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'TOP co, Business Prospects Under Coastal Zone Management ris of tot WASHINGTON, D.C. March, 1976 HT 392 B11 1976 U.S. DEPARTMENT OF COMMERCE National Oceanic and Atmospheric Administration SPA Office of Coastal Zone Management to Xrmosp"" Business Prospects Under Coastal Zone M int anageme "44ENT O@ A report prepared by: REAL ESTATE RESEARCH CORPORATION Chicago, Illinois WASHINGTON., D.C. March 1976 This report was prepared under contract to the U.S. Department of Commerce U.S. DEPARTMENT OF COMMERCE Elliot L. Richardson, Secretary 1P National Oceanic and Atmospheric Administration Robert M. White, Administrator Office of Coastal Zone Management Robert W. Knecht, Director Business Prospects Under Coastal Zone Management I NATURE OF STUDY The Office of Coastal Zone Management of the V.S. Department of Commerce has contracted with Real Estate Research Corporation for the conduct of a brief, pre- liminary analysis of the potential economic impacts of coastal zone management on development activity and business prospects -- with reference to the California Coastal Plan as an example. The study focuses on many of the concerns of greatest interest to business and real estate interests - the effects of coastal zone manage- ment on public expenditures (and therefore taxes), land values, investment oppor- tunities and business profitability. It also considers how these impacts affect the ultimate consumer -- the citizen whoseeks a high quality of life in the coastal environment. All 30 coastal states and 3 U.S. territories have coastal zone planning programs underway at this time. While the primary purpose of these plans is rational man- agernent Of coastal resources, it is recognized that the implementation of the plans.will have economic consequences. Ecoremic impact studies to date regarding coastal zone management have either been mainly theoretical or they have focused on costs without sufficient attention to potential economic benefits. Concurrent with this study by RERC is a complementary study by the Urban Land Institute. ULI's study is a combination of conceptual exposition and literature search. This study by RERC also develops conceptual bases for identifying and quantifying economi.c impacts of coastal zone manag;ment. Moreover, RERC has identified specific impacts for selected major facets of the Qalifornia Coastal Plan. The major focus of this study has been on three significant economic impacts (1) public investment in facilities and services (with and without the Plan), (2) the Plan's effect on land values, and (3) economic development - e.g., its impacts on employment, business investment and profitabilityand construction activity. These impacts were selected because they account for'the preponderance of poten- tial change (both positive and negative) in business prospects that might result from implementation of the policies and programs outlined in the California plan. Quantifiable costs and benefits will reach the ultimate consumer in the tax burden he or she bears, in the value of land and buildings for homes or businesses, in income gained or lost from employment or investment in the coastal zone and in pric.es paid for consumer goods and services produced in the coastal zone - marine and agricultural produce, forest productst other manufactured goods and retail or REAL ESTATE RESEARCH CORPORATION -2- Business Prospects Under Coastal Zone Management office services. However, consumers will also reap the more "intangible" benefits of a more attractive and healthy environment, less crowding, and increased access to recreational opportunities. Such benefits are, noted where appropriate in this report. Howevert its major focus remains on the economic impacts of plan imple- mentation on property values, taxation, development activity, and business prospects in general . These impacts are primarily short term in nature - their effects will be felt immediately after the plan's policies are implemented and for some years thereafter. In completing this study, RERC has relied heavily on: (1) RERC research on economic impacts, especially The Costs of _Sprawl (2) selected interviews with various knowledgeable people regarding coastal planning and development; (3) review of readily available economic studies on coastal zone management; (4) study of the California Coastal Plan; and (5) participation in a seminar entitled "An Exploration of the Economic Benefits of'Coastal Zone, Management" sponsored by the Office of Coastal Zone Management and the Urban Land Institute (January 26, 1976). RERC appreciates the excellent cooperation of everyone contacted in the course of this brief study. While valuable data and insights -were shared, this report is the responsibility of RERC. 11. SUMMARY OF FINDINGS AND CONCLUSIONS The preparation and adoption of coo stal zone plans have only limited economic effects; the true impact of such plans can only be estimated when specific imple- mentation programs -- capital improvements, regulations, incentives, public acquisition, persuasion - are detailed. In California, Coastal Zone'Planning is undertaken by many jurisdictions each with long standing experience in zoning, subdivision regulation and land use planning. Implementation of plan objectives would