BRIDGING THE GAP 1
EXECUTIVE SUMMARY
Bridging the Gap:
Funding Sea Level Rise
Adaptation in the Bay Area
December 2021
Photo by Kyle Cottrell on Unsplash
Attachment 3
2 BRIDGING THE GAP
Contents
Executive Summary 3
Introduction 6
Paper Overview 6
Background and Context: Adaptation in the Bay Area 6
Equity and Environmental Justice Considerations 8
Constant Dollar Values 8
Funding Versus Financing Definitions 8
Defining Adaptation 9
Unknowns 9
Damages: Sea Level Rise Damages Without Adaptation 10
Property Damages for the Bay Area 11
Property Damages by County and City 14
Sea Level Rise Damage Unknowns 14
Comparison of Economic Damages of SLR to Other U.S. Natural Disasters 16 Funding Needs: Cost Estimates for Adaptation in the Bay 18 Costs vs Benefits 18
Regional Adaptation Cost Estimates 20
Documented Adaptation Project Costs 21
Adaptation costs per linear foot of shoreline 21
Individual Bay Area Adaptation Projects (Case Studies) 23 Project Cost Unknowns 23
Funding Supply: Funding for Adaptation Projects 27
Federal Funding 27
State Funding 32
Bay Area Regional Funding Data 34
City Funding 35
Regional Funding Totals using SCO Data 40
Funding & Financing Unknowns 41
Funding Gap: Bridging the Gap Between Funding Need and Supply 43 Funding Facts & Actions 45
Discussion 47
Appendix 48
Credits 50
BRIDGING THE GAP 3
EXECUTIVE SUMMARY
Executive Summary
1 Goals Project. 2015. The Baylands and Climate Change: What We Can Do. Baylands Ecosystem Habitat Goals Science Update 2015 prepared by the San Francisco Bay Area Wetlands Ecosystem Goals Project. California State Coastal Conservancy, Oakland, CA. 2 Wood, N., Jones, J.M., Henry K., Ng, P ., Hou, C.Y., 2020, Hazard Exposure Reporting and Analytics – Coastal Flooding Tool, U.S.
Geological Survey web application, https:/ /www.usgs.gov/apps/hera/floodTool.php Rising sea levels (SLR) will have widespread impacts on the Bay Area, and adapting to this hazard will cost tens of billions of dollars over the next several decades. This paper is an initial exploration of forecasted estimated damages in the absence of adaptation, as well as the
funding needs, funding supplies, and funding gaps that
the region could face as it adapts to rising sea levels during this century. It is apparent that multiple funding sources – a diverse set of public funding mechanisms
as well as private and philanthropic funding – will be
required for the Bay Area to adequately address this
problem.
This exploration is based on what we know now. But,
there is so much uncertainty surrounding the “how,”
“when,” and “where” of SLR that this exploration needs
to be viewed against the kaleidoscope of so many
issues that are based on forecasts that, themselves,
can be viewed as uncertain.
First, some salient facts:
1. The 2018 California Ocean Protection Council
(OPC) State guidance on SLR forecasts 2’ feet of
SLR by 2050 and 6.6’ feet of SLR by 2100 as a
likely possibility in its Medium-High Risk aversion
scenario.
2. The remaining wetlands in the Bay Area are at
the risk of being lost due to SLR by 21001. These
critical ecosystems provide many benefits including
habitats, biodiversity, stormwater retention, wave
attenuation, carbon sequestration and recreation.
3. USGS2 economic property damage estimates
caused by around 3' of SLR with a 1-year storm in
the Bay Area is $55.8 billion, which is comparable
to Superstorm Sandy at $55.6 billion. The estimate
resulting from about 6' of SLR with a 1-year storm
in the Bay Area is $118.8 billion, putting it in the
ballpark of Hurricane Katrina at $144 billion.
4. Regional costs for adapting to 2' of SLR are
around $19 billion (Metropolitan Transportation
Commission/Association of Bay Area
Governments), while adapting to 6' of SLR could
cost around $146 billion (UC Berkeley).
5. This paper projects a hypothetical funding supply
range of between $63.7 million and $318.5 million
per year that may be allocated or raised for Bay
Area SLR adaptation efforts based on recent city
expenditure and revenue data collected by the State
Controller's Office (SCO).
6. The estimated needs and existing funding supply
result in a funding gap in the 9-County Bay Area
of roughly $315 million to $570 million per year to
protect against 2’ of SLR (2050), and $1.5 billion to
$1.76 billion per year to protect against 6.6’ of SLR
(2100). This funding gap estimate will change, and
may change dramatically, as the region undertakes
more detailed risk analysis. These are only
estimates based on existing information collected
from a wide variety of sources.
"The estimated needs and existing funding supply result in a funding gap in the 9-County Bay Area of roughly $315 million to $570 million per year to protect against 2’ of SLR (2050), and $1.5 billion to $1.76 billion per year to protect against 6.6’ of SLR (2100)." 4 BRIDGING THE GAP
EXECUTIVE SUMMARY
Table 1 gives an overview of the region’s estimated
total annual need, total annual existing revenues, and
the resulting total funding gap, as well as a breakdown of this gap by gross regional product, per capita, per
household, and per parcel. These figures are based on
a literature review and BCDC’s internal calculations.
It is critical to consider the analysis in this paper
alongside the many unknowns and uncertainties
inherent in estimating funding needs for SLR. These
include the expected rate and timing of various
SLR scenarios, proposed flood protection heights,
infrastructure costs including stormwater management,
impacts from groundwater rise, disproportionate
economic impacts to vulnerable communities,
population and economic growth, insurance rate and
coverage changes, and the implications of existing and
future policies, permits and regulations on adaptation
projects and novel financing tools. Clearly, not all of these factors are within the control of decision-makers and voters and their variability may well lead to either major breakthroughs or major hurdles for addressing
the funding needs for SLR adaptation – or both!
Compounding this uncertainty is that both the
distribution of SLR risks and the possible supplies
of public funding around the region are highly
variable. The uneven distribution of risk, costs from
damages, funding needs, and funding supplies could
result in unequal adaptation responses around the
region. One of the lessons of this paper is the need
for regional agreements, coordination, collaboration,
and partnerships to ensure that funding is distributed
equitably.
1 Bay Adapt Joint Platform: https:/ /www.bayadapt.org/jointplatform/ 2 MTC/ABAG, “Plan Bay Area 2050", https://www.planbayarea.org/sites/default/files/documents/Plan_Bay_Area_2050_ October_2021.pdf
3 Barnard et al., “Dynamic Flood Modeling Essential to Assess the Coastal Impacts of Climate Change.” A regional funding strategy, as identified in the Bay
Adapt Joint Platform1 and informed by the data in this
study and by MTC/ABAG’s funding analysis as part
of Plan Bay Area 20502, can support more equitable
distribution of adaptation funding to support our
diverse region, identify new potential regional funding mechanisms, and help pave the way for a fair share
of state and federal funding. The need for this funding discussion is urgent; this year’s State budget includes billions of dollars in funding to address critical climate change and climate adaption needs in California. Given
that two-thirds of all negative SLR impacts in California will occur in the San Francisco Bay Area3, BCDC will
work with our local and regional partners to advocate
for an equitable share of such funding to protect the
Bay Area’s coastal communities and habitats.
BRIDGING THE GAP 5
EXECUTIVE SUMMARY
Category Definition
2 Feet of SLR by 2050
(30-year Funding Period)
6.6 Feet of SLR by 2100
(80-year Funding Period)
Potential Total
Annual Need for the
Region
Estimates of Total
Annual Adaptation
Costs for the Region
$633 million $1,825 million
Potential Total
Existing Annual
Funding for the
Region
1%-5%* of Total City
and Special District
Expenditures & State
and Federal Revenue
$63.7 million - $318.5 million $63.7 million - $318.5 million Potential Total
Annual Funding Gap
for the Region
Additional Annual
Funding Needed for
the Region
$315 million – $570 million $1,507 million –$1,761 million *Theoretical range of current expenditure and revenues that could be made available for adaptation projects based on cities’ capital outlay and debt service expenditures between 2017 and 2019. % Bay Area GDP
Annual Funding Gap 0.05% – 0.1% 0.25% – 0.3%
Per Capita Annual
Funding Gap $41 - $74 $196 - $229
Per Household
Annual Funding Gap $117 - $211 $558 - $652
Per Parcel Annual
Funding Gap $166 – $300 $793 – $927
Potential
The Total Annual Funding Gap can be
expressed as:
Table 1. Estimated Annual Revenue Needs for SLR Adaptation Spending in the Bay Area. See Sections "Funding Supply" and "Funding Gap" for a description of the methodology behind these values.
INTRODUCTION
6 BRIDGING THE GAP
Introduction
1 MTC/ABAG, “Plan Bay Area 2050", https://www.planbayarea.org/sites/default/files/documents/Plan_Bay_Area_2050_ October_2021.pdf
2 2016 Comprehensive Conservation and Management Plan for the San Francisco Estuary (Estuary Blueprint), San Francisco Estuary Partnership
3 Beagle, J.; Lowe, J.; McKnight, K.; Safran, S. M.; Tam, L.; Szambelan, S. Jo. 2019. San Francisco Bay Shoreline Adaptation Atlas:
Paper Overview
This paper gives an introduction and overview of the
current state of funding for sea level rise adaptation
in the Bay Area. By demystifying the costs of adapting
to SLR in the Bay Area, this paper can help initiate the way towards a regional adaptation funding strategy and
assist regional planning processes, such as Bay Adapt
and Plan Bay Area, and local planning for sea level rise funding. The following questions are analyzed:
1. Damages: How much economic damage is likely
to occur due to flooding from SLR if no actions are
taken? How does this compare to the damages
likely from other natural hazards?
