
                 Pensacola Beach, FL            (1972-1979)     About 75%

            Source: Sheaffer &amp; Roland, Inc. estimates from planning and
                      building permit data.

                 Except in Pensacola Beach, development was not proceeding
            vigorously in the study areas when the national seashores
            were acquired. The supply of land available for residential
            and commercial development in the study communities exceeded
            the demand for such land during the Seashore acquisition
            period. Hence, acquisition of the Seashores was generally
            not perceived as putting pressure on development in the
            adjacent communities or on acquisition of scarce land
            resources.

                 Table 2 compares oceanfront land sales in several of the
            communities adjacent to the four National Seashores with the
            purchase and condemnation/taking costs of the four Seashores.
            Readers should note that the land sale data are derived from
            actual sales, but do not necessarily represent extreme highs
            and lows for each given five-year period. Also community
            land sales are based on sales of subdivided, platted lots.
            Such sales are many times more expensive per acre than "bulk"
            land sales characteristic of many Seashore acquisitions.
            Finally, the community land sales shown are the most
            expensive land in each community studies, i.e., oceanfront
            land. Depending on the community, interior lot costs ranged
            from one-third to one-tenth the cost of ocean front lots in
            the study communities. Nevertheless, the data suggest
            several conclusions that were corroborated in the study
            team's interviews.

                 The community property sales data suggest no immediate,
            unusual increase in property values that are directly
            attributable to the Seashore acquisition and not explicable
            by external factors. Some modest increase is noticeable in
            the Nags Head - Kill Devil Hills area, but the acquisition
            period also corresponded with an extensive tourism promotion
            program by the Outer Banks Tourist Bureau. Increased

           18
<pb n="24" />

                                         Table 2. Oceanfront land Sates In Study COMMuniLlea - Costs Per Acre.

                                                       KI  It   11 Hills,    St. St-Z.- -1--mophin                  South Padre          th t: I ona IPurchase     Taking Condemnation
                                         Ile r I od        M g@ I e a d        Sea Island          Island            Island              Seashore Av. Cost/Acre     (Av. Cost/Acre)

                                         1940-44  $    870-$   2,600              NA                 NA                  NA

                                         1945-49  $    870--$  2,600              NA                 NA                  NA

                                         1950-54  $    900-$   2,600              NA                 NA             $  4,400-$   4,800   Cape Hatteras    $75.35          $268.39

                                         1955-59  $   2.600-$  12.200             NA         s 21,800-$ 24,000           NA

                                         1960-64  $   6,500-s  19,200             NA                 NA             $ 2t.300-$ 22,200

                                         1965-69  $  11,300-$  27,400             NA                 NA             $ 12,600-$ 22,700    Padre Island          --         $618.70
                                         1970-74  $  30,5001                $207,550         $ 62,700-s 64,500      $  7,000-$ 78,000    Culf Islands $4,949.04         $39.593 (2.21 Acres)

                                         1975-79  $174,200-$283,100    $398,100-$430,400     $ 54,400-$292,300           NA              Cumberland 1. $3,327.30        $21,316 (102.12 Acres)

                                         1980     $203,400-$464,800               NA         $ 13,900-$204,300      $202,100-$332,800

                                         1Oita Include only one transaction.
                                         ------------------------------------------------------------------------------------------------------------------------------------------------
                                         Source:  SIteaffer &amp; Roland, Inc. using:   Property Sales Ilata; Department or the Interior, National Park Service, Division of land Acquisition,
                                                  Mister Deed Listing, status as of Feb. 29, 1980.
<pb n="25" />

             visitations tended to coincide with increased building permit
             activity in some of the study communities.

                The St. Simons - Sea Island and Dauphin Island data
             suggest that land values were influenced by factors
             independent of the Seashore acquisitions. St. Simons and Sea
             Island, located more than 50 miles north of St. Marys,
             Georgia (the mainland community closest to Cumberland Island)
             suggest acquisition of Cumberland Island had no measurable
             impact on land values on St. Simons and Sea Island. Land
             values on Dauphin Island also have been influenced by
             external factors. A moratorium on septic systems that has
             been in effect since 1976 has had a strong impact,
             particularly on development and land values on the west end
             of the island. Development difficulties were exacerbated in
             1979, when Hurricane Frederic "blew out" the bridge/causeway
             to the island.

                South Padre Island data show a depression in land values
             during the period that the Padre Island National Seashore was
             being acquired. Davenport has suggested a cause:effect
             relationship between tge acquisition and the depressed land
             values in that period.   Before acquisition of the Seashore,
             a coastal highway was proposed to connect Corpus Christi and
             South Padre Island, running the length of Padre Island. When
             the Seashore was authorized and acquired, the coastal highway
             proposal became inoperative. According to Davenport's
             sources, land values in South Padre Island that were inflated
             by speculation that the highway would be built were deflated
             when the Seashore was acquired.

                However, another factor--the high salinity of the water
             supply from the mainland--may also have had a depressing
             effect on land values at South Padre Island. Many realtors
             cited this salinity (1,100 parts per million of total
             dissolved solids, including 850 - 900 ppm of salt) as a
             .deterrent to further development. Both factors coincided
             with Seashore acquisition and could have had a combined
             depressing effect on land values.

                The water problem was mitigated in 1966 when the water
             district serving South Padre Island found a new nonstagnant
             source of water and installed underground transmission mains
             from the source to the treatment plant. However, further
             development is now hampered by the limited availability and
             high costs of obtaining additional water rights.

                    Impacts on land values in adjacent communities from
                    the withdrawal of federal lands from the marketplace

           20
<pb n="26" />

                  may be delayed tens or scores of years after seashore
                  acquisition, depending on the rate at which adjacent
                  communities grow.

               Study data suggest that measurable effects of federal
           land acquisition on adjacent lands are not felt until the
           adjacent areas reach or approach full development. It may
           take decades for development in the adjacent communities to
           reach that point.

               As late as 1972, nearly 20 years after acquisition of the
           Cape Hatteras National Seashore began, land use maps of Nags
           Head and Kill Devil Hills, North Carolina, showed that only
           the oceanfront had been extensively developed. Interior lots
           and lots bordering Roanoke Sound were virtually undeveloped.
           However, by 1980, Kill Devil Hills was 90-95 percent
           developed and Nags Head was 50 percent developed. Sharp
           increases in land values were being experienced as land
           development approached saturation, and new development was
           being directed to the north of these communities.

               Measurable effects on land values adjacent to Cumberland
           Island may not be felt for 50 years, according to an official
           of the Sea Island Company, developers of Sea Island and St.
           Simons Island, Georgia. Cumberland is adjacent to rural
           Camden County where the dominant land use is pine forests to
           support the local paper industries. Should the demand
           develop, there are ample lands to meet the needs for any
           foreseeable development of the area immediately adjacent to
           Cumberland Island on the mainland over the next 25 - 50
           years, with no measurable effect on local land values
           attributable to federal acquisition of Cumberland Island.
           The same official of Sea Island Company thought that the
           principal effects of the Cumberland Island National Seashore
           may be aesthetic, the appreciation of a barrier island in its
           natural state contrasted to nearby developed areas.

                  External factors (road access, urban infrastructure
                  and utilities, septic system moratoria, and naval
                  bases) had a more immediate and measurable impact on
                  land values in adjacent communities than did
                  acquisition of the national seashores.

               The critical role of road access to the barrier islands
           in the development of those islands was borne out repeatedly.
           -- on the Outer Banks, at St. Simons Island and Sea Island,
           at Pensacola Beach and Dauphin Island, and at South Padre
<pb n="27" />

             Island. Without road, bridge, or causeway access to the
             islands, extensive recreational, tourist, and permanent
             development did not occur. The communities on the Outer
             Banks and on Dauphin Island were largely fishing villages,
             accessible only by boat or ferry, before bridges and roads
             were built.

                  Dramatic evidence of the effect of inaccessibility and
             land use regulations was found on Dauphin Island. Table 2
             shows the decrease in land values, particularly on the west
             end of Dauphin Island, after the imposition of a septic tank
             moratorium in 1976. Building permit data show a sharp
             decrease in new building starts in 1977, and reduced levels
             thereafter. Interviews revealed that new buildings are
             either using holding tanks or remain unconnected, awaiting
             removal of the septic tank ban. As a result of the
             moratorium and the destruction of the Dauphin Island Bridge
             by Hurricane Frederic, some land values are depressed below
             levels at which the land was first offered in 1955.

                  In St. Marys, Georgia, on the mainland opposite
             Cumberland Island, development of the Kings Bay Fleet
             Ballistic Missile Submarine Support Base has dominated the
             socioeconomics of the area since July 1, 1978, when the Navy
             took possession of the Military Ocean Terminal from the Army.
             Designation of the base as an Atlantic Coast Strategic
             Submarine Base for one TRIDENT squadron is already having
             profound impacts in the county, as noted in the Environmental
             Impact Statement for the base:

                  "Camden County has become a center of military employment
                           The region's military population has grown by
                  ;,2*66* 'persons (including spouses and dependents) since
                  the arrival of the Navy's submarine tender at Kings
                  Bay . . . .

                  n
                   . . . The arrival of military personnel on July 2, 1979,
                  increased the county's 1979 population by 12 percent.
                  This growth, coupled with growth of the county's two
                  largest industrial employers (Union Carbide and Gilman
                  Paper), has resulted in some housing shortages, increased
                  competition for qualified employees, and increased
                  traffic.

                  "Real estate values in Camden County communities have
                  registered substantial price appreciation in the last two
                  or three years. Homes that sold for $18,000 in 1976 are
                  now selling for approximately $30,000; raw land near
                  development areas has posted sharper price appreciation

             22
<pb n="28" />

                 than homes.      ,6

             With an estimated influx of more than 20,000 people
             associated with the Kings Bay Support Base by the year 2000,
             the overwhelming impacts on land values in St. Marys and in
             Camden County are and will be attributable to the Kings Bay
             operation for the foreseeable future.

                    In adjacent communities approaching full development,
                    impacts of federal acquisition on land values can be
                    identified and measured.

                 Pensacola Beach, Florida, is the only study community
             that experienced immediate, measurable increases in real
             estate values after nearby land was acquired for a national
             seashore. The City of Pensacola Beach is on Santa Rosa
             Island. The entire island was once federal property
             administered by the Department of the Interior, but large
             portions were transferred to Escambia County, Florida, during
             the Truman Administration. The County set aside a portion of
             the island for development as Pensacola Beach, and created
             the county-run Santa Rosa Island Authority to administer the
             town. It was bounded on the west by Fort Pickens Park and on
             the east by an 8-mile county park. Development began in the
             late 1940s after the county built a bridge and water main to
             the mainland. -Under the Santa Rosa Island Authority, land in
             Pensacola Beach was made available solely by long-term,
             99-year leases for development.

                 When the Gulf Islands National Seashore was established,
             Fort Pickens State Park was donated by the State to become a
             part of the Seashore. This had no apparent effect on lease
             values in Pensacola Beach, although the town was about 75
             percent developed. However, the study team was told that
             @hen a 7.5-mile stretch of beach east of Pensacola Beach was
             incorporated into the National Seashore, leases in Pensacola
             Beach immediately increased in price. The study team could
             not quantify the increases, for lack of data.
                 Although tfie creation of Cape Hatteras had no measurable
             impact on land values in Nags Head and Kill Devil Hills for
             almost 20 years, there now is the prospect of immediate,
             measurable land value increases in these communities.
             Situated in the middle of Nags Head is a 411-acre undeveloped
             tract that extends from the Atlantic Ocean to Roanoke sound.
             Still owned by the family that purchased the land in the late
             1930's reputedly for $4,000 (less than $10.00 per acre), the

                                                                         23
<pb n="29" />

            entire tract is now offered for sale for $12,000,000, or
            $29,200 per acre. The tract is included in the Department of
            the Interior's inventory of undeveloped, unprotected barrier
            units. Several realtors and local officials were questioned
            about the potential impact on local land values if the
            federal government were to acquire the tract. All were
            unanimous in their opinion that such an acquisition would
            immediately increase land prices in all nearby communities,
            because the tract is the last large parcel of undeveloped
            oceanfronting land for 25 - 30 miles outside the National
            Seashore. This prospect is consistent with our finding
            inasmuch as Kill Devil Hills is now estimated to be 90 - 95
            percent developed and Nags Head about 50 percent developed.
            The tract represents a substantial portion of the undeveloped
            land in Nags Head.