be a local responsibility, and would largely rely on existing tools. These activities are recognized by the courts and most citizens as legal, legitimate exercises of the police and other powers to achieve public benefit. Thus, many of the policies and programs contained in The California Coastal Plan are likely to be implemented with or without the Plan's adopiTion. In ;valuating its economic impact, a key question is to whai extent does the Coastal Plan result in changing conditions or business prospects tgat would be different from what would occur anyway under local plans, regulations, and programs. REAL ESTATE RESEARCH CORPORATION -3- Business Prospects Under Coastal Zone Management Benefits and Beneficiaries Benefits of coastal zone management will accrue to everyone in the zone as well as most everyone elsewhere in the state and country. These 6enefits will 6e of various kinds and they will occur in different ways to different degrees. There will similarly 6e costs' to 6e 6orne, 6ut this study is focused on 6enefits. The following major categories of 6eneficiaries can 6e identified: 0 Owners of property directly affected 6y implementation devices 0 Neigh6oring property owners 0 Competition -- other properties that might 6e morketa6te for the same use 0 Owners of 6usinesses whose productivity or market attractiveness would 6e enhanced 6y plan policies 0 Government at al I levels 0 The general pu6lic Potential types of 6enefits are numerous. Benefits of coastal zone management are the positive changes which occur in the nature, scale, distri6ution, and pace of elements such as the following: 0 Production (including manufacturing, agriculture, mining, fishing) 0 Utility services and costs 0 Business sales, costs, and prof its 0 Employment opportunities 0 Population and la6or force 0 Housing demand and supply 0 Construction 0 Financing and investment 0 Property values and transactions REAL ESTATE RESEARCH CORPORATION -4- Business Prospects Under Coastal Zone Management 0 Government costs and revenues 0 Education and recreation opportunities Externalities (non-market factors, e.g., aesthetics) Potential Benefits of Coastal Zone Management Planning and managing the coastal zones of the United States essentialry consist of the use of foresight in cooperatively determining how to both preserve our precious resources and accommodate the needs of an expanding population and economy. To achieve this balanced purpose entails many trade offs which include some short run positive and negative effects but for the most part are redistributional effects. Long run benefits from enhanced productivity of renewable resources -- fisheries, agriculture, forests -- would also be realized. Potential economic benefits of the coastal zone plan policies can have the follow- ing attributes: 0 They can be "one time only" or "recurring" 0 , They can cause net increases in economic activity or merely shift its benefits among individuals or groups 0 Costs may be incurred in their attainment e.g., expenditures for shore- line restoration or pollution control 0 Secondary "spin-off" effects may be felt both positive and negative, depending on the nature of the policies and the economic activities affected The following list of benefits of coastal zone planning and management is similar to the benefits of most state and local planning activities: � Reduced cost of new development � Reduced cost of transportation � Better preservation of natural environment � Better preservation of existing buildings REAL ESTATE RESEARCH CORPORATION -5- Business Prospects Under Coastal Zone Management 40 Less pollution 0 Less congestion 9 Higher quality development 0 Better utilization of sunk investments � Better fit of supply and demand 0 Greater awareness of needs and opportunities � Less uncertainty regarding future potentials � Improved possibilities for effective actions based on understanding and consensus regarding goals Potential economic benefits can appear as increased productivity, higher sales, more jobs, greater demand for facilities and services, increased property values" lower taxes, reduced or stabilized consumer prices, and heightened satisfaction with one's physical environment. Prudent coastal zone planning, therefore, results in a balance between conservation of irreplaceable natural resources and the needs--job creation, housing, recreation, and shopping--of an expanding population/economy * While some coastal zone actions will result in net gains or net losses for the local economy, in most instances the short-term effects of the plan are redistributional. Some lost expectations will undoubtedly be encountered, but gains elsewhere should offset these losses. It is expected that in those cases, if any, where regulations would actually result in a legal ly- determined taking, the regulations would be declared void or compensation paid. Reduced property taxes could help offset severe losses. Planning stabilizes erratic 11swings" in expectations because it results in less uncertainty in future prospects of land investment. While there may be short term lags as the economy adjusts to changes induced by the Plan, long-run benefits are likely to balance or exceed costs. For example, some industrial plants may not be built in the coastal zone, in part because environmental