Does Removing Federal Subsidies Discourage Development? An Evaluation of the Impact of the U.S. Coastal Barrier Resources Act

Urban development relies on many factors to remain viable, including infrastructure, services, and government provisions and subsidies. However, in situations involving federal or state level policy, development responds not just to one regulatory signal, but also to multiple signals from overlapping and competing jurisdictions. The 1982 U.S. Coastal Barrier Resources Act (CoBRA) offers an opportunity to study when and how development restrictions and economic disincentives protect natural resources by stopping or slowing urban development in management regimes with distributed authority and responsibility. CoBRA prohibits federal financial assistance for infrastructure, post-storm disaster relief, and flood insurance in designated sections (system units) of coastal barriers. How has CoBRA’s removal of these subsidies affected rates and types of urban development? Using building footprint and real estate data (n=1,385,552 parcels), we compare density of built structures, land use types, residential house size, and land values within and outside of system units in eight Southeast and Gulf Coast US states. We show that CoBRA is associated with reduced development rates in coastal barrier zones. We also demonstrate how local responses may counteract withdrawal of federal subsidies. As attention increases towards improving urban resilience in high hazard areas, this work contributes to understanding how limitations on infrastructure and insurance subsidies can affect outcomes under overlapping jurisdictions with competing goals.