2. Funding Needs: How much money is likely needed
for the Bay Area to reduce flood risk from SLR over
the next several decades? How much do existing
and planned on-the-ground case study projects in
the Bay Area cost?
3. Existing Funding Sources: How much money has
been available per year for local governments in
the Bay Area from local, regional, state and federal
sources and in what forms?
4. Funding Gap: What is the preliminary estimated
funding gap to adapt the region to SLR (or what is
the difference between the adaptation need and
potential revenues)?
The outline of this paper is shown in Figure 1. The
first two sections provide information on the costs
of potential damages from sea level rise without
adaptation and then compares that to how much
adaptation may cost throughout the region. The
following sections look at the history and current
state of public spending, a percentage of which
needs to be additionally raised or reallocated for
natural disaster and climate change adaptation.
This section also provides a speculative outlook on,
and recommendations for, the future of funding and
financing adaptation.
It is important to keep in mind throughout this paper
that all cost estimates are high-level, rough order-of- magnitude estimates—there are still many unknowns
about impacts, costs, and funding sources that would
help to contribute to a more accurate picture over time.
Background and Context: Adaptation in the
Bay Area
Many Bay Area cities and counties have taken a
proactive approach to climate change, including sea
level rise adaptation. A large percentage have or are in the process of developing vulnerability assessments,
adaptation plans, and adaptation projects to manage
the risks from the sea level rise crisis. Of these,
some have begun moving from adaptation planning
to project funding, as there are several examples of
cities using local bonds or taxes to raise funds for
adaptation projects. These local initiatives will play
the largest role in ensuring the region’s risk-reduction from the consequences of sea level rise, as most land
use and infrastructure projects are planned, managed,
implemented, and maintained by local jurisdictions.
It is unlikely, however, that local initiatives alone
will be sufficient to address this regional challenge.
Because of this, many region-wide initiatives are
working toward implementable solutions to SLR; these
include the Metropolitan Transportation Commission/
Association of Bay Area Governments’ (MTC/ABAG)
Plan Bay Area 20501, the Bay Area Climate Adaptation
Network (BayCAN), San Francisco Estuary Partnership’s
(SFEP) Estuary Blueprint2, the San Francisco Bay
Restoration Authority's (SFBRA) Measure AA, the San
Francisco Estuary Institute’s (SFEI) Adaptation Atlas3
INTRODUCTION
BRIDGING THE GAP 7
and San Francisco Bay Conservation and Development
Commission’s (BCDC) ART Bay Area1 project as well as
the BCDC-facilitated Bay Adapt2 initiative, among many
others.
Plan Bay Area 2050 is the Bay Area’s long-range
transportation and land use plan through the year 2050, which is was adopted in Fall 2021. It outlines a future roadmap for the Bay Area, the policies and investments
necessary to advance a more affordable, connected,
diverse, healthy, and vibrant Bay Area. Of the thirty-
five regional strategies suggested in Plan Bay Area,
one is focused entirely on sea level rise adaptation. In Plan Bay Area 2050, analysts developed “straw-man”
adaptation costs that respond to their analysis of the
impacts of sea level rise on future growth, resulting in a financial Needs and Revenue assessment for the region
that highlights the regional funding gap. Plan Bay Area 2050’s Implementation Plan outlines how to implement
the Plan’s strategies in the next 1-5 years, including
adapting to sea level rise.
Working with Nature to Plan for Sea Level Rise Using Operational Landscape Units. SFEI Contribution No. 915. SFEI & SPUR: Richmond, CA. p 255.
1 Adapting t o Rising Tides 2020. Adapting to Rising Tides Bay Area: Regional Sea Level Rise Vulnerability and Adaptation Study. Bay Conservation and Development Commission (BCDC) and Metropolitan Transportation Commission/Association of Bay Area Governments (MTC/ABAG), San Francisco CA.
2 Bay Adapt Joint Platform: https:/ /www.bayadapt.org/jointplatform/ Bay Adapt is a regional initiative facilitated by BCDC
that aims to build consensus around the region on sea
level rise strategies. While implementation is underway at the time of publication of this report, the initiative has developed a series of regional adaptation actions
that include topics like establishing regional “best
practice” standards, elevating the voice of communities and community-based organizations in adaptation
conversations, creating a public education campaign,
streamlining regional and local planning, permitting,
and policies, a regional funding strategy, legislative
approach, and providing technical assistance to local
cities and counties. The actions underwent public
comment and will hopefully lead to the commitment of
Bay Area leaders to implement these actions in 2022
and beyond.
Ultimately, funding is frequently identified as a big
challenge to overcome when implementing any
possible solutions. A large challenge the Bay Area
will face is how municipalities and the region will pay for adaptation projects to protect communities and
Figure 1. This paper explores the damages of SLR without adaptation, as well as the adaptation funding and financing needs, supplies and the resulting funding gap.
Sea Level Rise Damages
• Social
• Environmental
• Economic
• Comparison to
other Natural
Disasters
Funding
Needs
• Regional
• Local
• Case Studies
Regional
Funding
Gap
• Federal
• State
• Regional
• Local
Funding
Supply Solutions
• Bay Adapt
• Plan Bay Area 2050
• Sacramento
Legislature
• FEMA
Key Components of the Paper
INTRODUCTION
8 BRIDGING THE GAP
habitats from sea level rise. The issue of sea level
rise in the Bay Area will affect the entire Californian economy as the Bay Area is anticipated to receive
two-thirds of all socioeconomic impacts caused from
projected flooding in all of California.1
Equity and Environmental Justice
Considerations
Without improving the understanding of the regional
funding gap for adaptation that the Bay Area faces
and implementing a just distribution of funds, there
is no clear pathway forward to creating an equitable
and resilient Bay Area. This is because the effects of
climate change and sea level rise will not be felt by
all people equally. Even in cases where flooding is
comparable, existing social and economic conditions,
as well as existing contamination burdens, will
influence how severe the disruption will be across
households.
Low-income communities are more likely to be located
near contaminated, low-lying areas that are vulnerable
to sea level rise.2 These communities are also likely
to be facing other threats like gentrification and social displacement. In almost all locations where social
vulnerability is present, gentrification and displacement are either ongoing or pose potential threats to
community cohesion.3 Gentrification and flooding
are dual drivers of displacement that pose risks to
socially vulnerable populations. In addition, many
vulnerable shoreline communities are located adjacent
to hazardous waste sites. Contaminants at these sites
may become mobilized by flooding, compounding
threats to the community. An unequal distribution
of adaptation solutions could deepen inequity and
increase vulnerabilities for low-income communities.
An additional concern regarding SLR adaptation is an
increased financial burden on low-income communities
created by potentially regressive adaptation funding
1 Barnard et al., “Dynamic Flood Modeling Essential to Assess the Coastal Impacts of Climate Change.” 2 Bay Conservation and Development Commission (BCDC) and Metropolitan Transportation Commission/Association of Bay Area Governments (MTC/ABAG), “Adapting to Rising Tides Bay Area: Regional Sea Level Rise Vulnerability and Adaptation Study.” 3 Bay Conservation and Development Commission (BCDC) and Metropolitan Transportation Commission/Association of Bay Area Governments (MTC/ABAG).
4 U.S. Bureau of Labor Statistics, “CPI Home.”
mechanisms, including local match requirements.
While this paper does not focus on individual funding
or financing mechanisms for projects, it is important to consider who is paying, who benefits, and how things
are paid for. Understanding these nuances of inequity
in funding and financing tools is essential to building equitable adaptation in the Bay. A regional funding
strategy could spell out specific guidelines for more
equitable financing and funding measures, as well as
redistribute revenues around the region so that it goes where it is most needed, not where there are the most
resources.
Constant Dollar Values
In order to make comparisons of all these large
dollar values across many years easier, most values
were converted to 2020 U.S. dollar values using
the U.S. Bureau of Labor Statistic’s Consumer Price
Index (CPI) (All Goods). The CPI “is a measure of the
average change over time in the prices paid by urban
consumers for a market basket of consumer goods and
services. Indexes are available for the U.S. and various geographic areas”.4 In some reports the year of a dollar value was not stated and was assumed to be the value
during the year of the described event.
Funding Versus Financing Definitions
For the purposes of this paper, we use the following
definitions:
• Funding: direct revenue or cash to pay for projects; e.g. through taxes, fees and grants.
• Financing: project payment over time by borrowing
money from institutions; provision of the initial
cash for the projects at a return rate; e.g. a loan or
a bond.
INTRODUCTION
BRIDGING THE GAP 9
This paper mainly focuses on funding (i.e. grants,
taxes, fees, etc.) with the addition of currently proposed State and regional funding, rather than financing,
though local financing will likely play a significant role in closing the funding gap for cities, counties, and the region.
Defining Adaptation
In this paper, adaptation refers only to adaptation
to flooding from sea level rise. Furthermore, only
the costs of structural adaptation actions, including
both gray and green infrastructure, are considered
here. Structural adaptation actions (referred to as
“adaptation”) refer to physical shoreline projects
that change the shoreline to prevent overtopping of
water due to flooding and sea level rise from reaching
infrastructure, such as homes or roads. Adaptation
projects can include levees, wetland conservation,
raising roads, building “living shorelines” and
stormwater management.