                Access

                  Development on adjacent barrier islands was
                  nonexistent or negligible until vehicular access by
                  road, causeway, or bridge was available.

               Uniformly throughout the study communities no extensive
            development occurred until road, bridge, or causeway access
            was provided from the mainland. A corollary was that where
            no such access existed there was no extensive development,
            c.f., Cumberland Island and the Mississippi islands of the
            Gulf Islands National Seashore.

               in each area, road access was perceived by local
            officials or developers as the first basic requirement for
            attracting development. And where roads, bridges or
            causeways were built, local officials and developers were
            invariably responsible for initiating the process. Thus,
            Dare County officials and private investors interested in
            developing the Dare County beaches initiated measures for
            bridges across Roanoke and Currituck Sounds in North
            Carolina. This in turn brought pressure on the State of
            North Carolina to fund and build Route 158 connecting the two
            bridges. The original causeway/bridge complex to St. Simons
            Island was funded by City of Brunswick revenue bonds (1924),
            and the first 22 miles of roads on St. Simons were
            constructed by the Sea Island Company and donated to Glynn
            County. At Pensacola Beach the first bridge was built in
            1931 with private funds to provide access solely to a casino;.
            the bridge that immediately preceded efforts to develop
            Pensacola Beach was funded in 1948 with Escambia County
            revenue bonds. Railroad access to Dauphin Island was

           24
<pb n="30" />

           apparently attempted in 1866, but failed; through the
           combined efforts of the Mobile Area Chamber of Commerce,
           Mobile County, and the State of Alabama, the first bridge to
           Dauphin Island was completed in 1955. Finally, the first
           causeway to South Padre Island was financed by Cameron County
           bonds and completed in 1954.

               In no instance were the barrier island communities as
           much as 5 percent developed when the first bridge, road, or
           causeway was built. In the principal study areas there had
           been no demand for exclusive developmentf inaccessible except
           to those with boats. The study areas did not include Jekyll
           Island, Georgia, where such demand did arise. A barrier
           island sandwiched between St. Simons Island on the north and
           Cumberland Island on the south, Jekyll became the most
           exclusive resort in the nation in the late 19th Century. It
           was selected by a team of health experts and developed
           privately as a winter resort offering complete privacy,
           beauty, and a fair climate. The Jekyll Island Club operated
           for about 56 years. The island was purchased by the State of
           Georgia in 1947, and operated as a resort area (accessible by
           causeway) by the Jekyll Island Authority.

               Elsewhere all development on the barrier islands was
           dependent upon vehicular access. For those islands no
           extensive development would, or could, occur without
           vehicular access.

                  Convenient access per se did not lead immediately in
                  every case to extensive development in the adjacent
                  communities.

               A chronology of vehicular access to the study communities
           is presented in Table 3. There were some instances where
           access was followed immediately by development, e.g., St.
           Simons Island, Sea Island, Pensacola Beach, and Dauphin
           Island. But at Nags Head and Kill Devil Hills, the Great
           Depression and World War II intervened before development
           began in earnest in the 1950s, some 20 years after access
           opened the area to potential development. Similarly, more
           than 15 years passed before the first substantial development
           began on South Padre Island.

               In all of the study communities the early years of
           development were sluggish. At Pensacola Beach, leases were
           offered at $5.00 per year as an incentive to attract people
           to develop on the island. At that price, the Santa Rosa
           Island Authority was hard pressed to find takers. At Dauphin

                                                                      25
<pb n="31" />

             0)     Table 3. Chronology of Vehicular Access to Study Communitlest Funding Sources, and Periods of Principal Development.

                                                    First Bridge/                       First                             Bridge/Causeway                        Principal
                                                      Causeway       Funding            Paved      Funding                  Improvements         Funding       Development
                    Location                            Year         Source---          Roads      Source                       Repairs         Source            Per io.d

                    North Carolina
                          Roanoke Sound Bridge          1928        Dare County                                                 1950                NA     Nags Head/Kill
                                                                    Bonds IToll)                                                                           Devil Hills
                                                                                                                                                           1950-Present
                          Wright Memorial               1930        Privately                                                   1967           Federal/
                          Bridge (Currituck Sound)                  Financed (Toll)                                                            State

                          Route 1511 (Kitty Hawk)                        ---            1931       State of                 Route 158          Federal/
                          to Nags Head)                                                            North Carolina         Bypass - 1959        State

                          Bonner Bridge                 1964        Federal/                                                    1980           State
                          (Oregon Inlet)                            State

                    !i@_Or 9 'a
                          Brunswick-St. Simons          1924        City of Bruns-      1924       Private-Donated         1981 (Est.)         Federal/      St. Simons 1.
                          Causeway Bridge                           wick Bonds                     to Glynn County                             Local         1940-Present;
                                                                    (Toll)                                                                                   Sea island
                                                                                                                                                             1926-Present

                    Florida
                          Oulf Breeze-Pensacola         1931        Private             1948       Escambla                     1948           Escambia      Pensacola
                          Beach Bridge Causeway                     (Casino)                       County                                      Co. Bonds     Beach
                                                                                                                                1974           St. Rev.      1948-Present
                                                                                                                                               Bonds

                    Alabama
                          Dauphin island Bridge         1955        Mobile County      1956-57     State of                     1960           Federal       Dauphin
                                                                    Bonds; State                   Alabama                                     (100%)        island
                                                                    (Toll)                                                                                   1956-Present

                    Texas
                          South Padre island -          1954        Cameron             1954       Cameron                      1974           Federal       South Padre
                          Queen Isabella Causeway                   County Bonds                   County                                      State         island -
                                                                    (Toll)                                                                                   1971-Present

                    Source: Sheaffer 1. Roland, Inc. - Case Studies.
<pb n="32" />

          Island, the Mobile Area Chamber of Commerce generated great
          interest in the properties on the island and 2000 lots sold
          within three days of the initial offering. But fewer than
          200 houses had been built by the 1960s.

              Then, for reasons not fully known, all of the study
          communities associated with resort development experienced a
          surge of interest and growth in the late 1960s and early
          1970s. The growth coincided with the early acquisitions of
          land for Cumberland Island and the Gulf Islands National
          Seashore, but was clearly unrelated to those events, and was
          at least regional if not national in scope. A growing
          awareness of the coast as a desirable place for recreation
          and development, greater levels of disposable income, and
          more leisure time than before, all appear to have been
          contributing factors. Whatever the causes, it was striking
          that all of the resort areas studied, so geographically
          dispersed, experienced active growth at roughly the same
          time. Although the active development also coincided with
          enactment of the National Flood Insurance Act, the study
          found that communities were growing before many of them
          entered the National Flood Insurance Program. This suggests
          that the availability of flood insurance was not a
          significant contributing factor at the outset.

                 Where no road access exists to the national seashore,
                 development in adjacent communities (whether on the
                 mainland or on adjacent barrier islands) has not been
                 measurably affected by federal acquisition of the
                 national seashore, c.f., Cumberland Island, Georgia,
                 and Gulf Islands (Mississippi islands).

              Cumberland Island was unique in many respects. Until
          acquired for the Seashore, much of the island had been held
          in trust for descendants of Thomas Carnegie, brother of
          Andrew Carnegie. The island had been deliberately kept
          undeveloped and secluded, and any disposition of the island
          was with the desire that it be kept in that condition. Lack
          of bridge and causeway access effectively reinforced the
          beneficiaries' privacy. Its continued isolation as a
          national seashore has resulted in no discernible impact on
          development in nearby communities.

              The Mississippi islands now comprising part of the Gulf
          Islands National Seashore are even farther from the mainland
          than Cumberland Island is. The lack of any bridge or
          causeway access was clearly a contributing factor to the
          nondevelopment of these remote islands. But a knowledge,

                                                                     27
<pb n="33" />

            experience, respect, and fear of hurricanes may have been an
            even greater deterrent. Complete and violent inundation
            during Hurricane Camille in 1969, severe erosion and
            overwash, and virtually total destruction of all structures
            on the islands including a former coastal fort, set the stage
            for their inclusion in the Seashore little more than two
            years later.

                The study team consulted the appraisers who appraised
            Cumberland Island and the Mississippi islands for the
            National Park Service, and who were intimately familiar with
            land values both on the islands and on the mainland. Both
            stated unequivocally that sale of the islands to the federal
            government had no measurable impact on the market on the
            mainland. Factors cited by Roy Gordon, MAI, of Savannah,
            regarding Cumberland Island included "remoteness,"
            "isolation," "inaccessibility," and the fact that it was
            "held in trust for the descendants of Thomas Carnegie." J.
            Ed Turner, MAI, of Mississippi, cited distance,
            inaccessibility except by boat, and the vigor of the
            economies in the adjacent mainland communities as factors.

                   Where road access exists to the adjacent community
                   independent of road access to the national seashore,
                   development and land values in the adjacent community
                   are not measurably affected by the Seashore
                   acquisition, c.f., Dauphin Island, South Padre Island.

               Dauphin  Island was selected for case study in part
            because, as the next island east of the Mississippi islands
            of the Gulf Islands National Seashore, its development and
            land values are hypothetically affected by the federal
            acquisition. However, development on Dauphin antedates
            acquisition of the Seashore, and its dynamics are wholly
            independent of the Seashore. Distance from the islands is an
            apparent factor in that independence. Bridge access is
            acknowledged as the single most important element affecting
            potential development on Dauphin. A suit by the Sierra Club
            and the Natural Resources Defense Council unsuccessfully
            challenled proposed federal funding of the Dauphin Island
            bridge.   If the challenge had been successful, development
            on Dauphin would have been sharply curtailed and land values
            would have continued to be depressed. This impact would have
            been independent of any effect of federal acquisition of the
            Seashore.

               Principal access to the Padre Island National Seashore is
            on the north end of the island. No paved road extends the
            length of the island and most Seashore activity is focused on

          28
<pb n="34" />

           the north end. While South Padre Island lies immediately to
           the south of Padre Island, the two are separated by Mansfield
           Cut, a ship channel which is unbridged. The northern 29
           miles of South Padre Island are undeveloped and without paved
           roads as of 1980, and as effectively cut off from Padre
           Island as Dauphin is from the Gulf Islands.

              As with Dauphin Island, development on South Padre Island
           is dependent on causeway access (Queen Isabella Causeway).
           Development in the 1960s was apparently slowed by local
           perception of the poor quality (high salinity) of potable
           water available in South Padre Island. Today, limited
           availability and cost of water rights are prime deterring
           factors to development of the north end of the island. These
           factors are overwhelmingly determinant, not federal
           acquisition of the Seashore.

                 In all instances studied initial development of road,
                 bridge, or causeway systems to adjacent communities
                 was financed by private, local, and state interests.
                 Federal participation in the costs of road, bridge, or
                 causeway access, came after private, local, and state
                 commitments and included:

                      - Improvements and expansion of existing systems
                      - Replacement of storm-damaged systems

              Although the initial development of access was
           consistently initiated by local governments and developers,
           there has been substantial federal involvement in funding
           expansion and improvements of existing access. Examples
           include: Wright Memorial Bridge across Currituck Sound,
           Route 158 Bypass through Kill Devil Hills and Nags Head, and
           Queen Isabella Causeway to South Padre Island as well as the
           proposal to replace the storm-damaged bridge to Dauphin
           Island. In addition, the apparently forthcoming expansion of
           the Torras Causeway to St. Simons Island will use federal
           Bridge Restoration Funds.

              The federal role is explicable historically both in terms
           of federal strategy and programs. In the cases of the outer
           Banks, St. Simons Island, and Sea Island, development began
           before major federal highway programs were authorized by the
           Congress. The Federal Aid Highway program is a post-World
           War II phenomenon. Secondly, federal policy requires state
           and local initiatives on secondary road systems such as those
           in the study communities. Hence, as a policy matter federal
           highway funding would not have been expected in the initial

                                                                      29
<pb n="35" />

            development of the barrier islands.