protection regulations may make them financially in- feasible. They would yield an inadequate rate of return on equity when compared to alternative opportunities. However, that some development proposal may be equally unattractive outside the coastal zone. Moreover, lower financing costs or improved marketing outlook could result.in a decision to ultimately go ahead with a deferred project despite the costs of complying with coastal zone regulation. These same regulations will result in heightened opportunities in coastal dependent economic act ivi ties- -tourism, recreation, agriculture, fisheries, and forestry. REAL. ESTATE RESEARCH CORPORATION -6- Business Prospects Under Coastal Zone Management Public Investment With and Without the Plan The Plan holds the promise of considerable savings in public capital investment and maintenance costs for roads, utilities, and other public facilities. If adopted, new development would be encouraged to make maximum use of available system capacities within existing communities, or locate adjacent to already built-up areas. Fewer miles of new pipeline and urban roads would be extended into rural areas. In a recent study for three federal agencies prepared by Real Estate Research Corpora- tion, entitled The Costs of Sprawl, more compact development was estimated to save as much as $1,700 per dwelling unit or more in public infrastructure investment over convention density sprawl, as shown-in Exhibit I . EXHIBIT I INFRASTRUCTURE SAVINGS ATTRIBUTABLE TO BETTER PLANNED, MORE COMPACT DEVELOPMENT Community Development Prototypes Capital Cost per Unit Presented in.The Costs of Sprawl Net Density Publicly Provided Infrastructure (collector and arterial streets, utility lines) 1. Plann d Mix 6. 9 units/ acre $ 900 (planned new community with (40% single-family single-family homes, townhouses detached) and apartments) II. Combination Mix 6. 9 units/ acre $2,789 (part conventional development (4(Wo single-family and part PUD -- same housing detached) mix as in I) Ill. Sprawl Mix 6. 9 units/ acre $3,796 (conventionally developed (40% single-family suburbs -- same housing mix) detached) IV. Low Density Planned 4. 3 waits/ acre $ 998 (planned new community of (10096 single-family single-family homes) detached) V. Low Density Sprawl 3. 3 units/ acre $4,488 (suburban single-family (1009A single-family development) detached) VI. High Density Planned 13. 6 units/ acre $ 835 (planned community -- mainly (10% single-family apartments) detached) Sources: Real Estate Research Corporation The Costs of Sprawl: Case Studies and Further Research, Table IS. Prepared for the Council on Environmental quality and Department of Housing and Urban Development. Unpublished. Data have been updated to reflect 4th quarter 197S costs. REAL ESTATE RESEARCH CORPORATION -7- Business Prospects Under Coastal Zone Management For purposes of the analysis presented herein, we assume current California "trend" development to be comparable to the "low density sprawl" prototype used in the Costs of Sprawl. More compact development would be represented by "combination mix," consisting of a mix of conventional and planned unit development. The latter is by no means the "least cost" alternative; however, it is unlikely that future California coastal development will be predominantly in large scale planned new communities where developers would bear all the costs of collector street and utility improvements. Comparing trend development with a possible future more compact development form (Type V versus Type 11) results in a savings of about $2,000 per dwelling unit for the latter type. To get a sense of how substantial these public cost economies could be, we made some reasonable assumptions regarding the nature of future housing construction in the Coastal Zone, and then applied the above stated cost savings: 0 30% of future coastal zone development would correspond to the "combina- tion mix" described above ($2,789 per unit), enjoying the combined-cost savings of compactness and proper location 0 30% would be in-fill development with minimal public infrastructurei addi- tions or improvements needed. Assume 1/3 of the cost per unit for the "planned mix" type ($300 per unit) for improvements to existing in-place systems 0 30% would be "trend" development ($4,488 per unit) -- provided as they would have been without the Plan. 0 10% would be demand accommodated through rehabilitation of existing structures already serviced with adequate roads and utilities requiring no additional public outlay. The total public capital cost for accommodating 10,000 dwelling units under these conservative assumptions would be $22,731 000, versus $44,880,000 if all future development were of the "trend" type. The savings amounts to $22,150,000 or $2,215 per housing unit. Moreover, if we assume that the construction of public infrastructure is financed with 25 year general obligation bonds at 7% interest, interest payments alone would equal 1. 