This paper’s analysis does not explicitly consider
the cost of non-structural adaptation projects such
as land acquisition or infrastructure and building
relocation, elevation, and flood-proofing. Further, it
does not include the cost of planning and permitting
of adaptation, such as General Plan updates,
citywide vulnerability assessments, Local Hazard
Mitigation Plan updates, Adaptation Plans, California
Environmental Quality Act (CEQA) and other permitting
requirements or policy-based adaptation solutions
such as zoning changes, or the essential community
engagement that should be a part of these planning
processes. As noted above, funding for this planning
and analysis is critical. Additionally, this paper does not discuss future insurance rate or coverage changes
due to SLR and adaptation.
Unknowns
Uncertainties or information gaps in estimating costs
throughout this paper are identified in the ‘Unknowns’
sections of each chapter. The sea level rise damages
and the associated adaptation costs identified in this
paper are high-level estimates which could significantly change as uncertainties, unknowns, and information
gaps are addressed. The following are a summary of
the uncertainties listed in this paper:
• Damages
o Impacts of sea level rise on
groundwater levels and salinity, in
combination with riverine flooding
(current flood models include neither),
leading to potentially more damages.
o The disproportional cost burden for
disadvantaged communities that
accounts for their flood risk and
available public and private funding to
pay for adaptation.
o Total impacts of SLR in economic and
non-economic terms, such as lost
habitat, ecosystem functions, or human
displacement.
• Costs & Benefits
o Specific local plans for SLR protection
strategies.
o Changes to flood insurance rates or
coverage based on SLR and employed
adaptation strategies.
o The cost and availability of fill (or
sediment) and other materials needed
for projects such as levees, wetland
restoration, or elevating land.
• Revenues
o New, or reforms to existing California
tax policies (i.e., Prop. 218 and 13) and
how they may impact potential local
funding revenues.
o Population growth.
o Economic growth.
o Future state & federal budget policies.
DAMAGES
10 BRIDGING THE GAP
Damages: Sea Level Rise Damages Without Adaptation
There are significant uncertainties regarding climate
change and our adaptation to it; for example,
greenhouse gas emissions scenarios which impact
pace and timing of sea level rise, and which adaptation strategies will be employed where. What is certain is
that over the next several decades sea level rise will
drastically change the shape of the Bay and cause
greater financial stress for jurisdictions in the absence of adequate planning.
There are many types of damages that will be caused
by SLR, including destruction of private and public
property and infrastructure, loss of habitat and
ecosystem services, and social impacts to people
such as displacement from their homes and increased
contamination burdens. Each will have different fiscal
impacts, from direct loss of property to indirect losses that are more challenging to monetize, and these fiscal impacts will be felt by a range of entities, from private individuals to large corporations and governments.
This paper focuses on direct property damages via
parcel value because they are easily measured and
monetized, though it is important to emphasize that
only using the measure of parcel value as a proxy
for sea level rise consequences is flawed—wealthier
communities will always seem more impacted than
poorer communities since they have higher property
values. A more thorough flood risk analysis should
examine all economic impacts, including damage to
infrastructure, indirect and induced damages and non-
economic damage to habitat.
Many other sea level rise impacts will cause economic
Figure 2. Different types of damages caused by sea level rise. Property damages are quantified in this study, while the other damages are difficult to monetize.
"What is certain is that over the next several decades sea level rise will drastically change the shape of the Bay and cause greater financial stress for jurisdictions in the absence of adequate planning."
DAMAGES
BRIDGING THE GAP 11
stress but are more difficult to monetize, for example, water quality impacts from contaminated lands
being mobilized during flooding, habitat change and
loss, the impacts of a community being displaced, or
transportation routes being severed due to flooding.
ART Bay Area, a regional vulnerability and adaptation
study released by BCDC and MTC/ABAG in 2020,
measures sea level rise impacts through a series
of 32 consequence indicators to understand where
the biggest impacts are in the Bay Area despite the
distribution of wealth. Please refer to ART Bay Area for more information.1
Property Damages for the Bay Area
In this section property damages are based on parcel
value, including both improved and land value, as
represented by tax assessments and analyzed at
various sea level rise scenarios. Utilizing tax-based
parcel value likely significantly underestimates actual damage costs as many older properties are assessed
far below their market value due to Proposition 13.
However, it allows us to establish a preliminary, albeit likely low, understanding of the magnitude of financial impacts to private property. Residential properties
represent 51% of all assets at risk based on building
replacement value. Commercial and industrial sectors
also constitute a similarly high percentage of assets at risk at 46% each, while agriculture, education, religion, and government make up only about 3% of the assets
at risk when combined.2
Table 2 summarizes the potential property damages
caused by various sea level rise scenarios for the
Bay Area. This data is provided by the United State
Geological Service’s (USGS) Hazard Exposure Reporting
and Analytics (HERA) project3, which “was developed
to provide users with insight on potential population,
economic, land cover, and infrastructure vulnerability
1 Adapting to Rising Tides 2020. Adapting to Rising Tides Bay Area: Regional Sea Level Rise Vulnerability and Adaptation Study. Bay Conservation and Development Commission (BCDC) and Metropolitan Transportation Commission/Association of Bay Area Governments (MTC/ABAG), San Francisco CA.
2 Heberger et al., “The Impacts of Sea Level Rise on the San Francisco Bay.” 3 Wood, N., Jones, J.M., Henry K., Ng, P ., Hou, C.Y., 2020, Hazard Exposure Reporting and Analytics – Coastal Flooding Tool, U.S.
Geological Survey web application, https:/ /www.usgs.gov/apps/hera/floodTool.php 4 Barnard et al., “Dynamic Flood Modeling Essential to Assess the Coastal Impacts of Climate Change.” resulting from a given hazard”.
According to HERA, the value of parcels in SLR flood
hazard zones in the Bay Area ranges from $47.1 billion
(2020 $) for 3.3 feet of SLR to $102 billion (2020 $)
for 6.6 feet of SLR (with large uncertainty ranges). A
100-year storm is also assessed on top of every sea
level rise scenario, which is a storm that has a 1%
chance of happening in every year and is a standard
flood risk used by the Federal Emergency Management
Agency (FEMA). When adding a 100-year storm, these
property damages increase to $73.7 billion for 3.3 feet of SLR and $147.6 billion for 6.6 feet of SLR (2020 $),4 or almost a 50% increase in the property value at risk.
This increase is significant, but the 100-year storm has an even greater impact at lower SLR heights, increasing property damages by a factor ranging from two to ten.
DAMAGES
12 BRIDGING THE GAP
Table 2. Summary table of various sea level rise impacts to property damages for the Bay Area as reported by USGS HERA as measured in parcel value.
Bay Area Property Damages (As Measured as Parcel Value) With No Additional Adaptation Done To The Shoreline (2020 dollars) Sea Level Rise Scenario With No Storm With a 100-year Storm
0.8 feet $3.8 billion $37.7 billion
1.6 feet $26.9 billion $49.9 billion
2.5 feet $36.6 billion $58.4 billion
3.3 feet $47.1 billion $73.7 billion
4.9 feet $73.2 billion $113 billion
6.6 feet $102 billion $148 billion
Figure 3. Total impacted USGS HERA parcel value estimates, including both improved and land values, by SLR and storm scenarios in 2020 USD for the nine-County Bay Area. SLR inches converted from metric system and rounded.
DAMAGES
BRIDGING THE GAP 13
Figure 4. Total impacted USGS HERA parcel value estimates, including both improved and land value, by SLR summarized by county in 2020 USD for the nine-County Bay Area. SLR inches converted from metric system and rounded.
Figure 5. This map shows the parcel values (in 2020 dollars) aggregated by City that may be affected by 0.8 feet or 3.3 feet of sea level rise alone, and then sea level rise in combination with a 100-year storm (a 1% chance happening in each year). Cities in the North and East Bay experience lower parcel value damages from sea level rise compared to cities in Marin, Santa Clara, and San Mateo. Grey colored cities have no measured parcels inundated at that level.
DAMAGES
14 BRIDGING THE GAP
Property Damages by County and City
Comparing sea level rise impacts around the Bay
Area by county, San Mateo County could experience
the highest overall property damages from sea level
rise alone (see Figure 4). Alameda and San Francisco
Counties both face relatively low property damages at
lower flood levels but experience dramatic increases
in damages as sea levels rise. The earliest impacts are expected in Marin and Santa Clara Counties with steady
increases as sea levels rise. Contra Costa County in the East Bay and Solano, Sonoma and Napa Counties in
the North Bay all have relatively low property damages
from sea level rise compared to the rest of the Bay
Area.
Comparing sea level rise impacts around the Bay Area
by city (see the maps in Figure 5), the earliest impacts at 0.8 ft of SLR are spread throughout the Bay Area,
with greatest damages seen in Palo Alto, San Rafael,
Richmond, and Redwood City. At 3.3 feet of SLR, the
highest value property damages are concentrated in
cities in San Mateo County such as Foster City*, San
Mateo and Redwood City.
Sea Level Rise Damage Unknowns
Here we list several categories of SLR damages and
impacts not covered in this paper. Many of these need
further economic analysis and could draw on existing
funding sources specifically targeted at researching
these topics.