                Cost information on bridge, road, and causeway systems in
            the study communities was collected to the extent available
            from local, state, and federal officials. Those data are
            displayed in Table 4.

                Recent bridge data show sharp increases that not only
            reflect inflated costs of construction in the 1970s and in
            1980, but also different causeway and bridge design. The
            first bridges across Roanoke Sound and Currituck Sound, and
            to Pensacola Beach, were wooden. The bridge to Dauphin
            island was reinforced concrete with a lift span at the
            Intracoastal Waterway. The causeways to St. Simons Island
            and to Sea Island are earth berm construction, with a lift
            span bridge across the Intracoastal Waterway.

                Both state and federal standards now generally require
            coastal bridges and causeways to be elevated on piers to
            minimize adverse impacts on wetlands. moreover, in lieu of
            drawbridges, bridges crossing the Intracoastal Waterway are
            being elevated to permit vehicles to cross unimpeded by
            vessel traffic, and vice versa, and to reduce labor and-
            maintenance costs associated with lift bridges. The bridge
            at South Padre Island is elevated to an 85-foot minimum
            vertical clearance above mean sea level. The proposed
            Dauphin Island Bridge is also designed for 85-foot vertical
            clearance, rising from a 21-foot high prestressed concrete
            roadway elevated on piers.

                Contemporary design standards result in significantly
            more costly bridges and causeways than were initially built
            by local and private interests. For instance, if the Dauphin
            Island Bridge is completed for the current contract amount,
            the cost will exceed $10 million per mile, or 10 times the
            costs per mile of the first bridge completed in 1955. Such
            costs imply that future bridge and causeway construction,
            built to current design standards, may require federal
            funding of a major share. This conclusion was supported
            explicitly by a developer and a realtor.

                Dewey Benefield, Vice President of the Sea Island
            Company, stated that such costs "render economically
            infeasible development of any barrier island that does not
            already have a causeway." More than any other development
            group interviewed, the Sea Island Company has assumed
            privately the costs of roads, causeways, utilities, and urban
            infrastructure to develop St. Simons Island and Sea Island.
            However, Mr. Benefield stated that under today's conditions

           30
<pb n="36" />

                                    Table 4. Costs of Access to Study Communities

                                                                          First Bridge/        First Paved         Bridge/Causeway                      Purpose
                                                                            Causeway              Roads              Expansion,                           of
                                    Location                              ..Cost IYear)        Cost (Year)            Repairs                            Work

                                    North Carolina
                                         Roanoke s6und Bridge                $140,000                NA                   NA                       New Bridge
                                                                              (1928)

                                         Wright Memorial                          NA                 NA               $3,350,000                   New Bridge
                                         Bridge                                                                          (1967)

                                         Route 158                                                   NA                   NA                 improved access, highway
                                                                                                                                             safety

                                         Bonner Bridge                      $4,151,000                                $4,000,000             Repairs; structural support
                                                                             (1964)                                   (1980-1961)
                                    Geor ia                                                                                                  Expansion to four lanes and
                                         Brunswick-St. Simons                  NA                    NA                    NA                elevation proposed
                                         (Torras Causeway)

                                    Florida
                                         Gulf Breeze-                          NA                    NA               $5,000,000                   New Bridge
                                         Pensacola Beach                     (1931)                                       (1974)
                                                                               NA
                                                                             (1948)

                                    Alabama
                                         Dauphin island Bridge              $3,000,000           $900,000            $40,051,500                    New Bridge
                                                                             (1955)               (1955)              (1980-81)

                                    Texas
                                         South Padre island                 $8,598,447               NA              $21,361,242                     New Bridge
                                                                          _LI@5 4 j                                      (1974)
                                    Total                                 $15,889,447                                $73,762,242

                                    Source; Sheaffer &amp; Roland, Inc. - Case Studies.

                        FA
<pb n="37" />

            no public or private corporations or individuals will fund
            causeways.

                Smith Pickett, Jr., whose realty firm specializes in
            Dauphin Island properties, was asked whether Dauphin Island
            development could be financed and accomplished by private and
            local interests as it was 25 years ago, but at today's
            standards. He responded that the island could be developed
            without a bridge, but would have to cater to very exclusive
            development, with access by yacht or private airplane. He
            doubted that private and local interests would put in a
            bridge without federal help, and asserted that there is "no
            way to repeat what is there now" without a bridge, because of
            the cost.

                 Water Supply

                   In several adjacent communities that are on barrier
                   islands, increasing density of development has caused
                   them to rely on mainland sources for water.

                   Only two communities studied still obtain 100 percent
                   of their potable water from wells on the island,-and
                   these systems are being affected by salt water
                   intrusion and infiltration and inflow of polluted
                   water. Both communities have septic system or
                   building moratoria in effect to restrict new
                   development.

                Although the original development of each of the case
            study areas relied upon on-site wells or cisterns for water
            supply, as development intensified there was a tendency to
            replace on-site water supply sources with mainland sources
            via transmission mains built along the islands' causeways and
            bridges. A corollary to this is that mainland source water
            supplies were not tapped until automobile access had been
            provided via bridges and causeways.

                The need for off-island water supplies is based upon the
            limitations of the islands' aquifers and soils to supply '              I
            fresh water and to absorb septic wastes. Early developments
            on the islands, prior to automobile access, consisted of
            sparse and scattered residences, fishing shacks, small
            resorts and military installations. The low density nature
            of these developments enabled them to use shallow wells on
            the islands. In addition, there was enough undeveloped land
            to allow for wastewater disposal via individual septic
            systems without risk of water supply pollution. This

           32
<pb n="38" />

           arrangement continued until the provision of access to the
           islands.

               After construction of bridges and causeways for
           automobile access to the islands, development has increased
           to the point where both the water supply capacity and the
           waste assimilating capacity of the islands have been
           exceeded. Thus, it can be argued that the provision of
           access not only spurs island development but also virtually
           necessitates the eventual provision of off-island water
           supply.

               On South Padre Island, the limited nature of the islands'
           fresh water sources resulted in the construction of a
           mainland water supply source when the first causeway was
           built to the island in 1952. In Dare County, North Carolina,
           automobile access preceded the building of an off-island
           water supply by more than 40 years, reflecting the rather
           slow development of Nags Head and Kill Devil Hills, and the
           relatively larger water supply capacity of the area.
           Nevertheless, by 1977, increased development demands for
           fresh water, coupled with local pollution of water supply
           sources, required construction of a regional water supply
           system using qff-island sources.

               In the cases of Dauphin Island and St. Simons Island,
           water supply sources on the islands are still in use.
           However, these systems use relatively deep aquifers that are
           not as susceptible to surface pollution as other areas. In
           addition, the level of development on these islands is still
           fairly low. Nevertheless, there are already reported
           deficiencies in both existing water supplies related to salt
           water intrusion, declining water levels, and surface
           pollution. Both communities have sewer or septic system
           moratoria in effect until additional waste treatment capacity
           or water supply capacity can be obtained.

                   Availability of water from island or mainland sources
                   has not been a constraint on development in most of
                   the study areas. An exception is South Padre Island
                   where the availability and cost of additional water
                   rights are limiting further development.

               In  each case study area, water supply was a critical
           requirement for development and was, consequently, provided
           to whatever degree necessary in the,course of each island's
           development. The Mobile Area Chamber of Commerce provided
           funds from the original sale of lots on Dauphin Island for

                                                                          33
<pb n="39" />

           construction of a water supply system in 1955. This system
           had adequately served the island until 1979, when capacity
           problems and hurricane damages were encountered. The Dauphin
           Island Water &amp; Sewerage Board has proposed system expansions
           to meet these deficiencies.

               Similarly, the communities of Nags Head and Kill Devil
           Hills met their water supply needs after individual wells
           became inadequate before 1962. In 1962 the communities built
           a joint municipal system using both surface and groundwater
           sources. In 1977, Dare County constructed a regional water
           supply system which replaced the municipal supply sources, in
           response to further development pressures in the communities.

               The South Padre Island water supply facilities were
           provided both by the island's developer and by a local water
           district in several stages. The island is currently served
           by a transmission main from the mainland which conveys water
           from the Lower Rio Grande. River water was obtained as a
           source through purchase of water rights. Current water
           rights have been judged adequate only for modest future
           growth. The cost of obtaining additional water rights is
           considered to be high enough to hinder further development.

                  Federal expenditures, in the form of low interest
                  loans, grants, and sale of excess property,
                  contributed to establishing or upgrading water supply
                  systems in some of the study areas. Community systems
                  in the Nags Head - Kill Devil Hills area and on St.
                  Simons Island benefited from federal loans and sale of
                  excess property, respectively. Expansions of existing
                  systems in South Padre Island and Nags Head - Kill
                  Devil Hills also received federal grants and loans. A
                  currently planned expansion of the facilities at
                  Dauphin Island awaits similar federal aid.

               In the communities studied, federal government assistance
           has been significant in establishing and upgrading water
           supply systems. These effects are not due to any one federal
           program, however. The water supply system installed by the
           U.S. Navy on St. Simons Island in the 1940s was sold as
           excess property to the local county government in 1947 and
           served as the first municipal water supply system for
           development on the island. The same system is in use today,
           although state funds will be used for its expansion in the
           near future.

               The communities of Nags Head, Kill Devil Hills, and South

           34
<pb n="40" />

           Padre Island obtained federal assistance under two separate
           programs. The adjacent Outer Banks communities obtained a
           low-interest, long-term loan from the Farmers Home
           Administration (FmHA), under the Rural Communities Water &amp;
           Waste Disposal Systems Program, to finance the communities'
           first water supply systems jointly. Fifteen years later Dare
           County took advantage of the same program to obtain both an
           FmHA grant and loan to finance a regional water supply
           system; the system was designed primarily to serve the same
           two communities.

               South Padre Island was an unincorporated development when
           its first water supply system was constructed without federal
           aid in 1952. After the island was incorporated, a major
           expansion and upgrading of the water system was carried out
           in 1977, with partial funding by an Economic Development
           Administration grant.

              Dauphin Island developed its first community water supply
           system with funds obtained through land sales on the island.
           To repair damages the system sustained during Hurricane
           Frederic in 1979, more than $250,000 in disaster relief funds
           from the Federal Emergency Management Agency were approved.
           Realtor Smith Pickett, Jr. noted that further development on
           the island wiil require either a mainland fresh water source,
           or desalination of water. The Dauphin Island Water &amp;
           Sewerage Board has applied for Department of the Interior
           funding of a demonstration desalination plant to serve as an
           expansion to its existing water system.

               The case studies show that the pattern of federal
           assistance to communities for water supply, while not
           representative of any single or coordinated program, is
           nevertheless significant for the number of programs through
           which funding assistance has been available. Cost
           information on water supply systems in the study communities
           is presented in Table 5. Of costs totaling $14.3 million,
           the federal share was $2.3 million.

                Wastewater Management

                  In all communities studied, initial development relied
                  primarily on septic systems for disposal of
                  wastewater; as development increased, septic systems
                  tended to exceed the capacity of local soils to
                  assimilate the wastes.

                  In all study communities, the provision of a complete
                  sewerage system and wastewater treatment facilities

                                                                     35
<pb n="41" />

                        Uj

                                   Table 5. Water Supply System Costs in the Study Communities.

