Jersey Shore Chapter

Economics of Beach Replenishment

Beachfill operation on LBI, 2015 by Kyle Gronastajski

The state of New Jersey is proposing to double the amount we spend on beach replenishment, also known as beach fill. Is this good news? Proponents of pumping sand on our beaches point to the economic benefits gained by protecting property and encouraging tourism.. 

But we must question their figures. Does it really make sense to increase the pumping of sand indefinitely, or are the costs and benefits not as crystal clear as proponents make them out to be? 

Pumping sand onto beaches isn’t new. Multimillion dollar projects have been repeated here for many years. Yet, Superstorm Sandy, hitting the New Jersey coastline in 2012, still caused a huge number of structures, built improperly, far too close to the ocean, or with insufficient buffers, to suffer major damage. The damage escalated demands for better protection from storms. Reports from the state called for a whole series of strategies, such as better planning and strategic withdrawal from high risk areas. But in most cases the only strategy carried out was more massive sand pumping. 

As the first step in these new projects (which continue to this day and extend well into the future) the Army Corps conducted an economic analysis to show the beach fill projects were financially sensible. The analysis was badly flawed.

As one prime example, Superstorm Sandy caused a reevaluation of flood and wave damage levels all along our coast. To reduce future insurance rates, many structures damaged in the storm were required by insurance companies to be raised on pilings above the flood and wave elevation. Yet the Army Corps completely ignored this in their assessment of future damage costs, still analyzing these properties as being not raised. According to the feasibility study for the Manasquan Inlet to Barnegat Inlet portion of their work, “Approximately 2,700 structures were inventoried during the summer of 1997. These structures were selected based on the assessment of damage susceptibility to oceanfront storm damages.” 

If many thousands of the homes and businesses that were susceptible to damage from storms back in 1997 have since been raised to protect them, why was this not accounted for? How badly skewed are the Army Corps figures? Does the project now make sense at all. 

We should also look at how much we have spent already. Information collected by Western Carolina University shows a total cost of $1.5 billion spent on beach replenishment in New Jersey for the most recent 30-year period in their data, from 1989-2018. 

In all likelihood, we will spend at least another $1.5 billion over the next 30 years. The cost will spiral even higher should we double the amount of state money going towards beach replenishment, as proposed in recent legislation. So, the value of structures at risk is far lower than the Army Corps reported, yet the state wants to double the amount we pay to protect them. Is this sound economics or a fool’s errand? 

An especially bothersome aspect here is that the less sensibly we build in high-risk areas, the easier it is for the Army Corps to justify their projects. If, for example, a town like Seaside Park has wisely maintained wider setbacks and extensive dunes between homes and the ocean, there is far less cost justification there for beach sand pumping. The Army Corps’ data says the average annual damage to structures in Seaside Park – without ANY beach replenishment – would probably be only $127,000. Compare that to Mantoloking where the same data predicts an annual loss of over $2 million since no dunes at all were left there in the past for protection. This means the Army Corps projects reward the towns that have done the worst planning. Not the best incentive!

If we truly wish to prevent future losses, why allow these damaged structures to be rebuilt at all? If the state had more extensive and better-funded programs for buyout in the coastal areas, then over time we could move more structures out of harm’s way. The Blue Acres program does not buy properties near the beach. This needs to change. Relocation needs to be funded.

In an article from ProPublica (“A Never-Ending Commitment”: The High Cost of Preserving Vulnerable Beaches”4) Mark Mauriello, the former commissioner of the New Jersey Department of Environmental Protection, recognized this, saying that the value of protection from beach projects, “…decreases rapidly as you move in from the beachfront”. Yet, the emphasis remains almost entirely on pumping sand on our beaches. Why? 

Certainly, tidal surges in bays, inlets, and rivers cannot be reduced by putting more sand on our ocean beaches. Realizing that the risk from storms extends far beyond the coast, the Army Corp of Engineers proposed the “New Jersey Back Bays Coastal Storm Risk Management Study.” This looks at flooding in our back bays across Monmouth, Ocean, Atlantic, Burlington, and Cape May Counties, a 950-square-mile area that includes 3,400 miles of shoreline.

In August 2021 they released an update for the study, proposing an additional cost of $16 billion for part of their solution – three storm surge barriers and two cross-bay barriers.  We have major concerns about the effects from the proposed storm surge and cross-bay barriers, which could negatively affect the environment, recreation, and nearby beaches.