Infrastructure Damages From SLR
The monetary damages from SLR cited above only
include property value damages and do not include
monetary damages to public infrastructure such as
wastewater treatment plants, water treatment plants,
roads, subways, railroads, wells, septic systems,
landfills, and other such items. Damages from direct
and indirect impacts to infrastructure, such as electrical system damages from contact with water, structural
damages, or an interruption or shutdown of systems
1 Befus et al., “Increasing Threat of Coastal Groundwater Hazards from Sea-Level Rise in California.” * A t the time of writing, the Foster City Levee Improvements Project is currently under construction are likely to be very high. Wastewater and stormwater
conveyance systems serving communities around the
Bay were constructed assuming static Bay water levels.
Federal funding for infrastructure may be an additional revenue stream for researching these impacts.
Groundwater Damages From SLR
The economic models above are focused on shoreline
flooding and do not include groundwater impacts in
addition to sea level rise flooding. Groundwater will
begin to rise as sea level rises, adding more extensive flooding than originally thought and potentially
impacting existing flood protection.
Rising groundwater from the tidally influenced Bay can
potentially corrode underground pipes, create increased roadway failure, leach contaminants from landfills,
cause reduced sewer and septic drainage, and cause
other damages to underground utilities and structures.
It also has the potential for mobilizing contaminants in soils currently above the water table as the water table rises with higher sea levels, leading to the need for
expensive cleanup efforts. These additional damages
from groundwater impacts are not included in our
property damage costs listed above and will likely add
significant damage costs.
A recent USGS study found that with 3.3 ft of sea level rise, areas flooded from below via groundwater are
predicted to expand about 160 to 430 feet inland which
could correspond to around a 20% increase in the total
flooded area, and that low-lying coastal communities
such as those around San Francisco Bay are most
at risk.
1 At the time of this paper USGS, SFEI and UC
Berkeley are also conducting studies to explore how
groundwater will impact our existing sea level rise
estimates in the Bay Area.
DAMAGES
BRIDGING THE GAP 15
Social and Environmental Costs from SLR
Social and environmental costs, or non-market costs,
from sea level rise are important to consider when
looking at monetary costs throughout this paper,
as many of these damages have been ignored in
traditional cost-benefit analyses (CBA) of adaptation
project proposals. However, many funding programs,
such as from FEMA or US Army Corps of Engineers,
have recently been changing their CBA formulas to
include harder to quantify social and environmental
costs and benefits in determining whether a project is
eligible for funding.
The ART Bay Area report completed an analysis of non-
monetary flooding impacts.1 Some high-level findings
show that with three feet of flooding, anticipated to
occur over the next 40 to 100 years, we could see
regionwide flooding impacts to various systems. The
following list includes some of the major takeaways:
• At 36” TWL, impacts to critical regional habitats and ecosystem services reach near-peak levels.
• The Bay Bridge touchdown starts to flood, severely
impacting cross-bay movement. Over 33 million
annual passenger boardings and 1.6 billion pounds
of cargo at airports are at risk.
• Significant jumps in impacts continue in Priority
Development Areas, with 154,640 planned jobs and
64,400 planned housing units at risk around the
region.
• Impacts in socially-vulnerable communities reaches
nearly 15,000 households, with over 2/3 of these
also exposed to contaminated sites.
The consequences listed above are not included in the
property damages from sea level rise estimated in this
chapter, which is important to consider when looking
at total damages to the Bay Area, as ‘true’ costs will
be much higher than just property damages. There is
a need for more thorough analysis of the economic
1 Adapting to Rising Tides 2020. Adapting to Rising Tides Bay Area: Regional Sea Level Rise Vulnerability and Adaptation Study. Bay Conservation and Development Commission (BCDC) and Metropolitan Transportation Commission/Association of Bay Area Governments (MTC/ABAG), San Francisco CA.
consequences of social and environmental damages
caused by flooding in the Bay Area.
Figure 6- Map showing the Bay Area block groups (blue areas) with high contamination vulnerability and exposure to 3 feet of SLR. Source: ART Bay Area.
DAMAGES
16 BRIDGING THE GAP
Socioeconomic Costs
The economic models based on property damages
above do not include full monetary damages to
communities themselves, such as the impacts to jobs,
housing prices, commerce, commuting, recreation,
health and wellbeing, displacement, and vulnerable
residents.
The effects of climate change and sea level rise will
not be felt by all people equally. Even in cases where
flooding is comparable, existing social and economic
conditions, such as community resilience, social
capacity, and individual and community resources, as
well as existing contamination burdens, will influence
how severe the disruption will be across households.
Many disadvantaged communities are in low-lying
areas surrounded by contaminated lands, such as
Pittsburg and Oakland in the East Bay, San Rafael in
the North Bay, or Alviso in the South Bay (see Figure
6). These contaminants could become mobilized
during flooding, potentially polluting nearby lands. This will create huge unknown costs for remediation and
cleanup in communities, as well as health impacts. This has environmental justice concerns, putting the burden
on low-income communities of color.
Further, the flooding pressure on low-lying areas will
increase displacement, which will hit the already
disadvantaged communities hardest, since these
communities generally have lower rates of flood
insurance and savings to relocate easily.
Environmental Costs
ART Bay Area and the Natural Capital Project
determined there are 35,150 acres of tidal marsh
submerged at three feet of sea level rise, which
is within the range of 2060-2070 projections. This
translates into an economic loss of between $88.7
million to $11.14 billion one-time in environmental
and recreational benefits based off estimates used by
the EPA.1 Ecosystems also give value in stormwater
retention, carbon sequestration, and biodiversity.
1 Raheem et al., “The Economic Value of Coastal Ecosystems in California.” 2 Smith and NOAA National Centers For Environmental Information, “U.S. Billion-Dollar Weather and Climate Disasters, 1980 - Present (NCEI Accession 0209268).”
As mentioned above, many environmental damages run
the danger of being ignored in cost-benefit analyses of adaptation project proposals. This white paper does not include extensive research on ecosystem valuations for
the Bay Area. However, ecosystem valuations, which
assigns a value to the ecosystem or the service it
provides (such as water filtration or wave attenuation), have evolved to provide a more sophisticated and
acceptable way to summarize the benefits the
environment brings to an area. For resources on the
impacts of losing ecosystem functions, recreation,
carbon storage, and endangered species, please see
ART Bay Area’s work with the Natural Capital Project for more information.
Comparison of Economic Damages of SLR to
Other U.S. Natural Disasters
Sea level rise is only one of several natural hazards
posing threats to societies, ecosystems and economies
in the Bay Area and around the globe. The economic
damages caused by some of these recent events have
been quantified and can allow us to compare these
historic costs to the projected costs of sea level rise in the Bay Area. This can help understand the context and
magnitude of these costs and the funds we will need
to mobilize to prevent some of these damages. SLR is
comparable the most extreme and expensive natural
disasters in terms of economic costs. All past events
have been adjusted to 2020 dollars to allow for more
meaningful comparison.
The U.S. has sustained 273 weather and climate
disasters between 1980 and 2020 where overall
damages reached or exceeded $1 billion (2020 U.S.
dollars). The total cost of these 273 events exceeds
$1.8 trillion.2 On average this equates to $45 billion
annually across the United States and will only increase with climate change. Just in the last five years there
has been $535 billion in damages, or $107 billion per
year, twice the average damages experienced over the
last 40 years.
DAMAGES
BRIDGING THE GAP 17
The Bay Area’s Loma Prieta Earthquake (1989) caused
$12.5 billion in damage (2020 U.S. dollars)1,2, Hurricane Katrina in the New Orleans metro area (1995) caused
$144 billion in damage (2020 U.S. dollars)3, Superstorm Sandy in the New York metro area (2012) caused $55.6
billion in damage (2020 U.S. dollars)4, and Northern
California’s recent Camp Fire (2018) caused $17
billion in damage (in 2020 U.S. dollars).5 Sea level rise property damages in the Bay Area are on par some
of the nation’s worst fires and storms. In comparison,
3.3 feet of SLR with a 1-year storm could cause $55.8
billion of losses in parcel values in the Bay Area, almost three times the damages caused by the Camp Fire and
close to the damages caused by Superstorm Sandy.
At 6.6 feet of SLR with a 1-year storm, the Bay Area
could see upwards of $118.8 billion worth of parcel
value losses which makes it comparable with Hurricane
Katrina, the costliest natural disaster in US history as of 2020.6 A comparison of these damages can be seen in
Figure 7.
1 Note: population size and GDP in the Bay Area has increased drastically since 1989, which would result in higher damages if it happened today
2 Board and Council, Practical Lessons from the Loma Prieta Earthquake. 3 Knabb, Rhome, and Brown, Tropical Cyclone Report Hurricane Katrina (AL122005) 23-30 August 2005. National Hurricane Center.
4 Blake et al., Tropical Cyclone Report: Hurricane Sandy (AL182012) 22 – 29 October 2012. National Hurricane Center. 5 Faust and Steuer, “New Hazard and Risk Level for Wildfires in California and Worldwide.” 6 statista, “Most Expensive Natural Disasters in the United States as of April 2020.” Typically, disaster events like wildfires, earthquakes, and storms occur suddenly and temporarily (i.e.
structures can be rebuilt after the disaster event). Sea level rise and its associated damages on the other
hand is a slow-moving and permanent disaster. The
fact that damages will worsen over time rather than
all at once could allow for more time to prevent or
reduce these damages, limiting their economic impact.
However, unlike other disaster events, damages
due to SLR will also hit the entire U.S. coast and the
world simultaneously, creating more competition for
adaptation dollars. These factors point to advantages
to paying for adaptation now versus waiting to adapt
later when damages have begun to aggregate and there
is a high competition for disaster funds.