                                                                                                              Total Cost Attributable         Federal        Federal
                                   Location                                  Type of Facility                   to Study Communities          Share          Agency

                                   North Carolina                                                                                                                  I
                                       Kilf-Devil Hills -            Municipal water supply - ground          $ 4,073,500 - Guaranteed                        FmHA
                                       Nags [lead                      water                                                 Loan
                                                                     Regional water supply                    S 4,886,950 -  Guaranteed     $806,350-         FmHA
                                                                                                                             Loan             Grant

                                   Geo[2ia                                                                          NA                           NA

                                   Alabama
                                       Dauphin Island - 1955         Wells, storage tank, distribution        $   625,000
                                                                       lines
                                                      - 1980         proposed expansion                       $ 1,178,000                        --                2
                                                      - 1980         Proposed desalination plant              $   849,000                    $849,000          Doi

                                   Texas
                                       South Padre Island - 1954     Water Main                               $   200,000                        --
                                                            - 1954   Water distribution lines, storage        $   300,000
                                                                       tank
                                       Fresh Water District   #1 -
                                         1955                        Acquisition of water system              $   100,000
                                         South Padre Island   -
                                           1966-1972                 Water main installation                  $   200,000                        --

                                       Fresh Water District   #2                                                                                                   3
                                         1973                        Water system expansion                     1,911,000                    $723,330          EDA
                                   Total                                                                      $14,323,450                  $2,378,680

                                       Farmers Home Administration, Department of Agriculture.
                                   2   Department of the interior.
                                   3   Economic Development Administration, Department of Commerce.

                                   Source: Sheaffer &amp; Roland, Inc. - Case Studies.
<pb n="42" />

                  has become a requisite for prevention of environmental
                  degradation and for continued development on the
                  islands. Septic system moratoria were in effect in
                  Kill Devil Hills, Dauphin Island, and St. Simons
                  Island when the case studies were conducted.

               Early development in the study communities was of very
           low density and the vast majority of the individual homes,
           businesses, and resorts used septic systems to treat
           wastewater. Under the circumstances, septic systems were the
           least expensive and most trouble-free method of wastewater
           treatment available. Small package plants with limited sewer
           systems provided service to a small number of homes on
           Dauphin Island, a county park facility on South Padre Island,
           and some of the early residences on St. Simons Island.

               As communities became more easily accessible, an
           increasing number of lots were developed, and seasonal
           population increased. The rather low waste assimilating
           capacity of the sandy island soils was eventually exceeded in
           all of the study communities. occurrences of surface flows
           of untreated wastes, groundwater pollution from septic
           wastes, and migration of wastes into prime coastal waterways
           became more frequent.

               Eventually each of the study communities began to install
           sewer systems. Several of the larger hotels on South Padre
           Island installed private "package" wastewater treatment
           plants. In 1977, a complete sewer system and wastewater
           treatment plant to serve the entire town was installed with
           the help of Environmental Protection Agency's Wastewater
           Treatment Facilities Construction Grant funds.

               On the Outer Banks, only private package plants serving
           small subdivisions or motels are currently in use other than
           septic systems. Consequently, septic system effluents have
           been polluting Roanoke Sound. A septic system moratorium is
           in effect in portions of Kill Devil Hills while a regional
           sewerage plan to serve both Kill Devil Hills and Nags Head is
           reviewed for approval and funding by the Environmental
           Protection Agency.

               At St. Simons, a.small wastewater treatment plant was
           installed to serve the Naval Air Base on the island, and also
           served a small portion of the community outside the base.
           Following World War II the base was closed, and the treatment
           plant was declared excess and sold to Glynn County in 1947.
           St. Simons Island has expanded this sewer system to serve

                                                                      37
<pb n="43" />

           most of its development. However, the present system has
           operational difficulties and an upgrading of both the sewer
           system and the treatment plant is under way with
           Environmental Protection Agency funding anticipated.

               Dauphin Island, currently served primarily by septic
           systems, is under a septic system moratorium due to septic
           pollution of the waters of Mississippi Sound. In late 1980,
           the Water &amp; Sewerage Board had pending Environmental
           Protection Agency funding of a major expansion of its
           sewerage system. The federal share would be $3.5 million; a
           balance of $5.6 million is expected to be paid by assessing
           each lot on the island.

                  In only one of the study communities were federal
                  monies for wastewater management systems expended as
                  part of the initial costs of development of the
                  islands. The original wastewater treatment plant and
                  sewer system on St. Simons Island was built by the
                  U.S. Navy and sold as excess property to Glynn County
                  in 1947.

               Much of the development in the study communities
           antedated federal water pollution control programs. Also,
           characteristic development patterns for barrier islands made
           them ineligible for federal assistance in the initial costs
           for wastewater management. Federal monies for sewers and
           wastewater treatment facilities are available for meeting the
           20-year needs of existing communities (EPA Facilities
           Construction Grants), for providing initial facilities to
           existing incorporated rural communities (Farmers Home
           Administration) or urban communities (Department of Housing &amp;
           Urban Development), and for providing new or expanded
           facilities in areas of pressing economic need (Economic
           Development Administration). Thus, federal programs are
           structured to aid only existing communities.

               In contrast, development of barrier islands typically
           began as private residential or resort areas, physically
           isolated from nearby communities. These developments are
           therefore not viewed as expansions or annexations of existing
           developed areas and are not generally eligible for federal
           wastewater funds. Once established, however, barrier island
           developments soon grow to the point where increased
           densities, the need for a centralized sewerage system, and
           political incorporation tend to occur concurrently. Federal
           assistance to these communities tends to follow soon
           thereafter.

           38
<pb n="44" />

                  Federal funds spent so far in connection with
                  wastewater management in the study communities are:
                  201 planning funds for wastewater treatment facilities
                  and one construction grant (at South Padre Island).
                  The federal contribution is estimated to be $3.3
                  million.

                  Two of the study areas are currently seeking federal
                  construction grants for new or expanded wastewater
                  treatment facilities:

                       - Dauphin Island, Alabama       $3.5 million
                       - Dare County, North Carolina   $7.5 million

               Although some degree of coastal surface water and
           groundwater pollution (attributable to failed septic systems)
           occurred in some of the study areas before the 1970s, none of
           the communities perceived that they had a pollution problem
           which required immediate action. Development of water
           quality standards and enforcement measures under Federal
           Water Pollution Control Act Amendments of 1972, and planning
           efforts under the Coastal Zone Management Act, resulted in
           recognition of pollution problems by state and federal
           agencies. Subsequent pressure and incentives induced
           communities to address these problems.

               In 1975 South Padre Island began to plan for installation
           of sewers and treatment facilities. By 1978 the remainder of
           the study communities were actively involved in the
           wastewater facilities planning process. Thus, all of the
           current wastewater planning and construction activities in
           the study areas have occurred while the Environmental
           Protection Agency's Wastewater Facilities Planning and
           Construction Grant programs have been in effect.

            -  Most of the study community leaders did not object to
           federal and state pressures to upgrade wastewater treatment.
           However, some community leaders objected to federal emphasis
           on centralized sewer systems and an insensitivity to the
           relationship between such systems and local growth. In
           communities attempting to control development, control over
           water supply and wastewater management are powerful tools for
           local officials to use in directing the course of
           development. Installation of centralized wastewater
           treatment facilities removes one of the potential controls,
           and was cited in at least one community as a negative factor
           inducing unwanted growth.

                                                                      39
<pb n="45" />

                  Costs of wastewater facilities built or planned in the
              study communities, with estimated levels of federal
              participation, are shown in Table 6. The federal share
              represents almost half of the total costs of $29.5 million.

                   Disaster Assistance

                      Federal disaster assistance funds of at least $43
                      million will be expended in two of the study
                      communities as a result of Hurricanes Frederic and
                      Allen. Major disasters had been declared in the
                      remaining states studied between 1953 and 1964, but
                      none were declared in those states from 1965-1980.

                  Federal disaster assistance programs surveyed in the
              course of the study provide a limited measure of federal
              involvement in this area. All Presidential declarations         of
              major disasters were reviewed from May 1953 (the inception of
              the federal disaster assistance program) to present. Data on
              the Presidential declarations were divided into two periods:
              (1) from May 1953 to December 1964 the disaster funding list
              reported by state as the smallest political unit; and (2)
              from December 1964 to present, the data are reported and
              available by state, county, local community, and funding
              category.

                  During the period May 1953 - December 1964, there were
              five disaster declarations involving coastal storms in study
              communities in North Carolina and Georgia. These included
              four hurricanes and one major storm in North Carolina, and
              one hurricane in Georgia. Federal disaster assistance
              payments to the state and communities totalled $9,690,946 in
              North Carolina and $1,309,782 in Georgia:

                                              Presidential
                            Declaration           Fund          Type
                               Date           Expenditures     Storms

              North        Oct. 17, 1954        $1,290,939   Hurricane
              Carofina     Aug. 13, 1955        $5,254,396   Hurricanes
                           Oct. 1,     1958     $ 846,588    Hurricane
                           Sept 12,    1960     $1,2090,420  Hurricane Donna
                           Mar. 16,    1962     $1,089,604   Noetheastern
                                                             (Ash Wednesday
                           Total                $9,690,946        Storm)

              Georgia      Sept.10, 1964        $1,309,782   Hurricane   Dora

             4Q
<pb n="46" />

                               Table 6.   Costs of Wastewater pacilities in Study Colmaunities

                                                                                                            Total Cost Attributable
                               Location                        Type of Facilit                              To Study Communities           F@deraj Share      eaderal A,3pnc

                               North Carolina
                               Ocean Acres Subdivision,        Small sewer system and package                                              NA                 NA
                                  Kill Devil Hills             plant for subdivision
                               Dare County                     Regional sewerage and treatment              $10,198,150                      5,116,000        EPA
                                                               system to serve both Kill Devil
                                                               Hills and Nags Head

                               gto r I Lia
                               St. Simons Island               U.S. Naval facilities                                                       100%               U.S. Navy

                               St. Simons Island               package plant addition                       $    845,000                   0                  NA
                               St. Simons island               Sewer system and treatment plant             $ 4,535,000                      1,200,000        EPA
                                                               expansions

                               Alabama
                               Dauphin Island                  Small sewer system and package                                              NA                 NA
                                                               plant
                               Dauphin island                  Repairs to existing system                   $    250,000                   $    250,000       FEMIN
                               Dauphin island                  Sewer system and treatment plant             $ 9,242,918                    $ 3,512,000        EPA
                                                               expansions

                               Texas

                               South Padre island              Small sewer system and package plant         --                             NA                 NA
                               Cameron County                  Regional sewer system and treatment          $ 4,400,000                    $ 3,300,000        EPA
                                                               plants

                               Totals                                                                       $29,571,068                    $13,978,000

                               Source;   Sheaffer &amp; Roland, Inc. - Case Sttxlies
<pb n="47" />

                Note that the damages in North Carolina were incurred
            before the major development of the Outer Banks. Storms of
            those magnitudes today would cause significantly greater
            damage.

                After December 1964 the survey revealed no major flood
            disasters in Dare County, North Carolina or in Glynn and
            Camden Counties, Georgia. This reflects a remarkably
            quiescent 16-year period in major storm activity in this
            area. Major disasters have been declared in the two Gulf of
            Mexico study areas during that same period, associated with
            Hurricanes Camille (August 1969), Frederic (September 1979),
            and Allen (August 1980).

                Information on these three hurricanes was available from
            the Corps of Engineers for Hurricane Camille, and the Federal
            Emergency Management Agency for Hurricanes Frederic and
            Allen. The study team was unable to obtain physical disaster
            loan data from the Small Business Administration, nor data
            from other agencies which may have expended funds following
            Hurricane Allen. As a result, the materials available only
            partially reflect the total federal expenditures for these
            storms in the study areas.

                In the aftermath of Hurricane Camille (one of the most
            severe storm ever to strike the continental United States),
            major disasters were declared covering counties in Louisiana,
            Mississippi, and Alabama. Although Mississippi bore the
            principal damage, at Dauphin Island the storm barely
            qualified as a hurricane. Nevertheless, gusts of minimal
            hurricane force (75 mph) and tides of 5 - 9 feet caused light
            to moderate damage. The After-Action Reports of the Corps of
            Engineers estimate that nearly 2,800 acres of the island were
            flooded. Available reports tended to estimate dollar
            damages, and only a few reported federal dollars expended.
            The Corps reported that nearly $21,000,000 was spent for
            debris removal in all counties, including $48,800 spent for
            all of Mobile County. The Corps also reported a cost of
            $21,200 to clear obstructions and remove shoals in Dauphin
            I'sland Bay. While the data available are not specific to
            Dauphin Island, the study team concluded that less than
            $100,000 in federal funds was expended on Dauphin following
            Hurricane Camille.

