Exploring The Effects Of Artificial Dune Construction On Coastal Property Values Along New Jersey: Insights From A Geo-Economic Model

Following the devastating effects of Superstorm Sandy in October 2012, the State of New Jersey adopted and installed large-scale berm-dune structures with the goal of enhancing coastal resilience to future storms. Specifically, artificial dunes have been constructed by the US Army Corps of Engineers in accordance with the FEMA “540-Rule” design. The management goal of dune construction is to mitigate storm-related damages, thereby ensuring continuation and growth of beachfront tourism. An aggregated housing data trend (2013-2017) of three specific adjacent beachfront communities, with newly installed “540-Rule” dunes, reveals the assessed housing prices immediately inflated following these installations. Of the three beachfront communities, the single community with opposition to these measures saw the least significant increase in housing values. Because some community stakeholders tend to value aesthetics (i.e. beachfront viewership and private access) over protection, or may begin to lower their perceptions of storm damage risks over time, it is unclear whether these beachfront communities are willing to deliver the costs of maintaining these projects in the future. To tackle this question, we’ve developed a “geo-economic” model that captures the natural processes of beach and dune erosion and migration via storm overwash, coupled with engineering interventions of beach nourishment and dune construction. The economic portion of the model accounts for the relationship between property values and berm-dune geometry. By deriving mathematical expressions for optimal berm and dune size as a function of geologic and economic parameters, our model suggests that conflicting preferences for coastal protection versus aesthetics could affect the willingness of property owners to maintain large-scale berm-dune structures in the long-term.