Figure 7. The economic damages of past and projected U.S. natural disasters adjusted to 2020 U.S. dollars.
FUNDING NEEDS
18 BRIDGING THE GAP
Funding Needs: Cost Estimates for Adaptation in the Bay 1 White House Office of Management and Budget, “Discount Rates for Cost-Effectiveness, Lease Pur chase, and Related Analyses (2021).”
This section uncovers the potential costs of building
physical adaptation projects in the Bay Area but
excludes costs and trade-offs of planning, land use
policy (i.e., managed retreat) or other regulatory
changes. As cited in the previous section, there
are huge economic consequences of sea level rise
adaptation inaction. Shoreline protection projects,
despite their high upfront costs, could reduce total
costs over time as they may reduce the magnitude
of flood damages from sea level rise and storms.
However, planning and building adaptation projects will also cost the region and municipalities funds that they do not currently have a budget for.
Costs vs Benefits
A study by the National Institute of Building Sciences, called “Natural Hazard Mitigation Saves: 2019 Interim
Report”, determined that there is a savings of $6 in
recovery costs for every $1 spent on hazard mitigation
efforts through federal grants, and savings of $4 in
recovery costs for every $1 spent surpassing standard
building codes for floodproofing when using a 2.2%
cost-of-borrowing discount rate. This makes a strong
argument for building adaptation into the region at
an early phase to reduce total spending over time.
However, there are multiple reasons why a traditional
cost-benefit analysis may not support the cost of
adaptation projects, as outlined in Damages. These
should be carefully weighed when identifying costs and
benefits.
Discount Rates
The typical infrastructure discount rate used in
discounted cash flow analysis, which aims to capture
the time value of money as well as the uncertainty of
cash flow, lowers the value of investments into the
future. A dollar today is worth more than a dollar in the future because one can invest it with interest, meaning the sooner money is received, the more interest it can
accrue and the more it will be worth in the future. In the U.S., the White House Office of Management and
Budget (OBM) has commonly used a 7% discount rate
for infrastructure projects. When using a 7% discount
rate, projects that have long lifespans over several
decades have a harder time reaching a positive Benefit- Cost-Ratio, which is required to be approved and
funded. This is particularly a barrier for large, long-term climate adaptation projects. In the years since 2009,
the discount rate has been steadily falling and is now
at a historical low, making large infrastructure projects more attractive. For 2021, the OBM has set the 30-year
nominal discount rate at 1.7%. The used rate will affect the affordability of adaptation projects.
1 Gray Versus Green Adaptation
Across the region, shoreline adaptation projects
could include gray, green, and hybrid infrastructure
strategies to protect against flooding and sea level
rise. Gray infrastructure refers to hardened, engineered approaches such as sea walls, levees, and rip rap (large rocks). Green infrastructure along the shoreline, also
known as nature-based adaptation or living shorelines,
refers to the use of natural systems such as salt
marshes, oyster reefs, and/or beaches for improved
flood protection. Hybrid approaches include projects
that use elements of both green and gray, such as
“horizontal levees” (also called ecotone levees) which
use natural marsh habitat on the waterside of a gently
sloping levee to stabilize the shoreline and prevent
erosion while also creating habitat and space for marsh to migrate upwards as sea levels rise.
Traditionally, gray infrastructure has been the common
approach to building flood protection. However, there
is an increasing recognition that green infrastructure, when used in the right conditions, can have additional
multiple benefits. For example, in addition to reducing flood risk, nature-based approaches can increase
biodiversity and wildlife populations, improve water
FUNDING NEEDS
BRIDGING THE GAP 19
quality by reducing pollution loads, sequester and store carbon, and enhance recreation opportunities and
access to nature. These additional benefits that nature provides to people are called ecosystem services.
Because these natural services are not traded in our
economic markets, they are often overlooked in cost-
benefit analyses. However, decades of research on the
economic value of ecosystem services demonstrates
that, when accounted for, these natural benefits can
have immense economic value to society.
Gray infrastructure may have lower upfront costs,
dependent on the project design, but there are also
hidden costs to using traditional gray infrastructure
approaches, such as long-term maintenance costs hat
can be expensive compared to resilient nature-based
alternatives.1 Traditional flood protection strategies run the risk of catastrophic damage and cost in disaster
scenarios such as earthquakes or extreme storms,
as demonstrated by the Gulf hurricanes of the 2010s,
while nature-based solutions are often designed for
resiliency and mitigation of flooding impacts.2 For
example, according to the National Oceanic and
Atmospheric Association (NOAA), just 15 feet of salt
marsh can absorb 50 percent of wave energy, reducing
flood impacts.3
Conversely, nature-based adaptation approaches
could have higher upfront costs but provide longer-
term benefits and flexibility, resulting in economic
feasibility.4 Nature-based approaches, such as
established wetlands, often require much less
maintenance after a storm because they can recover
and adapt to changes—they are more resilient. The
average cost-benefit ratio of nature-based adaptation
1 Smith et al., “Living Shorelines Enhanced the Resilience of Saltmarshes to Hurricane Matthew (2016).” 2 Environmental and Energy Study Institute, “Nature as Resilient Infrastructure: An Overview of Nature-Based Solutions.” 3 National Oceanic and Atmospheric Administration, “What Is a Living Shoreline?” 4 Reguero et al., “Comparing the Cost Effectiveness of Nature-Based and Coastal Adaptation.” 5 Reguero et al., “Comparing the Cost Effectiveness of Nature-Based and Coastal Adaptation.” 6 “Natural Infrastructure.”
7 Francisco, “San Francisco Bay Plan.”
8 “Climate Ready Program – California State Coastal Conservancy.” 9 “Safeguarding California Plan: 2018 Update.”
10 “NOAA Office for Coastal Management.”
11 Goals Project. 2015. The Baylands and Climate Change: What We Can Do. Baylands Ecosystem Habitat Goals Science Update 2015 prepared by the San Francisco Bay Area Wetlands Ecosystem Goals Project. California State Coastal Conservancy, Oakland, CA. measures is estimated to be above 3.5.5 Wetlands
and other shoreline habitats that are connected to
an adequate supply of sediment and provided space
to migrate upwards may be able to keep pace as
sea levels rise and provide long term protection and
ecosystem services benefits that are not possible
with standard gray approaches. While recognizing
these benefits, there are significant areas of the Bay
with existing man-made shorelines, including ports
and airports. Incorporating nature-based adaptations
in areas with man-made shorelines adjacent to
deep water poses unique challenges which must be
assessed relative to the potential habitat benefits. More research is required to understand how best to promote
habitat improvements in these areas, including
ecological seawalls and related approaches.
Additionally, the State of California, among others, are increasingly prioritizing the use of green infrastructure due to the multiple and long-term benefits of such
projects.6,7,8,9,10 Recent state and federal legislation suggest that support for nature-based infrastructure
is on the rise (such as SB-576 (2019), AB-65 (2019),
and HR-3115 (2019)). For example, AB-3012 (2018)
requires the Coastal Conservancy to prioritize climate
change projects that maximize public benefits such as
reducing emissions of greenhouse gases, preserving
and enhancing coastal wetlands and natural lands,
conserving biodiversity, providing recreational
opportunities, reducing flood risk, and enhancing fish
and wildlife habitat.
Additionally, the San Francisco Bay Area has long held
regional habitat goals, such as the Baylands Ecosystem
Habitat Goals11, seeking to restore formerly destroyed
FUNDING NEEDS
20 BRIDGING THE GAP
wetlands and other coastal habitats to bring back the
benefits that natural systems provide – including flood protection. Due to this, there is an increased amount of funding available to advance nature-based adaptation
projects, which can help offset some of the upfront
costs and potentially make a nature-based design
more cost effective through access to competitive
funding. In general, BCDC’s Bay Plan, through the
Fill for Habitat Amendment (BPA 1-17)1, the ART
program, and Bay Adapt recommend consideration
of green infrastructure strategies before resorting to
gray strategies to capitalize on multi-benefit projects wherever possible.
Regional Adaptation Cost Estimates
Few studies have taken on the comprehensive cost of
sea level rise adaptation over the next several decades.
This is because of the many variables and unknowns
associated not just with which adaptation solutions will be put in place, but the wide range of cost variables for adaptation due to lack of precedent, local conditions,
and myriad other factors. Below are two known studies
that focus on the Bay Area, though the differences in
assumptions and limitations of the studies primarily
show us how much work is left to be done.
U.C. Berkeley
A 2017 study by Hirschfeld and Hill from the University of California Berkeley estimates it will take at least $40 billion (2020 USD$) to raise all existing flood control structures along the boundary between saltwater
habitat and freshwater habitat (which the study calls
Shoreline B) throughout the Bay Area to prevent
overtopping from 0 to 3.3 feet of sea level rise. Raising existing structures to prevent overtopping between
3.3 feet and 6.6 feet of sea level rise added at least
$106 billion (2020 USD$) to the cost of adapting from
1 Goldzband and Hall, “Staff Report and Preliminary Recommendation for Proposed Bay Plan Amendment No. 1-17 Concerning the Update of the Bay Plan Fill for Habitat Policies.”
2 Hirschfeld and Hill, “Choosing a Future Shoreline for the San Francisco Bay.” 3 Barnard et al., “Dynamic Flood Modeling Essential to Assess the Coastal Impacts of Climate Change.” 4 Hirschfeld and Hill, “Choosing a Future Shoreline for the San Francisco Bay.” 5 MTC/ABAG, “Plan Bay Area 2050", https://www.planbayarea.org/sites/default/files/documents/Plan_Bay_Area_2050_ October_2021.pdf
6 AECOM, “A Resilient Transportation System for Safe and Sustainable Communities - Final Draft Regional Adaptation Strategies Cost Estimating Memo.”