                Hurricane Frederic passed over the west end of Dauphin
            Island near midnight, September 12 - 13, 1979, inflicting
            severe flooding and wind damages on the island. There was

           42
<pb n="48" />

           severe destruction and damages were experienced as far east
           as Gulf Shores, Alabama, and light-to-moderate flooding and
           damages in Pensacola Beach.

               Federal reimbursements identifiably applicable to Dauphin
           Island from the Federal Emergency Management Agency totaled
           $1,182,427. These included expenditures for debris
           clearance, protective measures, water control facilities
           (e.g., seawalls), public buildings, public utilities, and
           miscellaneous utilities and services. They are detailed in
           Table 7.

               Expenditures on Dauphin Island for sand removal, repairs
           to county roads, and resurfacing of local streets were
           included in overall Mobile County applications for debris
           removal and road systems. The county engineer of Mobile
           County provided estimates of these costs allocable to Dauphin
           Island:

                        Sand removal                   $ 719,000
                        County road repairs            $ 842,450
                        Resurfacing local street       $ 210,800

                        Total                          $1,772,250

               An additional $51,500 was expended for repairs to the
           airport on Dauphin Island, reimbursed from Federal Emergency
           Management Agency funds.

               The overwhelming public expense on Dauphin is the cost of
           the storm-damaged Dauphin Island bridge and causeway. These
           costs, 100 percent of which are being funded by the Federal
           Highway Administration, are estimated to be:

               Demolition and removal of bridge        $ 5,000,000
               Construction of new bridge              $33,000,000
               Temporary ferry service                 $ 2,000,000

               Total estimated cost                    $40,000,000

               Hurricane Allen, the first hurricane of the 1980 season,
           struck the Texas coast on Padre Island, north of South Padre
           Island. That landfall placed South Padre Island on the left
           side of the storm, fortunately reducing the damages that they
           most assuredly would have experienced if the storm had struck
           south of the city. Nevertheless, the city applied for nearly
           $400,000 in disaster relief funds, three-quarters of which
           was reimbursed by the Federal Emergency Management Agency,

                                                                          43
<pb n="49" />

                          Table 7.   Federal Funds for Disaster Response and Recovery, Bridge Construction, and Airport Repairs
                                     Hurricanes Camille, Frederic, and A)I'en.

                                                               Hurricane Camille                 Iturricanes Frederic and Allen
                                                               FundTn-gMobile            Funding    Dauphin    Mobile County, South Padre
                          Purpose of Expenditure               Agenc      @ount          Agency     Island     (Daup htn S.     Island
                          Bridge Demolition and Clearance      COE2            0         FHwA3     $ 5,000,000              0             0
                          Bridge Construction                  COE             0         FHwA       33,000,000              0             0
                          Airport Repairs                      COE             0         FEMA4           51,500             0             0
                          Ferry System                         COE             a         FHWA         2,000,000             0             0
                          Debris Clearance                     COE    $ 48,000           PEMA                315  $ 719,000         48,287
                          Protective Measures                  COE             0         FEMA            75,3885
                          Road Systems                         COE                                                          0       37,683
                                                                           NA            FEMA                  0    1,053,250       244,254
                          Water Control Facilities             COE             0         FEMA           18'  000            0       59,562
                          Public Buildings                     COE         5,000         FEMA           57 438 5
                          Public Utilities                     COE         4,900         FEMA           544:0946            0        4,565
                          other                                                                                             0             0
                                                               COE        21,200         FEMA           487r282             0        1,459
                          Subtotal Application                 COE             -         FEMA       $1,182,427     $1,172,250       395,815
                          Total Approved                       COE      $100,000                    $41,233,927    $1,172,250      $296,861 (75%)
                          IPortion of disaster funds approved for Mobile County and allocable to Dauphin Island, according         to
                           County Engineer, Mobile County.
                          2Corps of Engineers, Department of the Army.
                          3Federal Highway Administration, Department of Transportation.
                          4Federal Emergency Management Agency, Federal Insurance Administration.
                          5includes protective measures for damages sustained by Marine Environmental Science Consortium.
                          6Damage to water and sewer systems.

                          Source. Data for Hurricane Camille from Corps of Engineersj data for Hurricanes Frederic and Allen from
                                   Federal Emergency Management Agency, Office of Disaster Response and Recovery; other agencies,
                                    such as the Small Business Administration, may have expended funds after Hurricane Allen, but
                                    these data were not available.
<pb n="50" />

           under the newly instituted cost-sharing policy of the Agency.
           Distribution of the costs is displayed in Table 7.

               Flood Insurance

                  Flood insurance coverage in the study communities
                  currently exceed $578 million. Claims totalling $17.8
                  million were paid in the study communities in the
                  period January 1978 to November 1980. Sharp increases
                  in the total number of policies and total flood
                  insurance coverage were noted following Hurricanes
                  Frederic and Allen.

               Flood insurance is perceived in most of the study
           communities as a positive force in obtaining financing where
           it is needed. Only at Sea Island was flood insurance
           perceived as insignificant in financing, largely because of
           the wealth of most individual property owners.

               Five of nine communities or counties studied are in the
           regular program of the National Flood Insurance program. In
           these five communities, new construction appeared to comply
           with the Program's first floor elevation requirements for a
           100-year storm surge level.

               The study communities' status in the National Flood
           Insurance Program, including total number of policies and
          .total amount of insurance is depicted in Table 8. As of
           November 1, 1980, 11,812 flood insurance policies (under the
           regular program or the emergency program) were in force in
           the nine communities and counties. Coverage totaled $578.56
           million. The average policy amount is $48,981 for the nine
           communities.

               Claims payment data for the years 1978 - November 1980
           are also depicted in Table 8. In that roughly three-year
           period more than 1,800 claims were paid in the total amount
           of $17.81 million, for an average claim of $9,850.
           Approximately 98 percent of those claims related to damages
           incurred in Hurricanes Frederic (1979) and Allen (1980).
           When all other claims payments are removed from the data, the
           average claim payment was $10,075; all other claims averaged
           just one-half of that, or $5,023.

               Data presented in Table 9 compare communities in the
           regular and emergency programs with national experience in
           the National Flood Insurance Program between January 1978 and
           April 1980. Although strictly coastal data could not be

                                                                      45
<pb n="51" />

                                    Table 8. Flood insurance in Force and Claims Paid in Study Communities (As of Nov. 1, 1980).

                                                                     Program      Number of            Amount of            Year of           Claims             Amount                Average
                                    Community                        Status       Policies             Insurance               Flood            Paid              Pa id                 Claim

                                    Dare County, NC                      R          2,252              $107,475,700            1978                 9         $        13,053          $ 561
                                                                                                                               1979                 1                     502             502
                                                                                                                               1980               15                  71,259            4,751
                                    Kill Devil Hills, NC                 R          1,214               67,486,100             1978                 7                  2,760              394
                                                                                                                               1979                 0                       a                  0
                                                                                                                               1980               11                  39,529            3,594
                                    Nags Head, NC                        R          1,298               79,804,700             1978                 0                       0                  0
                                                                                                                               1979                 a                       0                  0
                                                                                                                               1900               15                271,336'           18,009
                                    St. Marys, GA                        E               57                1,856,400           1978                 0                       0                  0
                                                                                                                               1979                 0                       0                  0
                                                                                                                               1980                 0                       0                  0
                                    Camden County, GA                    E               31                1,005,500           1978                 0                       0                  0
                                    (1/31/80)                                                                                  1979                 0                       0                  0
                                                                                                                               1980                 0                       0                  0

                                    Glynn County, GA                     E          2,018               83,303,800             1978                 0                       0                  0
                                                                                                                               1979                 0                       0                  a
                                                                                                                               1980                 0                       0
                                    Pensacola Beach, FL                  R          1,419               92,818,700             1978                 1                  1,146            1,146
                                                                                                                               1979               550             3,862,328             7,022  2
                                                                                                                               1900                 1                  1,471            1,471
                                    Mobile County, AL                    R          2,441               97,706,800             1978                 5                  3,849              770  2
                                                                                                                               1979               861            10,763,938            12,502
                                                                                                                               1960               42                 342,980            8,166
                                    South Padre Island, TX               E          1,082               47,107,400             1978                 5                  3,031              606
                                                                                                                               1979                 1                     ago             880
                                                                                                                               1980              283              2,440,543             8,624.
                                    Total                                           11,812             $578,565,100                            1,007           $17,810,605             $9,850

                                       National Flood insurance Program Status:             E    Emergency Programl R        Regular Program
                                    2  Payments related to Hurricane Frederic: Pensacola Beach, 538 payments totaling $3,849,644.
                                    3  Payments related to Hurricane Allen: Mobile County, 636 payments totaling $10,718,059.

                                    Source: Federal Emergency Management Agency, Federal insurance Administration, Washington, D.C.
<pb n="52" />

                                 Table 9.   Comparison of National Flood insurance experience with Experience in Study Communities aetween 1978 and April
                                            1980.

                                                                               National Flood insurance Experiencel                      Experience in Study committee  2
                                                                                         (1/l/78 - 4/23/80)                                   11@1/78  - 3Z31/80)
                                                                                                                                              Regular          Emergency
                                                                                                                   Emergency
                                                                 Zones Al-A30, I V  4          V Zones             Program                    Program          Program

                                 Number of policies                          578,645              56,401             661,914                     7,577             2,700
                                 Total insurance in Force           $26,945,323,000      $3,557,353,900     $19,862,867,000               $335,967,200       $99,400,000
                                 Average Policy in Force                     $46,550            $63,072              $30,000                  $44,340            $36,015
                                                                              24,967               2,199              55,973                     1,518                  6
                                 Total Paid Claims                                                             $273,247,253                $ls,366,151            $3,911
                                 Total Claims Payment                   $184,959,850        $23,526,261                                       $10,123                $652
                                 Average Claim Payments                       $7,408            $10,690               $4,882

                                     Columns headed *Zones Al-30, v- and 'Emergency" contain both coastal data (an estimated 10 percent) and riverine data
                                     (about 90 percent).   Strictly coastal data could not be separated.     The only purely coastal data under "National
                                     Experience" are "V Zones.*
                                 2   The "Regular Program" data under "Experience in Study Communities" include both 'A Zone" and "V Zone* data which could not
                                     be separated.
                                 3   .Zones A)-A30" are areas of special flood hazards with base flood elevations determined. Zones assigned according to flood
                                     hazard factors.
                                 4   .V Zones" are coastal high hazard areas with high wind velocity that are inundated by tidal floods. Zones assigned
                                     according to flood hazard factors.
                                 5   Study community emergency data do not include Hurricane Allen data; Allen occurred in August 1980, after the time period of
                                     this comparison.  Statistics with Hurricane Allen coverage included are:       Total Claims paid, 289; Total Claims Payment,
                                     $2,444,454; Average Claim Payment, $0,458.

                                 Source: Data for national experience from Federal Emergency Management Agency, Federal Insurance Administration, "Loss
                                          Expense Experience, January 1, 1978 - April 23, 1980, Exhibit 11, Sheet I." Data for study communities from Federal
                                          Emergency Management Agency, National Flood insurance Program. Compiled by Sheaffer &amp; Roland, Inc.
<pb n="53" />

            separated (see note to table), average Policy In Force data
            strongly suggest that buildings in the regular program
            communities were underinsured when compared to the national
            experience in V Zone areas (coastal high hazard areas with
            high wind velocity, vulnerable to inundation by tidal
            floods). The average claim payments in the regular program
            communities were also comparable to national V Zone
            experience. Thus, although the study communities contain
            both V Zone areas and areas of less hazardous flood
            conditions (A Zone areas), their damage experience approaches
            the purely V Zone experience on a national level. In view of
            the long history of coastal storms in the study communities
            in the regular program, one would anticipate that flood
            insurance coverage would be higher than it is. In South
            Padre Island, the data on the average policy in force in the
            emergency program reflect an unusually high number of
            condominiums and commercial structures (486) in comparison to
            single family dwellings insured.