We have heard the argument that beach replenishment is needed to protect necessary infrastructure like roads and power lines. In some places that may be true. Yet, in many locations along our coast, the land is given over entirely to the mansions of a wealthy few. ProPublica’s article noted that, “…federal funds favor predominantly white, high-income towns, and even more so the properties right along the beach.” Is this the “infrastructure” we should be spending billions of our tax dollars to protect?

Even the state recognizes this problem. In a recent report, the NJDEP said, “Despite federal and state efforts, coastal development continues to be sited in high hazard areas, increasing property damage losses and recovery costs for coastal communities.” If, as we noted earlier, homes and businesses have been built (or rebuilt) in known high-risk areas, why is it our duty to safeguard bad investments?  

We should also ask, where does the money come from? Is cost sharing equitable? There are many answers to that. 

For federally funded sand pumping projects – the overwhelming majority here in New Jersey – 65% is paid for by the federal government, using tax dollars from all USA citizens. The remaining cost is split, with the state of New Jersey contributing 26% of the total cost, and the local community providing 9%. This means landowners get the best deal of all, kicking in a small amount through local taxes (with coastal landowners enjoying some of the lowest tax rates in the state). Coastal towns make out very well, getting back more than 10 times what they payout. State residents pick up a goodly share, and the rest of the country covers the vast amount that remains. To us, this seems like a lopsided arrangement. What do you think?  

Finally, we all pay for coastal development in other ways. Since 1968, through the National Flood Insurance Program the government has provided subsidized insurance coverage to folks with flood-prone properties, like those along our coastline. The U.S. Government Accountability Office, a federal watchdog agency, found that in just the last 14 years, the program paid out $36.5 billion more in coverage than it took in from property owners, getting the rest from the taxpayers. Another way that all of us fork over our cash to make coastal development possible.     

Beaches are never the real issue. As wise people have pointed out, there will always be beaches along New Jersey’s coast – a sandy strip where the ocean meets the land. The question is, where will that strip be? And how much does it cost to keep it there? Given the expected sea-level rise over the next few decades, this situation demands better strategies. We must look at answers beyond the wasteful pumping of sand. Does the creation of wider, sturdier, and more natural dunes make sense? The buyout of strategic land? Better zoning and planning? Each of these must have its place in coastal protection and should get a share of any state or federal funding. We believe it is time for a change.  

1 – U.S. Army Corps of Engineers, Philadelphia District. (June 2002) “Final Feasibility Report

Integrated Environmental Impact Statement”. U.S. Army Corps of Engineers. 

2 – Program for the Study of Developed Shorelines at Western Carolina University. Western Carolina University. Retrieved August 18, 2021, from  https://beachnourishment.wcu.edu/  

3 – Hess, H., Delgado, M., Hamidi, A., Houser, T., Kopp, R., Bolliger, I., Hsiang, S., Greenstone, M. (October 29, 2019). “New Jersey’s Rising Coastal Risk”. Rhodium Group. Retrieved August 18, 2021, from  https://rhg.com/research/new-jersey-flooding-hurricanes-costs-climatechange/

4 – Long, L., Shaw, A. (Sept. 27, 2018) “A Never-Ending Commitment”: The High Cost of Preserving Vulnerable Beaches” Propublica. Retrieved August 18, 2021, from  https://www.propublica.org/article/the-high-cost-of-preserving-vulnerable-beaches#:~:text=Racial%20Justice-,%E2%80%9CA%20Never%2DEnding%20Commitment%E2%80%9D%3A%20The%20High%20Cost%20of,and%20disproportionately%20benefit%20the%20rich.

5 – United State Army Corp of Engineers. (July 26, 2021) “New Jersey Back Bays Coastal Storm Risk Management Study” USACE Philadelphia District. Retrieved August 18, 2021, from  https://www.nap.usace.army.mil/Missions/Factsheets/Fact-Sheet-Article-View/Article/490870/new-jersey-back-bays-coastal-storm-risk-management-study/ 

6 – U.S. Government Accountability Office. (October 14, 2020) “The Wave of Concerns Facing the National Flood Insurance Program”. U.S. Government Accountability Office. Retrieved September 14, 2021 from https://blog.gao.gov/2020/10/14/the-wave-of-concerns-facing-the-national-flood-insurance-program/.