145263 times the principal amount. Thus, capital cost savings of $22.2 million result in further savings of $25.4 million in interest charges. Savings of $47.5 million (capital outlay plus interest) over -10,000 units equals $4,750per unit compared.to costs under current building trends. The estimated REAL ESTATE RESEARCH CORPORATION Business Prospe ts Under Coastal Zone Management cost of $200 million required to implement the Plan's restoration, regulation and site site acquisition/limprovement programs would be offset by savings in infrastructure capital outlay plus interest' resulting from building 421000 housing units in the Coastal Zone in accordance with the Plan - with minimal urban sprawl and maxi- mum use of existing facilities. Densities would not be radically increased. Sub- stantial privately borne on-site ci rculation and utility system development cost savings could also be realized. Impact of the Plan on Land Values The key determinants of land values' include: 0 Natural site characteristics and environment 40 Man-made stie CAaracteristics and environment 0 Community image 0 Demand for parricular land uses 0 Access Utilities 0 Public facilities and services 0 Taxes 0 Land use and development regulations We estimate that, in general, about 55% of land value is attributable to govern- ment action, with the balance resulting from the actions of the property owner, his or her neighbors, and the general public. Governments influence land values through use or design regulations, improving access, providing public facTlities and services, preserving favorable "images", and through its tax rates and policies. Exhibit 2 shows the different types of government action that impact property values, and their relative importance in determining the overall net effect of coastal zone regulations on land value. Restricting land use options will lower land values of subject properties, but wi I I also transfer any unsatisfied demand to other competi- tive sites not subject to use restrictions. Regulations requiring mitigation of REAL ESTATE RESEARCH CORPORATION EXHIBIT 2 IMPACT OF GOVERNMENT ACTION ON PROPERTY VALUES Impact on Values of Relative Importance of Type of Action Impact on Values of Neighboring or Net Effect on Specific Actions in Subject Property Competitive Properties Property Values -Determining Impac Restrictions on land use Value declines Value rises Redistributional Very important Developer required to make Value declines Value rises Slightly negative Unimportant compared to improvements or pay fees other public actions Resource amenities protected Value rises Value rises Slightly positive to very Very important or restored by government action positive Shore access by the public Value declines Value rises Slightly negative Less important than use I maximized and protected restrictions or amenity %0 protection I Concentrating development If still undeveloped, value Value rises Positive in existing communities declines; if already im. Very important provedv value rises Providing infrastructure, Value rises Values unchanged Positive Important public facilities, and services Tax reduction or deferral Value rises Values unchanged Slightly positive Less important than use for regulatedt restricted, or encouraged uses of restrictions or amenity coastal properties protection Source: Real Estate Research Corporation. _10- Business Prospects Under Coastal Zone Management adverse environmental impacts result in higher development costs but also result in more attractive, desirable sites. Improved access and public facility provision generally impact positively on land values; however, access improvements can have negative effects -- noise, air pollution, or reduced privacy. The California Coastat Plan will be implemented through government action resulting in a loss in development potential (and hence lower profit expectations) for some sites - presently unserviced rural lands, prime agricultural and wooded acreage, areas with development hazards, and parcels with scenic, historic or ecological significance. Recreation and other water dependent uses will be given priority over urban development along. the waterfront. If a market for more intense use exists, the affected parcel will lose value. But in a normal market, the demand for more intense use will be &.a. ferred elsewhere; this is encouraged by plan policies fostering more compact development in already built-up communities. These cities and villages contain numerous sites previously "passed over" as develop- ment spreads. These parcels, and those at the fringe of existing development, will rise in value. The overall net effect of the California plan-on land values will ultimately be positive becovise of better management, improved amenity protection, and reduced uncertainty. Economic Development Impacts The Pion's irn t on employment and other business investment wi I I vary for major industry sectors. The construction industry will suffer from reduced opportunities along the shoreline and in infrastructure development. It will gain from public investment in housing rehabilitation, provision of on-site recreation,' higher quality design and amenity requirements, and more intense use of in-city parcels. Invest- ment and employment potential in agriculture, Fisheries, forestry, tourism, commer- cial recreation, and mass transit facilities will be enhanced through government incentives and regulatory policies. The long range viability and security of these industriies in the coastal area will be protected and encouraged, but the costs of doing business in the Coastal Zone may go up for some industries