               The regular program communities (Kill Devil Hills, Nags
            Head, Dare County, Pensacola Beach, and Mobile County) had
            average claims payments experience slightly less than the
            national average for V Zones. They included claims for
            damage from Hurricane Frederic in Mobile county ($12,502
            average claim) and Pensacola Beach ($7,022 average claim) and
            damage from a northeaster that struck the North Carolina
            coast in the winter of 1980, destroying three homes in Nags
            Head and resulting in average claims of $18,089 in that
            community.

               The inclusive date of Table 9 stopped four months before
            Allen occurred. Average claims experience with Allen
            included in the emergency program data is $8,458, nearly 75
            percent greater than the national emergency program
            experience.

               Sharp increases in the number of policies in force and
            total flood insurance coverage were noted in the study
            communities that had experienced major storms. Flood
            insurance data immediately preceding Hurricanes Frederic and
            Allen were collected for Mobile County, Pensacola Beach, and
            South Padre Island, and are compared to the November 1, 1980
            flood insurance data in Table 10.

               Combining the three communities, the number of policies
            increased 34 percent and policy coverage increased 56 percent
            after the storms. The largest gains were in Mobile County,
            where Hurricane Frederic amply demonstrated the need for more
            widespread coverage; the number of policies increased by 57

           48
<pb n="54" />

                                       Table 10. Comparison of Pre- and Post-Hurricane Flood Insurance Coverage (Mobile County, AL; Pensacola Beach,
                                                    FL; and South Padre island, TX).

                                                                    Pre- torm Coverage                        Post-Storm Coverage                 Percent Increase
                                                                         NumE-erof Amouni-Of           As of       Number of     Amount of       Number of Amount of
                                       LocatJon               Date        Policies Coverage            Date        Policies      Coverage        Policies Coverage

                                       mobile County          8/31/79       1,553      $59,294,800     11/1/80     2,441     $   97,706,800          57%         65%

                                       Pensacola Beach        8/31/79       1,221       57,530,700     11/1/60     1,419         92,818,700          16%         61%

                                       South Padre Island     7/31/80    - 906          35,096,200     1.1/1/80    1,082         47,104,400          19%         34%

                                       Total                                3,680    $151,921,700                  4,942       $237,629,900          34%         56%

                                       Source; Federal Emergency Management Agency, Federal insurance Administration. Compiled by Sheaffer
                                                  Roland, Inc.
<pb n="55" />

           percent (888 new policies), but the average policy amount
           increased only $1,875, or less than 5 percent, in Mobile
           County. The Pensacola Beach and South Padre Island data
           indicate nearly total penetration of the market in number of
           policies, but structures are distinctly underinsured. Of the
           three communities, Pensacola Beach registered the highest
           increases in average policy amounts, with policies increasing
           nearly $18,300 or 38 percent. Average policy amounts for the
           three communities combined increased 16 percent from $41,283
           to $48,084.

          50
<pb n="56" />

                          IMPLICATIONS FOR FEDERAL POLICY

               The insights gleaned from this study have a number of
           implications for federal policies toward development or
           protection of barrier islands. For comparison purposes, it
           is helpful to juxtapose a "protection" policy against a
           "development" policy. The study offered insights into the
           costs of a federal development policy in three of the study
           areas, corroborating at least in these instances estimates
           previously made of the costs of current federal programs
           projected to development of the remaining undeveloped,
           unprotected barrier islands.

               Development Policy

               Current federal programs can be characterized as part of
           a federal development policy. They support development,
           effectively leveraging private development money by shifting
           to the public sector portions of the costs of bridges, roads,
           causeways, water supply systems, wastewater treatment
           systems, shore protection, disaster relief, and flood
           insurance. The dimensions of that support are suggested in
           three of the study areas where federal expenditures were
           documented: Nags Head and Kill Devil Hills, Dauphin Island,
           and South Padre Island. When federal expenditures are
           distributed according to developed acreage in the study
           communities, the federal expenditures represent an average
           subsidy of $25,570 per acre in actual dollars expended over a
           number of years. (See Table 11.) When restated in terms of
           1980 replacement costs, the federal subsidy in the three
           study areas amounts to $53,250 per developed acre.

               The sample area from which the federal expenditures have
           been drawn may or may not be representative of coastal
           communities similarly situated. However, the figures are
           consistent with estimates prepared by Sheaffer, Miller, and
           Rozaklis in their 1980 testimony before the House of
           Representatives and8the U.S. Senate on then pending barrier
           island legislation.   The subsidy estimates also are
           consistent with Miller's subsequent modifications to reflect
           the reduction in undeveloped, unprotected barrier island
           acreage in the National Park Service's August 1980
           inventory.9

               Table 12 shows estimates of the potential costs of
           developing remaining barrier islands, based on the present
           worth of current federal programs. It uses the National Park

                                                                       51
<pb n="57" />

      Ln          Table 11: Federal Expenditures in Three Study Areas (Nags Head and Kill Devil Hills, NC;
                             Dauphin Island, AL; and South Padre Island, TX) in Relation to Developed Acreage

                  Purpose of Federal Expenditures                          Amount of Expenditures

                  Bridge/causeway expansion, repairs                             $33,710,742
                  Water supply systems                                             2,378,680
                  Waste water Management                                         13 978 000 1
                  Disaster response &amp; recovery                                    43:403:0382
                  Flood insurance subsidy                                          3,2830736

                  Total Federal Expenditures                                     $96,754,196
                     Total developed acreage                                            3,7843

                     Average federal expenditure per developed acre                  $25,570

                  1Includes $40,051,500 attributable to Dauphin Island Bridge/Causeway.
                  2The flood insurance claims totaled $17,810,605 in the study communities. Federal subsidy is
                  based on an average subsidy of $278 per policy experienced nationwide during the period 1978
                  1980, times 11,812 policies in force in the study community.
                  3Study community developed acreage:
                           Nags Read, NC                         1,095
                           Kill Devil Hills, NC                    900
                           Dauphin Island, AL                       289
                           South Padre Island, TX                1,500

                           Total developed acreage               3,784

                  Source: Compiled by Sheaffer and Roland, Inc. using expenditure data from-Tables 4 through       9.
<pb n="58" />

                                      Table 12. Estimated Potential Costs of Developing Barrier islands in April 1980 Inventory,
                                                   Based on Present worth of Current Federal Programs.

                                                                                  L w Development Case   1_               High Development Case   2
                                                                            -9stimated                               Estimated
                                                                             Federal Costs      Percent of          Federal Costs      Percent Of
                                      Federal Assistance Programs               Billion)        Federal-Costs          Billion)        Federal Costs

                                      Sewers and Wastewater treatment            $1.20             29                     $3.61               32
                                      water supply                                .68              16                     2.00                18
                                      Roads, bridges, causeways                   1.11             27                     2.77                25
                                      Disaster relief                             .42              10                     1.31                12
                                      Flood insurance                             .25                6                      .79                7
                                      Shore protection, maintenance,
                                        flood control                             .47              11                     0.72              -  6

                                      Total                                      $4.13             100                  $11.20                100

                                       Assumes development related to the 160,000 acres of undeveloped uplands in the National Park
                                       Service's April 1980 Inventory of Undeveloped, Unprotected Barrier Islands.
                                      2Assumes development related to all undeveloped acreage (about 480,000 acres of uplands, wetlands,
                                      and interior waters) in the April 1980 Inventory.

                                      Source;   High estimates -- "Barrier islands Purchase: A Cost-Effective Approach to Management."
                                                Testimony of John R. Sheaffer and Louis Rozaklis before the House Committee on Interior and
                                                Insular Affairs, Subcommittee on National Parks and Insular Affairs, on HR 5981, March 27,
                                                1980.

                                                Low estimates -- Statement of John R. Sheaffer, H. Crane Miller, and Louis Rozaklis,
                                                Sheaffer &amp; Roland, Inc., before the Committee on Energy and Natural Resources, United States
                                                Senate, concerning S. 2686, June 12, 1980.
                         Ln
                         W
<pb n="59" />

             Service's April 1980 inventory, showing 480,000 acres of
             undeveloped, unprotected barrier units, consisting of
             uplands, wetlands, and interior waters. The estimates assume
             the development of the upland portions of the island and the
             dredging and filling of as much as 60,000 acres of wetlands
             for development purposes. The low estimates assume
             development of 160,000 acres of uplands only, and omit
             wetlands and interior waters from the calculations.

                 Since the analyses for Table 12 were prepared, the
             National Park Service revised its April 1980 inventory of
             barrier islands. The August 1980 inventory removed nearly
             200,000 acres (almost 43 percent) from the undeveloped,
             unprotected category. Approximately 108,000 acres in Texas
             and 39,000 acres in Louisiana formerly included in the
             category did not fully fit the definition of a barrier
             structure. Another estimated 45,000 acres were found to be
             in a protected status, and about 4,300 acres were
             reclassified as being developed land.

                 Table 13 shows Miller's adjusted estimates reflecting the
             reduction in unprotected, undeveloped acreage. The estimated
             cost to the federal government of funding barrier island
             development under current programs could range from $2.46 to
             $6.05 billion over the next 20 years.

                 Protection Policy

                 A fairly wide range of "protection" strategies, of
             varying cost and effectiveness, are available to the federal
             government. Under a protection policy, it would be necessary
             to distinguish between two distinct status quo conditions:

                      1. "Noncontiguous" barrier islands that are totally
                         or almost wholly undeveloped, that are not
                         immediately adjacent to developed areas, and that
                         are accessible principally by boat (an estimated
                         138,100 acres);

                      2. "Contiguous units" -- undeveloped barrier units
                         immediately adjacent to totally or partially
                         developed areas, and generally accessible by
                         roads, bridges, or causeways (an estimated
                         138,000 acres).

             Another 885,000 acres are currently in the public domain and
             are considered "protected" from development, and an estimated
             280,000 acres are totally or partially developed. The
             acreage in the public domain are excluded from these policy

             54
<pb n="60" />

                                          Table 13. Estimated Potential Costs of Developing Barrier islands in August 1980 Inventory,l
                                                     Based on Present Worth of Current Federal Programs.

                                                                                    Low Development Case  2               High Development Case  3
                                                                              Estimated                               Estimated
                                                                              Federal Costs      Percent of          Federal Costs      Percent of
                                          Federal Assistance Programs             Billion)       Federal Costs          Billion)        Federal Costs

                                          Sewers and wastewater treatment         .70               29                    2.03               34
                                          Water supply                            .40               16                    1.13               19
                                          Roads, bridges, causeways               .86               35                    1.50               25
                                          Disaster relief                         .25               10                      .73              12
                                          Flood insurance                         .15                 6                     .45                7
                                          Shore protection, maintenance,
                                           flood control                          .10                 4                     .21                3

                                          Total                                 $2.46               100                   $6.05              100

                                          IAugust 1980 National Park Service Inventory of Undeveloped, Unprotected       Barrier Islands;   in this
                                          revision of the April 1980 Inventory, total acreage classified as undeveloped and unprotected was
                                          reduced by about 200,000 acres. (See text.)
                                          2Assumes development related to the remaining 90,000 acres of undeveloped uplands in the August 1980
                                          Inventory.
                                          3Assumes development related to all remaining undeveloped acreage (about 277,000 acres of uplands,
                                          wetlands, and interior waters) In the August 1980 Inventory.

                                          Source; H. Crane Miller, "Federal Policies in Barrier Island Development," OCEANUS, Vol.          23, No. 4,
                                                  Winter 1980-81, Woods Hole Oceanographic institution.
                               Ln
                               0
<pb n="61" />

            considerations.

                 Federal policy to protect the barrier islands must evolve
            from the starting position of current programs weighted by
            subsidy and financial assistance toward development, but
            somewhat offset by federal standards and regulations that
            attempt to mitigate known hazards and environmental problems.