0 to 3.3 feet of SLR. Raising sea walls is the most
significant cost factor, responsible for 70-90% of total adaptation costs.2 These estimates do not include
costs associated with companion improvements to
manage stormwater. The lowest points along the
shoreline are the avenues for stormwater discharge:
as we raise shorelines, new stormwater management
strategies will be required.
As sea levels rise, costs rise exponentially and are
approximately three to four times higher for the 6.6 feet SLR scenario as compared to the 3.3 feet scenario.3
Additionally, building shoreline infrastructure to prevent storm flooding in addition to sea level rise doubles the costs.4 These values also only account for existing
flood control structures, not new flood control that will need to be built along portions of the shoreline that do not currently flood but will in the future.
MTC/ABAG
Plan Bay Area 2050 (2021) is the first time that MTC/
ABAG assessed the regional funding need for sea level
rise adaptation, assuming that the region would see 3
feet of inundation by 2050, with 2 feet of permanent
inundation, and a foot of flooding due to storms and
king tides. Plan Bay Area 2050 analyzed that adapting
key areas of the shoreline for the impacts seen by
2050 may cost $19 billion and could protect 98% of the
region’s 2050 existing and future households potentially at risk of flooding from sea level rise.5 This high-level cost analysis was developed with the help of multiple
sources, including AECOM, Caltrans, national cost
standards with location adjustment factors, and local
Bay Area projects. This cost includes the planning,
design, permitting, environmental clearance, and
construction cost of shoreline protection infrastructure.
It does not include environmental mitigation, land
acquisition, utility relocation, and maintenance costs.6
FUNDING NEEDS
BRIDGING THE GAP 21
Documented Adaptation Project Costs
This section illustrates what we know about the current adaptation costs in the Bay Area. It aims to capture
real costs for adaptation using projects documented
through the San Francisco Bay Restoration Authority
funded by Measure AA, EcoAtlas, MTC/ABAG’s AECOM
adaptation costing study, and other Bay Area case
studies.
San Francisco Bay Restoration Authority and
EcoAtlas
EcoAtlas, a Bay Area project tracking tool, covers
wetland restoration, mitigation, habitat conservation,
and shoreline adaptation projects. EcoAtlas has tracked about $1 billion of built or in-progress projects in the Bay Area over the last 40 years (see Figure 8), a mere
fraction of the adaptation cost estimate needed for
shoreline protection across the region ($19 billion
for 2 ft of SLR). Around $20 million of this funding
comes from the relatively recent San Francisco Bay
Restoration Authority’s Grant Program, funded by a
$12 annual parcel tax for 20 years to fund Bay Area
habitat restoration projects. The Restoration Authority and the regional measure that funded it, Measure AA,
is discussed in more depth in the “Funding Adaptation
Projects” chapter.
Adaptation costs per linear foot of shoreline
Bay Area specific costs per linear foot for shoreline
adaptation measures were estimated by MTC/ABAG
and AECOM for use in the Plan Bay Area 2050 Draft
Blueprint, which were utilized for their regional cost
estimate. These costs assume a design of 9 feet
of elevation (7 feet of sea level rise plus 2 feet of
freeboard, or extra headroom). These costs do not
include environmental mitigation, land acquisition,
utility relocation and maintenance costs, but they
do include planning, design, and construction. It is
important to note that these costs per linear foot are
for magnitude of scale only and should not be used to
cost specific projects around the Bay.
MTC/ABAG and AECOM’s cost estimates are seen in
Table 4.
Table 3. Summary table of potential sea level rise adaptation costs for the Bay Area.
Sea Level Rise Scenario Adaptation Costs (2020 dollars) of Adaptation in the Bay Area Source
2 feet $19 billion Plan Bay Area 2050 Draft
Blueprint, MTC/ABAG
3.3 feet $40 billiona
Hirschfeld and Hill, “Choosing
a Future Shoreline for the San
Francisco Bay.”
6.6 feet $146 billiona Hirschfeld and Hill
a Low-end of the estimate range. Only includes costs of adapting existing flood control structures, not new projects.
FUNDING NEEDS
22 BRIDGING THE GAP
What is important to remember when looking at
standardized costs is that they do not account for
special site conditions. Environmental remediation
can add magnitudes to the original cost estimates.
Complex construction conditions such as in a highly
developed area like the San Francisco Waterfront
will also add magnitudes. Additionally, other regional
hazards can also exacerbate costs. For example, the
San Francisco Embarcadero Seawall, which includes
a seismic retrofit in addition to its difficult urban
placement with complicated intersecting infrastructure, comes in at approximately $86,500 per linear foot,
or almost thirteen times as much as the high end of
AECOM’s sea wall estimate.
We arrived at another linear foot estimate using nine
adaptation projects provided by San Francisco Bay
Regional Coastal Hazards Adaptation Resiliency Group
Figure 8. Costs of Bay Area habitat projects by project status. *Dates not consistently available to adjust to 2020 U.S. dollar values.
Table 4. AECOM Cost Estimate Ranges for different SLR Adaptation Strategies in the Bay Area (2019 USD).
Strategy Typology: Low Cost Estimate per LF: High Cost Estimate per LF:
Traditional Levee $800 $3,520
Seawall $3,870 $6,800
Horizontal Levee $2,300 $5,800
FUNDING NEEDS
BRIDGING THE GAP 23
(CHARG)1 by dividing project design costs by each
project’s linear footprint (see Figure 9). These projects vary in the type of shoreline protection they use.
The analysis results in a median range of about
$2,600 - $5,250 per linear foot for currently underway
or planned adaptation projects in the Bay Area. This
range is comparable to AECOM’s engineering estimates
for horizontal levees and seawalls, but higher than
traditional levees, potentially due to the inclusion
of additional project costs such as environmental
mitigation, land acquisition and easements and utility
relocation.
When looking at the average instead of the median
range, the cost balloons to $15,500 -$27,700 per
linear foot due to the larger and often more uncertain
cost estimates of projects such as the San Francisco
Airport, Dumbarton, SR-37 and the San Francisco Sea
Wall.
Individual Bay Area Adaptation Projects
(Case Studies)
Comparing current individual Bay Area adaptation
projects, including both those in conceptual phases
and in design planning, shows greatly varying project
costs based on size and location (see Figure 10), and
even when adjusting for shoreline length (see Figure
9). They also differ in flood protection targets, with
some projects aiming for FEMA accreditation, which
covers current storm flooding (for protection under
the National Flood Insurance Program) and others for
protection from higher SLR scenarios. Not building to
similar standards may pose long-term regional risks
to the region because water knows no jurisdictional
boundaries—if a neighboring city builds to a lower flood protection standard, that could put its neighbors at risk.
See the Appendix for short profiles of larger Bay Area
adaptation projects including their name, SLR flood
protection targets, and total cost estimates.
1 “Sea Level Rise Resiliency Map – San Francisco Bay Regional CHARG.” Project Cost Unknowns
This section touches on some of the unknown
project costs related to flood adaptation, but is not an exhaustive list. The costs of multi-hazard adaptation,
such as seismic safety and stormwater management
as well as asset-specific adaptation for large, critical infrastructure projects such as the region's ports and
airports require their own analysis and discussion.
Adapting to Groundwater Rise
Most adaptation cost estimates for the region are
for the cost of building linear protection along the
shoreline to protect the land from the Bay. With
groundwater rise, flooding would occur from below,
meaning traditional overland flood barriers, such
as levees, would do nothing to stop the upward rise
of water from the ground. Subsurface barriers and
pumps would be added costs not currently integrated
into many adaptation projects nor projections of
costs. In addition, contamination in the soil could be
mobilized through rising groundwater levels and affect
groundwater quality and enter communities.
Cost of Fill for Adaptation Projects
Fill has many issues that increase the cost of
adaptation projects. One issue is that fill is extremely expensive to move around in large volumes and has
no stockpiling locations close to shoreline projects,
making it one of the highest costs in many adaptation
projects. There are also strict regulatory requirements on the quality of beneficially reused soil. Additionally, there is a lack of affordable and accessible stockpiling locations in the Bay Area for large quantities of soil.
Cost of Dredging for Beneficial Reuse
Adaptation measures that use dredged sediment must
ensure the sediment quality is appropriate for the use.
Sediment dredged for navigation purposes represents
a ready supply of fine grain sediment that works well
for wetland restoration projects. There are a limited
number of navigation dredging projects that produce
FUNDING NEEDS
24 BRIDGING THE GAP
sandy sediments rather than mud. As a result, much
of the beneficial reuse of dredged sediment – over 25
million cubic yards since 2000—has been used at seven
wetland restoration sites. The use of dredged sediment
in these projects has been to fill deeply subsided
baylands to elevations suitable for quick colonization
of marsh vegetation, which in turn provides habitat, a
place for flood waters to be absorbed, and attenuation
of waves generated on the shoreline. When dredged
sediment is not beneficially reused, it is treated as
a waste product and disposed aquatically, either at
dispersive deep in-bay disposal sites or 50 miles out to sea at a deep ocean disposal site. In these instances,
the sediment is unlikely to support adaptation to rising seas either through natural sedimentation at existing or restored marshes.