which must pur- chose more expensive sites and install costly energy conservation, pollution control and design amenities. This added investment stimulates other businesses, but it might also make certain business development or expansion programs financially infeasible. Some industries may therefore choose not to locate in the Coastal Zone as a result of higher costs, but others will be drawn there because of the attractive- ness of the physical s6tting. Exhibit 3 summarizes various types of economic development impacts likely to occur for different sectors. Although California residents and business consumers may have to bear higher costs as buyers, renters, or purchasers of goods and services because of higher land costs (due to reduced REAL ESTATE RESEARCH CORPORATION Business Prospects Under Coastal Zone Management availability of developable sites) and greater production costs (because of regula- tions requiring greater on-site amenities and environmental protection devices) they would benefit from stabilized productivity (and price stability) for wood products, agricultural produce, and seafood, as well as reduced energy consump- tion. Conssumers would also enjoy heightened recreational opportunities in an attractive, uncongested am sphere. Scenic, historic, and ecologically significant areas would be preserved for future generatioris of California residents and visitors. Overall, the economic benefits of coastal zone management in California will, at a minimum, offset non-compensated losses in land values or business opportunity. The positive effects of a more attractive, secure physical environment, combined with greater efficiencies attained from elimination of urban sprawl, will outweigh these losses overall. REAL ESTATE RESEARCH CORPORATION EXHIBIT 3 POTENTIAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POUCYAC71ONS Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies Sectors of the Economy (non-construction) Construction Activity Investm ent/ Profitability to the Consumer Concentrate develop- Housing and urban Employment oppor- Less activity in Somewhat reduced op- Preserve present open ment in already built- development; transpor- timities would be presently rural areas portunities for firms spaces for recreation up areas; regulate tation; agriculture; transferred to other will be offset by supplying materials for use and productive expansion of utilities energy development; locations in the coastal greater opportunities or designing Infra- agriculture (thus and transportation; set commercial and indus- zone in already built-up structure extensions; lowering food prices); criteria for subdivision trial development areas Increased opportunities lower costs of infra- of rural land (59, 60, for others structure 61) Establish priority of Recreation and Depends on labor in- Probably slightly nega- Will Increase invest- Preserve coastal land coastal dependent de- tourism; housing and tensity of alternate tive, as coastal-depen- ment, although perhaps and water resources for velopment over other urban development; uses - could be positive dent uses will not not as intense or profit- those uses which need uses (62) commercial and in- or negative require as much con- able as [email protected] them most dustrial development; struction as other uses dependent uses commercial fishing Protect and enhance Housing and urban Slightly positive Slightly positive Positive Greater security and special coastal com- development value of homes munities (58) Prohibit or restrict de- Housing and urban Nominal net effect-, jobs Nominal net effect; Nominal net effect Minimize risk and velopment in hazardous development; commer- would be created else- housing demand would insurance costs areas (geologic and cial and industrial where be accommodated flooding) (64, 679 70) development elsewhere Regulate signs to Commerce and Nominal Nominal Reduced opportunities More attractive shop- encourage visual industry In the sign industry, ping and driving quality of the coast perhaps offset by other environments (54) forms of advertising Require suff icieut on- Housing and urban Nominal Positive Increases investment; Higher housing costs; site parking (106) development; com- may reduce profitability benefit of parking con- mercial and Industrial venience, less road devilopment congestion Note: Numbers in parentheses refer to policies listed in the California Coastal Plan. EXMBIT 3 POTENTIAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POLICY ACTIONS (conti..eT)-- Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies - Sectors of the Econom (non- construction) Construction Activity Investrnent/ Profitability to the Consumer Relate land use deci- Transportation; housing Slightly negative Negative In areas with Negative in areas with Reduces tax burden of sions to transportation and urban development; system congestion system congestion road construction capacity (101) commercial and Indus- trial development Develop alternatives Transportation Nominal Positive, If decision is Nominal Relieve congestion; to excessive use of made to expand non- lessen travel time coastal roads (103) coastal roads Provide funds for ex- Transportation Positive Nominal Positive Higher taxes possible pansion of coastal zone transit (107) Establish priority of