                 Undeveloped, noncontiguous barrier islands present the
            greatest range of opportunity for protecting and preserving
            the islands: (1) by regulation of access; (2) by withdrawal
            of federal subsidies; and (3) by public acquisition. The
            opportunity to protect is greatest before development begins;
            enforcement of strong federal policies on issuance of bridge
            permits could effectively preclude extensive development and
            protect the noncontiguous islands without public acquisition.
            Each subsequent stage of development diminishes the potential
            effectiveness of federal, state, and local regulations and
            increases the federal financial assistance and subsidy to the
            community that would be required to mitigate or to "correct"
            adverse conditions. Hence, a critical focal point for a
            federal protection policy toward the remaining undeveloped
            barrier islands lies with the undeveloped, noncontiguous
            barrier islands.

                      Protecting Noncontiguous Barrier Islands

                    The critical focal point for a federal protective
                    policy toward the remaining undeveloped, noncontiguous
                    barrier islands is road, bridge, and causeway access.

                 Low-lying and vulnerable to complete inundation from
            storm surge, assaulted by wave action, storm scour, long-term
            erosion, as well as by high winds, barrier islands can be
            hostile environments for human settlements.     The natural
            dynamics of barrier islands, particularly on the ocean front,
            -directly oppose the human need for stability   to protect
            property. Thus, a federal protective policy     toward the
            remaining undeveloped, noncontiguous barrier    islands would
            logically seek to retain the islands in their natural
            condition, and to prevent or inhibit development. Taking
            effective action before development begins can make the
            difference between a protection policy that is both
            cost-effective and environmentally-effective, or a policy
            that espouses protection but is coupled with development that
            inex.orably draws increased federal involvement and cost.

                 The experience of the study communities demonstrates   that
            without road access little or no development took place.

           56
<pb n="62" />

             With road access the opportunity to develop opened, and
             development followed. Once a commitment was made to a bridge
             or causeway, whether funded privately, locally, or by the
             state, and once development reached a level wherein issues of
             safety, environmental degradation, and public health became
             paramount, federal involvement was virtually foreordained and
             politically irresistible. The scenario was repeated on the
             Outer Banks, at Dauphin Island, at South Padre Island, and is
             in process at St. Simons Island. The key is access.

                     A Federal protection policy will be enhanced by
                     continuing the historic federal position of not
                     participating in the initial costs of barrier island
                     access and other urban infrastructure.

                 Until the current federal subsidy programs were enacted
             in the post-World War II era, particularly during the decade
             of the 1970s, initial development costs on barrier islands
             were borne by private interests, local or state governments,
             or combinations thereof. This was the case in each of the
             study communities which had acquired bridge or causeway
             access: Kil-l Devil Hills and Nags Head, St. Simons Island
             and Sea Island, Pensacola Beach, Dauphin Island, and South
             Padre Island. Local or state revenue bonds, land sales,
             private capital, or other financing measures were used to
             finance the initial access and urban infrastructure required
             to support development. The lack of federal assistance in
             those years was not a constraint; building costs were lower
             than today and building requirements not as stringent.

                 The amount, density, and types of development in the
             study communities and prevalent along the Atlantic and Gulf
             of Mexico coasts could not have taken place without bridge,
             causeway, and road access. Except for very limited amounts
             of exclusive development accessible only by boat or private
             airplane, development on the barrier islands is characterized
             by the  ease of access by automobile.

                     Development of most undeveloped, noncontiguous barrier
                     islands could be effectively regulated if
                     bridge/causeway permits were (1) denied or (2) granted
                     subject to enforced federal standards and no federal
                     subsidization.

                 Since each bridge/causeway complex that crosses navigable

                                                                          57
<pb n="63" />

           waters of the United States is subject to a bridge permit
           from the U.S. Coast Guard, issuance of bridge permits has
           played a pivotal role in the development of the barrier
           islands. Federal regulatory authority over bridge permits is
           uniquely strong, by virtue of the navigation servitude under
           the Commerce Clause of the Constitution of the United States.
           Denial of a bridge permit would effectively preclude most
           extensive development of barrier islands. Conditions on
           Dauphin Island since Hurricane Frederic are dramatic evidence
           of the dependence of most beach resort development upon
           bridge and causeway access. However, permit denial may well
           be a politically unpalatable or untenable option, in which
           case a grant of permit subject to federal standards and
           conditions could also be effective in controling development.

               Federal policy on bridge and causeway permits could
           require compliance with federal standards and permit
           conditions, and prohibit federal cost sharing of
           construction, improvements, repairs, or replacement except
           under stringent exceptions.

               Federal standards now require elevation of a prestressed
           concrete roadway across wetlands and a single high span
           across the Intracoastal Waterway. The capital costs of
           building this type of bridge/causeway system currently range
           from $10 - $30 million per mile. Since the noncontiguous
           islands range an average of 2.5 to 5.3 miles from the nearest
           mainland road system on the Atlantic and Gulf of Mexico
           coasts respectively, the costs of access by bridge or
           causeway add several tens of millions of dollars to any
           potential development. Imposing bridge/causeway costs on the
           private sector would greatly affect the economics of barrier
           island development, making much of it on the noncontiguous
           islands economically infeasible. Few municipalities or
           states would fund such facilities at such costs without
           federal funding assistance or assurance of revenues from the
           resort far greater than could be generated by the typical
           beach resort with single family cottages, motels, and a
           seasonal, tourist-dependent economy. Relatively few of the
           remaining noncontiguous islands would be suitable for
           intensive, high-rise development, gambling facilities a la
           Atlantic City, or other intensive, revenue-producing
           development. Thus, in a great majority of the cases,
           imposition and enforcement of stringent federal standards for
           bridge/causeway design and construction and withdrawal of
           federal highway and bridge funds could be effective as a
           protective policy.

               It is self-evident that bridges and causeways are the

          58
<pb n="64" />

            necks of the funnels leading to and from the barrier islands.
            From a regulatory perspective, control of the neck of the
            funnel can effectively control whether development takes
            place initially.

                     Regulating Contiguous Barrier Units

                 Along the Atlantic and Gulf Coasts there are about
            139,000 acres of undeveloped uplands, wetlands, and interior
            waters contiguous to totally or partially developed areas.
            These contiguous units -- by definition -- are near existing
            roads and urban infrastructure. Recent estimates by Sheaffer
            &amp; Roland, Inc., show existing roads within an average of 0.4
            miles of the undeveloped lands along both coasts, with more
            than 40 of the 85 units surveyed having access immediately
            adjacent to or through the undeveloped property. These
            conditions imply effective loss of the federal regulatory
            tool potentially most effective to control development on the
            barriers -- control of bridge and causeway access.

                The study communities show a propensity for development
            to the greatest extent possible, pushing road systems, water
            supplies, and wastewater management to their limits. Federal
            involvement tends to increase with population densities and
            with each program that increases the capacity of individual
            systems to accommodate growth. Enlargement of a road system
            to accommodate traffic induces housing development, which in
            turn must be accommodated with increased water supply and
            wastewater management capacity. Ensuing development tends to
            exceed the built capacity of the infrastructure, leading to
            another round of expansion, upgrading, replacement, and
            reconstruction. Where the first round of development was
            characterized by single family dwellings, the second round
            tends to be characterized by higher density uses -- motels
            and condominiums, c.f., Pensacola Beach, Florida. Each
            successive round increases potential federal costs under
           .current programs.

                   on undeveloped contiguous barrier units, federal
                   regulations will generally not prevent or inhibit
                   development in the long term, but can reduce or
                   mitigate some potential adverse consequences.

                in the case of contiguous barrier units, regulation
            implies minimum standards for development, e.g., property
            elevation requirements of the National Flood Insurance
            Program, and temporary curtailment of development where
            health, safety, or other standards are not met, e.g, septic

                                                                       5@
<pb n="65" />

            system moratoria at Dauphin Island and St. Simons Island.
            Emphasis, nevertheless, is upon development; exercise of the
            police power to regulate building practices and land uses is
            not intended to and will rarely prevent development.

                On the noncontiguous barrier islands, imposition   of
            federal bridge standards and removal of federal highway and
            bridge funds could effectively prevent development of most of
            the noncontiguous islands. The rationale is predominantly
            economic -- added capital costs of access, built to federal
            standards without federal subsidy, will make most beach
            resort developments economically infeasible. In the
            contiguous areas that powerful rationale has been removed to
            a large extent -- by definition, access and other urban
            infrastructure to support development are near at hand,
            reducing substantially the costs necessary to initiate
            development in those areas.

                What of the added costs imposed by regulations?
            Regulations such as those of the National Flood Insurance
            Program unquestionably add to the capital costs of insurable
            structures to the extent that local building practices do not
            meet the Program's minimum standards. However, the
            experience of.the Program shows that its current regulations
            do not prevent development, and that in many areas people's
            expectations with respect to beach houses and oceanfront
            construction includes structures elevated on pilings, if not
            for reduced flood hazards, then for such aesthetics as a
            clear view of the ocean. As the Program gains more
            experience with the dynamics of coastal systems--high storm
            surge, wind-driven waves, storm scour, long-term erosion,
            high winds, and battering by debris -- its regulations will
            necessarily become more stringent. But the added costs
            imposed by the regulations cannot be reasonably expected to
            prevent development. They are not designed to do so.

                In the case of regulations requiring elevation of
            structures to the wave crest level in coastal high hazard
            areas, it has been shown that the most or all additional
            capital costs to comply can be recovered by reduction of
            flood insurance premiums and by reduced average annual flood
            losses. For instance, elevation of houses to the wave crest
            level will increase piling, bracing, and other costs of
            oceanfront properties, but will result in significantly lower
            flood insurance premium costs than would have to be charged
            actuarially if the houses were elevated only to the 100-year
            storm surge level. Moreover ' the added capital costs of the
            flood insurance regulations (e.g., $3,000 - $8,000 estimated
            for a 2,000 sq. ft., one story, single family house,

            60
<pb n="66" />

           depending on the foundation and bracing system chosenlo
           de,crease in significance as property values escalate.

               From a national perspective, the importance of the
           minimum federal standards is their potential of reducing
           average annual flood loses. Properly managed, barrier
           islands can play an important role both in contributing to
           reduction of flood losses and in the federal policy of
           encouraging wise use of the nation's flood plains. Federal
           standards are an integral part of the effort to minimize
           flood losses to the extent practicable and to restore and
           preserve the natural and beneficial values served by flood
           plains. If the goal "to achieve an absolute decline in
           communities' average annual fliod losses due to unwise flood
           plain use" is to be achieved,   federal standards and
           regulations, such as those of the National Flood Insurance
           Program are essential. But it should also be recognized that
           those standards and regulations will not be adequate alone to
           achieve "an absolute decline in communities' average annual
           flood losses".

               Implementation of federal regulations such as those of
           the National Flood Insurance Program can significantly reduce
           flood losses below those that would be experienced if the
           standards were not applied. Throughout the study communities
           there was strong evidence of the positive impact of the
           elevation requirements of the National Flood Insurance
           Program. As no other program, the National Flood Insurance
           Program has succeeded in making communities, financial
           institutions, building officials, developers, and consumers
           aware of flood hazard potentials. However, design to the
           100-year storm event can only reduce building losses for
           storms up to the design and safety limits of the structures.
           For example, a house built in a coastal high hazard area and
           elevated to the wave-crest level associated with a 100-year
           storm (as much as 55 percent higher than the storm surge
           level associated with such a storm) should be protected
           against wave forces to that height. But assuming a 50-year
           life expectancy for a coastal home, there is a relatively
           high possibility of a greater storm during that period
           (1-in-4 possibility of a 200-year event, that is, slightly
           greater than Hurricane Camille). A storm that exceeds the
           design limits of the structures then can produce catastrophic
           results.

               The problem presented by the undeveloped contiguous
           barrier structures is that their development, even to federal
           standards, increases the potential for catastrophic loss in
           storms that exceed the design and safety limits of the

                                                                      61
<pb n="67" />

              structures. In addition, their development implies losses to
              their supporting urban infrastructure, probably from storms
              of lesser magnitude than the 100-year storm. Such losses may
              more than offset the otherwise beneficial effects of the
              regulations, and lead to the conclusion that the regulations
              alone are not adequate to produce an absolute decline in
              average annual flood losses.

