According to research by National Oceanic and Atmospheric Administration (NOAA), coastal counties of the US are home to over 126 million people, or 40 percent of the nation's total population. However, the coastal land accounts for less than 10 percent of the nation's land mass (excluding Alaska). As an Accredited Land Consultant in coastal North Carolina, I've experienced the unique challenges of land transactions near the water, and I'd like to share with you four main areas of consideration for anyone selling, buying, or investing in coastal properties.
1) Waterfront Property Considerations
Whether you are talking about ocean front, sound side, mainland water front, or on a river, you should know about the riparian rights and where exactly the title shows the property’s boundaries fall. This differs in each state, so double check your state laws for exact definitions and restrictions.
Verify that the water is indeed navigable, whether that's by boat, kayak, canoe, or yacht. There is no such thing as deep water, what is deep to me, may not be deep to you, so there is room for misinterpretation. Determine the depth needed for its intended use(s) and, if possible, the owner should take the boat/vessel to the property as a test to make certain it will serve its purpose.
It's common along the ocean for there to be an easement recorded for public enjoyment, public use, or for local governmental authorities to perform activities like beach re-nourishment, sand pushing, etc. Since you may own the section of the beach in front of your home to the high tide mark, the public and municipality probably still has the right to use and enjoy that space. Any homes or buildings that are waterfront may NOT be re-buildable. If a storm damages the structure to a certain extent (determined by local codes and ordinances), you may not be able to rebuild that structure to its original state. You also may find, especially with older buildings, that new setback requirements could affect your buildable space on the land. Always check with local governmental authorities to determine the local rules and requirements.
2) Wetlands and Areas of Environmental Concern (AEC)
Due to the sensitivity of coastal watershed areas and wetlands, any proposed development should give consideration to any designated wetlands and how storm water flow and erosion may impact them. There are many types of flora, fauna, and animals that only thrive in wetlands, therefore, regulations exist to protect them. Find ways your plans can incorporate these areas into your design and you'll probably score some brownie points with the planning department.
If there are wetlands on your survey or plans, you'll likely need to get the Army Corps of Engineers to come on site for an evaluation to determine exactly where and what kind of wetlands you have. This can take some time, so plan for that during your due diligence examination of the property. There will likely be restrictions on development near wetlands such as additional setback requirements, erosion control measures, and storm water runoff plans. Knowing a good coastal engineer and surveyor will greatly help you get a plan together more efficiently that can be easily approved. If you must disturb wetlands, mitigation banks and conservation easements may be an alternative to achieve your goals. Your engineer should have contacts at a local mitigation bank to work through those challenges.
3) Insurance Considerations
Investigate if the county/city/municipality/town is part of the National Flood Insurance Program (NFIP). The NFIP's Community Rating System (CRS) is a voluntary incentive program that recognizes and encourages community floodplain management activities that exceed the minimum NFIP requirements. Participation in this program provides discounts to flood insurance policy holders because their community is working to reduce flooding damage to properties, strengthening and supporting the insurance aspects of the NFIP, and encouraging a comprehensive approach to floodplain management.
Not all communities are part of the NFIP, therefore, property owners won't be able to purchase Federal Emergency Management Agency backed flood insurance. The only option otherwise is a private flood policy for your structures, which can actually be more affordable and provide better coverage. Compare both types of policies anyway and make sure the coverage works for your intended use, you may be surprised at the extras a private policy offers. This is a great reason to use a local insurance company near your property who understands flood insurance. Most people forget about the other insurance policy you will probably need, which is wind and hail. Wind driven rain and hail can create damage that isn't always apparent, but can create a lot of problems. Mortgage companies will likely require it, and proximity to the ocean is a factor, so be prepared. Properties that are 30 miles inland can still be in a wind zone, requiring the additional coverage.
4) Highest and Best Use
People love to live near the water, but a land practitioner must remember that not all land is meant to be a housing development. With all of the challenges we've covered, you can imagine there are tracts of land that some think are just unusable, which is not the case. Alternative options such as solar, wind, and organic farming are showing up near the water on properties without suitable soils for septic. Depending on your seller’s financial goals, maybe conservation easements or putting land into a mitigation bank would bring a higher sales price. Think outside the box, there's a buyer for every parcel. Affordable housing options are limited in coastal communities because the higher land prices won't support a lower-priced product. Zoning restrictions controlling density near Areas of Environment Concern could further limit a developer. Talk to your local planning or zoning office to find creative ways to be able to offer affordable, workforce housing options in your community. Approximately 446 people per square mile live in coastal counties, and they need goods, services, and retail options. Getting the right mix between tourism in coastal areas creating a short term economic boost and providing year-round jobs and industry is the key to having a robust, year-round economy.
This article was originally published in the REALTORS® Land Institute Winter 2020 Terra Firma Magazine.
About The Author: Christina Asbury, ALC, is with Coldwell Banker Sea Coast Advantage in Sneads Ferry, NC. She serves has been a member of RLI since 2007 and earned her ALC Designation shortly after in 2008. She has served on RLI’s Future Leaders, Education and Government Affairs Committees over the years and is active in her local RLI Carolinas Chapter.