While navigation dredged sediment is readily available
and can be delivered in large quantities – 4,000 to
6,000 cubic yards at a time compared to 10 cubic
yard dump trucks--there are other costs that need
to be considered. Currently the dredging project
sponsor pays both for the dredging and the disposal
or placement of the dredged sediment. Aquatic
disposal, particularly in-Bay disposal, is the cheapest method of disposing of the sediment. Ocean disposal
can be similar in cost, or slightly to significantly less expensive than beneficial reuse. When a project
places dredged sediment at a beneficial reuse site,
the dredging project sponsor incurs what is known as
the incidental cost of beneficial reuse. This incidental cost consists of additional transportation time, any
tipping fees charged by a restoration site, and the
cost of bringing an offloader, if individually provided by the contractor. For the US Army Corps of Engineers
(USACE), providing the funding for the incidental cost
has been a challenge due to an internal policy known
as the federal standard. The USACE has stated that
it will beneficially reuse its dredged sediment if that site represents the least cost alternative, is required Figure 9. Costs of Bay Area sea level rise adaptation projects per linear foot of project footprint extracted from the CHARG Sea Level Rise (SLR) Resiliency Map.1 Project lengths for Hayward and Oro Loma infrastructure were not available in the CHARG dataset at time of analysis. 1 “Sea Level Rise Resiliency Map – San Francisco Bay Regional CHARG.”
FUNDING NEEDS
BRIDGING THE GAP 25
by a federal agency (i.e., the Federal Endangered
Species Act) or if another entity provides the additional funds. If the USACE took all of its navigation dredged
sediment to beneficial reuse sites an additional 1 to
1.5 million cubic yards of sediment could be provided
to restoration and adaptation projects, as the USACE
is the largest dredger in the Bay and the volume of
sediment it produces far exceeds others in the dredging community.
Regarding the receiving site, additional funding is
needed, particularly for restoration projects working
with limited budgets to prepare sites for sediment
delivery and management. The ideal beneficial reuse
site has subsided areas that need significant volumes
of sediment to create the economies of scale needed
to offset the challenges. Dredged sediment generally
needs to be pumped off of nearby barges to the
site. This entails offloading equipment, pipes, and
either electricity or diesel to power the equipment.
The sediment must be slurried (mixed with water –
generally 20% sediment to 80% Bay water) to pump
it to the site. Once on the site, the slurried sediment is allowed to settle out of the water on site, and
then the water is either discharged back to the Bay
or held on site. In either case, water management
must be incorporated. In some sites, the additional
water management requires containment cells or
raising existing levees to contain the water. These
considerations mean that additional planning, site
preparation, and management must be built into
the project construction design and sequencing. As
described, the project complexity is increased at
the outset of the project but has shortened the time
needed for wetlands to fully develop by 30 to 40 years, thus providing adaptation benefits much sooner than
waiting for sediment to be naturally delivered.
Timing of Project Costs
Adaptation projects around the bay will likely be built slowly over time rather than all at once. Additionally, as sea levels rise, existing shoreline protection
infrastructure may be modified to expand its lifespan
and provide protection at higher sea levels. This
creates an unknown in being able to correctly predict
annual project costs over time on a regional scale.
Construction Costs
Construction costs might change over time if the
industry can train and retain a skilled workforce for
building green and natural infrastructure. Additionally, regulations regarding construction processes may be
adding additional burden, costing time and money,
and making projects more challenging, infeasible, or
limiting innovative project types.
Cost of Environmental Permits and
Regulations
Permitting for shoreline adaptation projects is a
quagmire of requirements from different agencies
that derive from different authorities and may not
have formal mechanisms for coordination, creating
sometimes conflicting requirements as well as complex
and time-consuming permitting processes. Currently,
the permitting process for complex, multi-benefit
projects is burdensome in terms of cost, and time and
not always successful. The more complex a project,
the longer the regulatory timeline. Looking long-term,
the newly formed multi-agency San Francisco Bay
Restoration Regulatory Integration Team (BRRIT) may
eventually take on adaptation projects in addition to
wetland restoration projects, increasing the viability
of adaptation projects and reducing costs due to
regulatory agencies working together.
Disproportionate Costs of Environmental
Injustice on Disadvantaged Communities and
Federal Funding Formulas
When it comes to the costs of adaptation,
disadvantaged communities face environmental
injustice due to sea level rise. As already mentioned,
many low-income communities are in low-lying areas
adjacent to hazardous waste sites. This means the
cost of adaptation projects in these areas may be
much higher due to the environmental remediation
costs, which can add millions to projects. Additionally,
FUNDING NEEDS
26 BRIDGING THE GAP
hazardous waste sites and/or landfills are not
designed to be permanently submerged, meaning
many sites that are considered “cleaned” may need
further remediation. To place these cost burdens on
vulnerable communities is to further environmental
injustice in the Bay Area.
Low-income communities also do not have the level
of public and private investment that will produce the
level of flood-induced economic damages required
to compete for federal funding using a strict benefit-
cost ratio approach. Congress and the White House
– including the Office of Management and Budget –
should revise federal benefit-cost requirements with
a specific equity focus that will enable disadvantaged
communities to compete for funding from the U.S.
Army Corps of Engineers and the Federal Emergency
Management Agency, among others. There is progress
on this front: Section 110 of the Water Resources
Development Act of 2020 directs the U.S. Army Corps
of Engineers to issue final agency procedures for
the Principles, Requirements, and Guidelines (PR&G)
which will allow the Corps to fully identify the national, regional, environmental, and societal benefits of future water resources development projects.
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Funding Supply: Funding for Adaptation Projects
1 https:/ /www.usace.army.mil/Missions/
This section explores federal, state, regional and local funding opportunities and provides an understanding
of magnitude available for resilience. It also considers funding sources not specifically designated for
resilience, but parts of which may be re-appropriated
for adaptation.
It is not always clear to communities who is “on the
hook” for paying for adaptation – instead, funding for
adaptation projects will have to come from a variety
of sources. In addition, it is not just funding streams earmarked specifically for adaptation that will be
utilized, but funding currently used for a wide variety of city and county projects will need to incorporate
resilience as a major component of project planning
and implementation costs. For instance, new
transportation projects in the future floodplain will need to examine raised streets, bridges and transit facilities and new wastewater and stormwater management
infrastructure will need to navigate higher shorelines
and discharge to higher total water levels in the Bay.
Incorporating resilience improvements to future capital projects that will be funded by some of existing local, state, and funds will be a likely strategy for closing the cost gap, in addition to generating new sources through new taxes and fees. However, creating new taxes and
fees to fund sea level rise adaptation projects faces
challenges in California, discussed in more detail later in this section. Novel solutions such as risk funding
through insurance could provide additional resources.
Some adaptation solutions could deepen inequity and
increase vulnerabilities for low-income communities.
When considering funding and financing strategies,
equity needs to be intentional, explicit, and embedded
across adaptation outcomes. Funding strategies
that do not consider how costs will be transferred to
lower-income communities will further the systematic
inequities created by the planning community
throughout U.S. history. While this paper does not
focus on analyzing individual financing tools, this is an important point to note for the region when deciding
how to fund and finance these shoreline projects
equitably.
Federal Funding
Federal funds currently play a large role in planning and building infrastructure projects and in local economic
development. For example, the Water Resources
Development Act (passed on average every 2 years)
authorizes and appropriates funding for U.S. Army
Corps of Engineers to work with local partners to study, build, and operate and maintain Civil Works projects.
FEMA funds resilience through a number of mitigation
and recovery programs, including Building Resilient
Infrastructure and Communities (BRIC). Community
Development Block Grants (CDBG) from the U.S.
Department of Housing and Development (HUD) are
also a potential source of funding. These and other
existing funding sources will likely play a significant role in adaptation funding.
Adaptation-Specific Federal Funding
U.S. Army Corps of Engineers (USACE) and the Water
Resources Development Act
The U.S. Army Corps of Engineers (“USACE”) are the
nation’s flood risk management experts. With funding
authorized by Congress through the Water Resources
Development Act, USACE works with communities
to reduce risks in coastal areas and build resilience
to coastal hazards through an integrated planning
approach.
USACE has a number of mission areas authorized by
Congress that intersect with flood risk management
and protection of ecosystems
1, including the Civil
Works Flood Risk Management Program and Levee
Safety Program.
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28 BRIDGING THE GAP
Typically, USACE commences potential flood risk
management project planning after Congress
authorizes a general investigation. A general
investigation is a $3 million, 3-year study to determine whether there is a federal interest in a federally-funded flood risk management project. This process uses
a benefit cost ratio (BCR) to determine whether the
benefits of the project outweigh the costs, and this is part of the definition of federal interest. As discussed elsewhere in this paper, Congress, the Assistant
Secretary of the Army and USACE are all moving away
from a strict economic BCR approach towards an
approach that weighs regional, environmental, and
social benefits of projects.
If result of the feasibility study demonstrates s
a federal interest, the study process results in a
recommendation by the Chief of Engineers to Congress
to fund a flood risk management project. There are
several major USACE studies underway in the Bay right
now, including the South San Francisco Bay Shoreline
Project and the San Francisco Waterfront Flood
Resiliency Study.
After receiving an integrated Chief’s report and
recommendation, Congress authorizes funding for
projects in a Water Resources Development Act
(WRDA) and subsequently appropriates funding
through Energy & Water Development bills, subject
to a 1/3 local match requirement provided by local,
non-federal partners. The upper bound for federal
funding is limited only by the benefits (mainly avoided economic damages) that a project will produce. The
strict economic BCR analysis and the local match
requirement can be the barrier to receiving this type of funding for disadvantaged communities.