                     Removal of federal subsidies for contiguous barrier
                     units development can be expected to inhibit but not
                     prevent development of those contiguous areas.

                 The availability of federal subsidies for access and
              urban infrastructure can enhance any development, and in
              certain instances can be the difference between an
              economically feasible project or one that is not. Removal of
              the federal subsidies will have the effect of shifting
              significant portions of development costs from the federal to
              the state, local, or private sectors, and could radically
              alter the economic feasibility of a given project. This will
              be especially so for the undeveloped noncontiguous barrier
              islands.

                 The undeveloped contiguous barrier structures present a
              different problem. In some instances, such as the 411-acre
              undeveloped Epstein tract in Nags Head, roads and municipal
              services run through the property, and major capital costs
              for infrastructure have already been expended. In other
              communities, the road and water supply system may need only
              to be extended, e.g., the north end of South Padre Island, or
              the north end of St. Simons Island. In such instances the
              removal of federal subsidies may inhibit or curtail
              development for a time, but is not expected to be a
              protective device in the long-term. Because these areas are
              so near to access and urban infrastructure, the capital costs
              of extending these services for development purposes are
              significantly less than for the initial development of a
              noncontiguous area. In most such instances it will be
              economically feasible for developers to provide the local
              streets and to extend water and electrical service to permit
              development. Streets will in most cases be donated to the
              local government in return for the local government's
              assumption of the costs to repair and maintain the roads.

                 Thus, the principal effect of removal of federal
              subsidies on the undeveloped contiguous barrier structures is
              expected to be a reduction in federal costs for expansion,
              upgrading, replacement,, and,reconstruction of access and
              urban infrastructure. But because development can be

              62
<pb n="68" />

          expected to continue despite withdrawal of the federal funds,
          increased disaster relief and flood insurance costs are
          anticipated unless these programs are modified and their
          hazard mitigation aspects strengthened.

                   Benefits of an Acquisition Policy

                 A federal protection policy will be strengthened by
                 authority and appropriations to acquire both
                 undeveloped contiguous and noncontiguous barrier
                 islands. Public acquisition of the islands is
                 cost-effective, and the surest means to protect
                 barrier islands from inappropriate development.

              The estimated costs of current federal development
          policies for the remaining undeveloped barrier islands range
          from $25,800 - $26,400 per acre for the low acreage to
          $43,700 - $46,700 for the high acreage. In contrast, the
          acquisition costs of the National Seashores included in this
          study ranged from a low average purchase cost per acre of
          $75.35 at Cape Hatteras between 1950 and 1954, to $4,950 per
          acre at the Gulf Shores National Seashore between 1970 and
          1974. Using an average acquisition cost of $5,000 per acre,
          Sheaffer, Miller, and Rozaklis estimated that the cost to the
          federal government to continue its current development
          programs on the undeveloped barrier island would be more than
          five times greater than the costs of public acquisition of
          those islands. (See Table 14.)

              Under a public acquisition program, priorities can be
          divided generally between contiguous and noncontiguous
          barriers. In many, if not most, instances, first priority
          should be given to purchase of undeveloped contiguous units,
          based on such objective factors as physical characteristics,
          resource values, and threats to those resource values
          (imminent development, pollution, loss of habitat, loss of
          open space, etc.). Moreover, noncontiguous units are less
          likely than contiguous units to be developed without federal
          bridge permits and federal assistance for bridge/causeway
          access and other urban infrastructure.

              A public acquisition program on the noncontiguous islands
          would not be required, if the federal government chooses to
          adopt a more stringent bridge permit program than is now in
          force. if such regulations withstood inevitable judicial
          challenge, extensive development of the undeveloped
          noncontiguous barrier island would be effectively precluded
          and acquisition could be directed to contiguous barrier
          islands.

                                                                      63
<pb n="69" />

                       0)

                                  Table 14. Comparison of Estimated Potential Costs of Public Purchase of Barrier Islands Versus
                                            Estimated Potential Costs of Current Federal Program to Support island Development

                                  Policy Option               Land in April 1900 Inventory       Land in August 1980 Inventory
                                                              Low Case           High Case2      Low CaseI          High Case2
                                                                     J$ Billion)                            Billion)
                                  Estimated cost of
                                  public purchase               .80                 2.02                .46          $1.16

                                  Estimated cost of pursuing
                                  current federal programs    $4.13               $11.20              $2.46          $6.05

                                  Ratio of program costs
                                  to public purchase costs     5.2:1               5.5:1               5.3:1           5.2:1

                                  1Low case cost estimates based on purchasing or developing only uplands. The National Park
                                  Service's April 1980 inventory included about 160,000 acres of undeveloped, unprotected
                                  uplands; its August 1980 inventory included about 90,000 acres in this category.
                                  2High case estimates based on purchasing or developing both uplands and wetlands. The April
                                  1980 inventory Included about 480,000 acres of uplands, wetlands, and interior waters; the
                                  August 1980 Inventory included about 277,000 acres in this category.

                                  Source: H. Crane Miller, OCEANUS, cited in Table 13.
<pb n="70" />

               Judicial challenge would pit the federal government's
           authority to withhold bridge permits pursuant to the
           navigation servitude under the Commerce Clause against
           barrier island property owners' Fifth Amendment rights
           against the taking of their property without just
           compensation. Should property owners prevail, a public
           acquisition program on noncontiguous islands threatened with
           development would be a cost effective course and equitable to
           property owners. As with any form of regulation, public
           acquisition before development takes place would be the most
           cost effective action. At each incremental stage of access
           and urban infrastructure development, adjacent land values
           will increase. The government would get the most for its
           money before such development takes place.

               In national terms the cost of a public acquisition
           program would be small compared to the federal costs of
           participating in barrier island development. Present "bulk"
           land purchase costs for the national seashores included in
           the study averaged less than $5,000 per acre. Agencies that
           rely more on voluntary land sales and less on condemnation
           procedures than the National Parks Service find average
           acquisition costs in coastal areas less than $5,000 per acre
           in 1980 dollars. These averages include parcels that may be
           as high as $85,000 per acre, but which represent small
           portions of the total acreage to be acquired; as acreage is
           subdivided in anticipation of development, the cost per acre
           increases.

               The per-acre cost of acquiring undeveloped land in both
           contiguous islands and noncontiguous barrier units is
           estimated to fall in a range of $5,000 - $10,000 per acre
           (1980 dollars). When applied only to the upland portions of
           contiguous units, the estimated acquisition costs are $275
           million to $550 million, and for the noncontiguous islands,
           .$185 million to $370 million. Total acquisition costs for
           all contiguous and noncontiguous undeveloped upland acreage
           on the barrier islands would range from an estimated $460
           million to $920 million. If the history of National Seashore
           acquisition and the increase of coastal land values is any
           precedent, costs in the range of $5,000 - $10,000 per acre
           will be deemed sound and inexpensive investments not even 10
           years from now. Not only would they be inexpensive, but they
           would also be "repaid" in reduced or avoided federal
           subsidies and disaster relief expenditures.

               The study showed that the federal government
           characteristically incurs costs on the barrier islands to

                                                                      65
<pb n="71" />

            repair, improve, enlarge, upgrade, reconstruct, or replace
            bridges, roads, causeways, water supply and distribution
            systems, wastewater treatment systems, and flood and erosion
            control structures, or to provide disaster assistance and to
            subsidize flood insurance. An acquisition program of both
            contiguous units and noncontiguous units would effectively
            avoid or reduce those costs, and in that respect could be
            considered self-liquidating.

                What of the impacts of federal land acquisition on land
            values in adjacent communities? Acquisition of the
            noncontiguous barrier islands should have little, if any,
            measurable impact on land values in adjacent mainland or
            island communities under certain conditions. Development in
            the adjacent communities can be expected to continue without
            dependence on the noncontiguous islands so long as there is
            no bridge or causeway access to the islands, and so long as
            full development in a broad regional context has not been
            reached or approached. Other factors, especially improved
            urban infrastructure, will have a more immediate effect on
            adjacent community land values than public acquisition of the
            noncontiguous islands.

                To the extent that adjacent areas are totally or
            significantly developed, public acquisition of undeveloped,
            contiguous units would be expected to increase the value of
            adjacent lands. Examples were found in the study at
            Pensacola Beach, Florida, where lease values were reported to
            have increased when land on both sides of the City was
            acquired for the Gulf Islands National Seashore. In an area
            such as the Outer Banks of North Carolina, if the Currituck
            National Wildlife Refuge and the 411-acre Epstein tract in
            Nags Head were publically acquired, land values in the
            adjacent communities would be expected to increase. Under
            those circumstances, the towns of Nags Head, Kill Devil
            Hills, Kitty Hawk, and Southern Shores would be close to
            .fully developed, and land prices would escalate accordingly.

                     Conclusion

                "Protection" measures such as regulations and removal of
            federal subsidies for access and urban infrastructure may
            forestall some barrier island development but generally will
            not prevent development. Among all regulations only a
            strengthened bridge permit program, coupled with removal of
            federal bridge construction funds, is likely to protect
            barrier islands from development, and then only with respect
            to noncontiguous islands. Regulations on access, urban
            infrastructure, and building requirements, and removal of

            66
<pb n="72" />

           federal subsidies are important short-term measures; but
           their limitations as means to protect barrier islands need to
           be recognized.

               If protection of the undeveloped barrier islands is to be
           a federal goal and is to be effectively achieved, a program
           of regulation, removal of federal subsidies for development,
           and public acquisition would need to be authorized and funds
           appropriated for that purpose. Such a combined program is
           the only effective way to protect the islands, and, through
           acquisition, the only fair way to compensate individual
           barrier island property owners for taking their right to
           develop the islands. Of all the available measures, the
           surest means to protect the undeveloped barrier islands is
           public acquisition.

                                                                     67
<pb n="73" />

                                      REFERENCES

           1.  John R. Sheaffer and Louis Rozaklis, "Barrier Islands
               Purchase: A Cost-Effective Approach to Management,"
               testimony before House Committee on Interior and Insular
               Affairs, Subcommittee on National Parks and Insular
               Affairs, on HR 5981, March 27, 1980. Also, statement of
               John R. Sheaffer, H. Crane Miller, and Louis Rozaklis
               before the Committee on Energy and Natural Resources,
               U.S. Senate, concerning S. 2686, June 12, 1980.

           2.  H. Crane Miller, "Federal Policies in Barrier Island
               Development," Oceanus, Vol. 23, No. 4, Winter 1980-81,
               Woods Hole Oceanographic Institution.

           3.  Interagency Agreement for Nonstructural Damage Reduction
               Measures as Applied to Common Flood Disaster Planning and
               Post-Flood Recovery Practices, 1980.

           4.  The Department of the Interior undertook a major review
               of barrier island development in 1977, and has produced
               an environmental impact statement and report, entitled in
               draft "Alt6rnative Policies for Protecting Barrier
               Islands Along the Atlantic and Gulf Coasts of the United
               States." Bills pending in the 96th Congress (HR 5981 and
               S 2698) dealt with barrier island protection.

           5.  Sally S. Davenport, "Development on Texas Barrier
               Islands ... Does It Cost The Taxpayer More?", testimony
               before House Committee on Interior and Insular Affairs,
               Subcommittee on National Parks and Insular Affairs,
               March 27, 1980.

           6.  Draft Supplement to Environmental Impact Statement for
               Preferred Alternate Location for a Fleet Ballistics
               Missile Submarine Support Base at Kings Bay, Georgia,
               Primary Document 1980, at pp. 5-129, 5-133, and 5-138.

           7.  Sierra Club et al. v. Hassell, No. 80-7565, U.S. Court  of
               Appeals, 5th-Ci-rcuit (Feb. 13, 1981).

           8.  Sheaffer and Rozaklis, supra note 1.

           9.  Miller, supra note 2.

           10. Federal Emergency Management Agency, Elevating to the
               Wave Crest Level, (Government Printing office,

          68
<pb n="74" />

If,
              Washington, D.C., 1980).
1(-       11. Interagency Agreementr supra note 1.

                                                                    69
<pb n="75" />

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