Obsolescence arising from the transformation of property rights due to the effect of sea level rise : a property economics perspective

Sea level rise has the potential to compromise private property rights for a spectrum of coastal property types globally. This paper surveys the range and magnitude of impacts in order to move to the analysis of a case study of Australian urban waterfront property with a focus on Coogee in Sydney. The analysis reveals that while sea level rise has the potential to erode valuable private property rights, the magnitude and time frame is such that it can be compared to other changes in the value of property and capital assets for which depreciation is not considered controversial. That is, the risk of sea level rise may be conceptualised as transforming affected properties into something that performs in a manner other than that usually associated with city waterfront land. The legal and political issues are calibrated by reference to the property economics of possible physical outcomes overthe next century. It is argued that the transformation of a property asset that is normally associated with strong and continuous capital gain into one displaying physical obsolescence represents a real transformation in the nature of the property right. This raises issues surrounding the social significance of land subject to capital growth which may be due for critical review. Keywords: sea level rise; residential property markets; just terms compensation, environmental infrastructure funding, environmental economics, urban economics, Georgist environmental land tax.