Transportation; housing Nominal Negative Unclear - may have Alternative to families C03 transit over roads (108) and urban development difficulty in receiving without cars; reduced and shipping goods commuting costs and other costs of auto maintenance Limit expansion of Transportation; com- Slightly negative Negative May have difficulty in Protect against noise coastal airports (113) merce and Industry receiving or shipping and hazards goods Develop no new gen- Transl5ortation; coin- Nominal net effect Negative Nominal Protect water resources eral ports; maximize merce and Industry for other uses use of existing ports (1 16, 117) Implement use of solar Housing and urban Positive Positive Positive, assuming im- Higher capital cost of heating/cooling sys- development; energy proved technology housing; lower operating tems (75) development costs; conservation of fuels Restructure utility rates Energy development Nominal Nominal Increased Investment in Lower utility bills; to encourage conserva- means of conserving less energy use tion (71) fuel use EXHIBIT 3 POTUMAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POLICY ACTIONS (continued) Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies Sectors of the Economy (nou- construction) Construction Activity Investment/ Prof itability to the Consumer Remove outmoded Energy development Negative until replaced Positive - will mean Increased investment Return beach to rec- plants from beach area with new facility new construction else- In equipment for re- reational use; greater (80) where placement facilities production efficiency at lower cost Institute energy con- Housing and urban Nominal Slightly positive Positive Higher cost of housing servation measures for development; commer- or commercial/indus- new development (72) cial and industrial trial buildings, lower development operating costs Establish siting and Recreation and tourism; Probably nominal net Slightly positive, given Positive, given more Minimize adverse ef- design criteria for commercial fishing; effect; negative only more costly design re- Investment In safety fects of heavy Indus- power plants, petroleum commercial and indus- if regulations force quirements; negative if equipment; negative if trial development on development, refineries, trial development; plants to locate out- plants must go outside plants must go outside recreation.potential; tanker terminals, LNG energy development side the coastal zone the zone the zone or'If profit- preserve fishing facilities, and other altogether ability is severely opportunities industrial uses (55, 56, reduced 63, 79, 83, 88, 92, 95, 96, 97) Prohibit mining in Mining; recreation Negative Nominal Negative Protect areas for public fragile, valuable or and tourism use; higher cost and highly scenic natural less availability of environments (41) mineral resources Allow mining elsewhere Mining Slightly negative Nominal Positive -- investment Higher cost of mineral in the coast only if in buffers and site resourc es there is no long-term restoration adverse effects on coastal resources (41) Protect mineral reserves Mining; housing and Positive Negative Positive Lower cost of mineral from urban encroach- urban development resources ment (42) EXHIBIT 3 POTENTIAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POLICY ACTIONS (continued) Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies Sectors of the Economy (non-construction) Construction Activity Investm entl Profitability to the Consumer Maintain prime agri- Agriculture; housi)ig Slightly negative in Negative Positive re: agricultural More plentiful food culture through stabili- and urban development that agriculture may productivity resources at stable zation of urban/rural be less labor inten- prices boundaries, zoning, sive than urban uses easements, public acquisition, limitations or subdivision (30, 32, 35, 36, 37, 60) Revise tax laws and pro- Agriculture Nominal Nominal Positive More plentiful food vide other incentives for resources at stable agricultural preservation prices (31) Designate use of re- Agriculture; housing Depends on use Depends on use Depends on use Highest and best use of maining agricultural and urban development designated - probably designated - probably designated - probably site parcels within highly positive positive positive developed areas (33) Restrict conversion of Forestry; housing and Depends on labor in- Negative Positive re: timber Greater availabilit y productive timberlands urban development tensity of alternate productivity and lower cost of wood (38) use products Protect scenic quali- Recreation and Nominal Nominal Slightly negative due Preserve opportunities ties of timberland (38) tourism; forestry to higher operating for hiking, trails, etc.; costs for lumber slightly higher costs industry for wood. products Protect water quality Forestry; recreation Nominal Nominal Slightly negative - Higher cost of wood from adverse effects and tourism higher operating costs products of logging (38) Modify taxation to Forestry Nominal Nominal Positive Lower cost of wood encourage sustained products timber yield (39) EXHIBIT 3 POTENTIAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POLICY AC71ONS (continued) Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies Sectors of the Economy (non- construction) Construction Activity Investment/ Prof Itability to the Consumer Allow for conversion Agriculture; forestry; Positive Positive Positive More efficient use of of non-prime agricul- housing and urban land resources ture and forest sites development where continued use is infeasible or to promote conservation of more productive sites (34) Upgrade commercial Commercial fishing Positive Slightly positive Positive More plentiful fish fishing facilities (5) supplies at lower costs Maintain healthy Commercial fishing Positive Nominal Positive More plentiful fish populations of marine supplies at lower costs organisms (3) Upgrade marine, Recreation and Slightly positive Nominal Slightly positive Increased opportunities estuary, and wetland tourism; commercial for sport fishing and environments (2) fishing commercial fishing Regulate diking, fill- Recreation and Nominal Slightly negative Nominal Preservation of natural ing and dredging in tourism, commercial environment other coastal waters f ishing (16, 17, 18) Study and im' plement Recreation and Slightly positive Nominal Positive Preservation of beaches methods of beach tourism for recreation use and sand replenishment protection of man- (19, 20) made facilities Limit substantial al- Recrqation and Nominal net effect Slightly negative Slightly negative Preserve amenities in terations of the shore tourism their natural state for recreation pur- poses (13S) EXHIBIT 3 POTENTIAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POLICY ACTIONS (continued) Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies Sectors of the Economy (non- construction) Construction Activity Investin ent/ Profitability to the Consumer Restrict thermal dis- Commercial and indus- Nominal Nominal Increased Investment Higher prices for manu- charges and other trial development; in pollution controls; factured goods; protected forms of water pollu- energy development, reduced profitability. marine resources tion (7, 9, 10, 11, 12) recreation and tourism More productive marine Industries Give commercial rec- Recreation and Positive or'negative, Positive or negative, Positive or negative, Preserve public access reation uses priority tourism; housing and depending on whether depending on whether depending on whether to recreational ameni- over other private urban development other potential uses . other potential uses other potential uses ties of the coast development (133, 134) would be more labor would entail larger are more profitable intensive construction outlay than recreation Protect the visual Recreation and Nominal Slightly positive Increased investment Protect tourist enjoy- quality of natural, tourism In site design, plan- ment of visual resources historic, or open areas, ning, and main- and the coastal view- tenance; development shed (44, 45, 46, 47, may be lea profitable 48, 49, 50) Encourage lower cost Recreation and Positive, but not to Positive, but not to Positive, but not as Maintenance of access tourist facilities over tourism the same extent as the same extent as profitable as more to coastal resources exclusively expensive more luxurious de- more luxurious de- luxurious development. for citizens of all facilities (125) velopm ent velopment Tax and other incen- income groups tives a positive induce- ment. Evaluate public recrea- Recreation and Positive or negative, Positive or negative, Positive or negative, Preserve public access tion potential and future tourism; housing and depending on whether depending on whether depending on whether to recreational arneni- demand before per- urban development other potential uses other potential uses other potential uses ties of the coast mitting other uses of would be more labor would entail larger are more profitable oceanfront laud (132) intensive construction outlay than recreation EXHIBIT 3 POTENTIAL ECONOMIC DEVELOPMENT EFFECTS OF SELECTED COASTAL PLAN POLICY ACTIONS (continued) Potential Economic Effects Primary Coastal Primary Affected Employment Other Business Benefits/ Costs Plan Policies Sectors of the Economy (nou- construction) ConsMction Activity luvestrnent/Profftability to the Consumer Provide a variety of Recreation; housing Positive Positive Positive Minimize travel dis- recreation opportuni- and urban development tance to recreation; ties near metropolitan lessen congestion of areas (137) coastal facilities Require new residen- Housing and urban Nominal Positive Increases investment; May increase housing tial development to development, recreation may reduce profitability costs borne by the provide on-site ultimate consumer; recreation (141) greater amenity benefits; less crowding of public facilities Establish and manage Recreation and Slightly positive - Slightly negative Slightly negative to Maintain recreational coastal reserves; tourism; housing and increased public negative depending on resources OD acquire land where urban development sector employment extent 4 compensation appropriate (150) Foster recreational Recreation and Slightly positive Positive Positive (investment in Satisfy public demand boating; improve tourism boats, equipment, etc.) for boating access to marinas (146, 147, 148) Source: Real Estate Research Corporation CA) (M -1-1 0) @@ 0) cc);mi@ I 0 0 0@ 0@ 0 = - t@ t 0-- Pi FZ @ @ , @ M M-wf M M M M M m m M MOM IPI