WRDA 2020 was passed as part of the December 2020
COVID-19 stimulus package, amending the Bay study
authority for Marin, San Mateo and San Francisco
counties to seek federal funding to combat sea level
rise and increasing the annual funding for bay wetland
1 “S.F .’s Embarcadero Seawall Is Surprise Beneficiary of Trump-Signed Spending Bill.” 2 https:/ /www.nytimes.com/2021/01/25/climate/fema-climate-spending-biden.html restoration from $5 million to $9 million. As discussed above, WRDA 2020 changes the way the U.S. Army
Corps calculates costs and benefits, which until now
required balancing the economic benefits of adaptation
against the full project budget, making it difficult for very expensive projects, such as the San Francisco
Embarcadero Seawall, to compete for federal funds.1
National Security
The United States officially recognized resilience in
the 2017 and 2021 “National Security Strategy,” which
states that we must enhance our resilience, including
the ability to withstand and recover from deliberate
attacks, accidents, natural disasters, as well as
unconventional stresses, shocks and threats to our
economy and democratic system. These strategies
have directed efforts from both FEMA and the U.S.
Department of Homeland Security (DHS).
FEMA
FEMA is one of the largest funders for adaptation
through their Pre-Disaster Mitigation (PDM) Grants,
Flood Mitigation Assistance (FMA) Program, and their
Hazard Mitigation Grant Program (HMGP). The PDM
and FMA both fund pre-disaster adaptation projects—in
2020 this amount totaled in $700 million nationally and, under the Biden administration, as much as $10 billion
could be made available for climate adaptation2.
The PDM Grant Program has been replaced with the
Building Resilient Infrastructure and Communities
(BRIC), which is designed to assist in pre-disaster
natural hazard mitigation to reduce overall risk from
future hazard events while also reducing reliance on
federal funding for future disasters. In 2017, $90 million was available nationally through PDM grants, and in
2020, $500 million was available through the BRIC this
program—a clear indication that the U.S. is taking pre- disaster mitigation seriously by increasing the funds
available before a disaster.
The FMA Program has the goal of reducing or
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BRIDGING THE GAP 29
eliminating insurance claims under the National Flood
Insurance Program (NFIP). In 2017 there was $160
million available nationally—for 2020 there was $200
million.
The key purpose of HMGP is to ensure that critical
mitigation measures to reduce the risk of loss of life
and property from future disasters are included during
the reconstruction process following a disaster. The
amount of HMGP funding available to the applicant is
based upon the estimated total federal assistance to
be provided by FEMA for disaster recovery under the
Presidential major disaster declaration. In 2019 FEMA
allocated around $90 million in resilience grants ($75
million from the BRIC program and $15 million from the
HMGP program) to the Bay Area according to MTC’s
Revenue Assessment.
FEMA also uses a strict benefit-cost ratio that
examines avoided economic damages. While this
is one important measure of the benefits of flood
risk reduction projects, FEMA – like USACE – should
consider a more holistic approach to assessing
projects benefits, particularly for disadvantaged
communities.
Department of Homeland Security (DHS)
In 2020 there were eight DHS preparedness (pre-
disaster) grant programs totaling nearly $1.8 billion.
These grants include the Regional Resiliency
Assessment Program (RRAP), which does regional
planning for resilient infrastructure—for example,
California’s water systems in the Central Valley were
analyzed for drought in 2016 and Southern California
in 2017. These voluntary, non-regulatory RRAP projects
are selected each year by the Department with input
and guidance from federal, state, and local partners.
They have focused on sectors such as Energy,
Transportation Systems, Commercial Facilities, and
Food and Agriculture. The goal of the RRAP is to
generate greater understanding and action among
1 Office for Coastal Management, National Oceanic and Atmospheric Administration, “NOAA’s National Coastal Zone Management Program Funding Summary 2019.”
public and private sector partners to improve the
resilience of a region’s critical infrastructure. Another preparedness grant is the Emergency Management
Performance Grants, which will provide more than
$355 million for 2020 to assist state, local, tribal, and territorial governments in enhancing and sustaining all- hazards emergency management capabilities. In 2020,
the Urban Area Security Initiative (UASI) will provide
$615 million to enhance regional preparedness and
capabilities in 32 urban areas, with 25 percent of these funds going to terrorism prevention.
National Oceanic and Atmospheric Administration
(NOAA)
The National Oceanic and Atmospheric Administration
(NOAA) is also a big player in resilience funding. In
2019 NOAA’s National Coastal Zone Management
Program invested over $75 million, allocated through
the Coastal Zone Management Act, to implement
coastal management programs in the 34 participating
states and territories. The federal funding was matched by nearly $63 million from state and local governments
and other partners. These funds were used to improve
public access, enhance hazard resilience, and fuel
the nation’s vibrant coastal economy. Two programs
were used to address coastal hazards: Protecting
and Restoring Coastal Habitat and Mitigating Coastal
Hazards. These two programs were 40% of the annual
budget, totaling $31.1 million in federal funds and
$24.4 million in matching funds.1
The current NOAA grants for 2021 total in $248.1
million nationally. Besides funding projects, they
also fund the science of climate change and coastal
resilience. In 2021, $200 million of this money is to go to research institutes to investigate severe storms, with $1 million going towards environmental literacy for
the Bay Area. The Climate Program Office is granting
$7.6 million for investments in regionally scaled,
interdisciplinary climate research and engagement on
reducing vulnerability through climate knowledge.
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30 BRIDGING THE GAP
National Fish and Wildlife Foundation (NFWF) & NOAA
In 2019, Congress funded the Supplemental
Appropriations Act of 2019, allowing grants to be
awarded through a partnership between the National
Fish and Wildlife Foundation (NFWF) and NOAA. They
launched the Emergency Coastal Resilience Fund two
months later to direct this money to help impacted
communities recover more quickly from and be
more prepared for future disasters with a focus on
strengthening natural systems. Congress provided
funding for Title IX of the National Oceans and Coastal Security Act, allowing grants to be awarded through a
partnership between NFWF , NOAA, Shell, and TransRe.
These grants were then awarded through the National
Coastal Resilience Fund.
NFWF and NOAA partnered to deliver $43 million in
grants to improve the resilience of local communities
and wildlife habitat in the face of increasingly severe and frequent natural disasters. The grants supported
natural and nature-based infrastructure for people
and wildlife to recover from hurricanes Michael and
Florence, Typhoon Yutu, and the California coastal
wildfires of 2018, and be better prepared for future
events. In 2019, 44 new grants from the National
Coastal Resilience Fund were awarded totaling $29.3
million and generated $60 million in matching funds
from the grantees, providing a total conservation
impact of $89.3 million. In the Bay Area, this helped
fund the Lower Walnut Creek Restoration ($1.4 million
in grants) and Marin City wetlands ($146k in grants).
U.S. Environmental Protection Agency
Another big national adaptation funding player is
the U.S. Environmental Protection Agency (EPA).
Included in this is the San Francisco Bay Water Quality Improvement Fund, whose budget is determined by
congressional appropriation each year. In 2017 there
was $4.3 million and available funding has been about
$5 million per year. Water quality projects can help
reduce flooding through green infrastructure and can
also include wetland creation. The EPA’s State Wetlands Planning program has grants of $700k per year. The
EPA’s Brownfield and Environmental Justice grants
could help remediate contaminated shoreline land—a
major issue for environmental justice concerns, as well as directly support community-based organizations.
For 2020, the EPA funded 155 Brownfield grants
nationwide at a total of $65.6 million. Environmental
Justice grants for 2020 totaled at $3.7 million.
Bay Area Federal Funding Data
One major source of general (i.e., not adaptation-
specific) funding for jurisdictions comes from federal
grants, such as HUD’s CDBGs mentioned earlier. The
Federal Government plays a large role in distributing
funds, which can be seen in Table 4 and Figure 12.
This section explores data from the State Controller’s
Office, which was analyzed for federal revenues from
Community Development Block Grants, Workforce
Investment Act, and other federal grants. Note that one reason that federal funding examined in this section
skews towards San Francisco is that San Francisco
is also a County and is the largest regional producer
of affordable housing and provider of services for
unhoused residents in the region.
However, Federal Government spending vary from
year to year and decade to decade depending on the
political party in office and national trends (see Figure 11). Federal spending is at an all-time low compared
to the previous 90 years. These federal spending
trends play a huge role in the availability of funds for adaptation projects.
As seen in Figure 12, federal funds are not equally
distributed to cities around the Bay. For the reasons
described above, San Francisco received about $500
per capita from the Federal Government annually
between 2017 to 2019, or about 60% of the federal
revenue for the entire Bay, while many other cities
received little to no funds due to several factors such as a lack of resources to apply for grants or lack of
interest in pursuing funds due to their designated
purposes.
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BRIDGING THE GAP 31
Figure 11. National Federal Government spending as percentage of national GDP (Data Source: U.S. Bureau of Economic Analysis (BEA)).
Table 5. Mean annual federal revenue received in the Bay Area per city between 2017-2019 (Data Source: State Controller’s Office).
Revenue Revenue per capita
Regional Total $ 720.7 million $ 96 / capita
Regional Mean by City $ 7.1 million $ 39 / capita
Regional Median by City $ 0.48 million $ 16 / capita
Regional Maximum by City* $ 435.7 million $ 498 / capita
*The regional maximum was in San Francisco
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32 BRIDGING THE GAP
State Funding
Adaptation-Specific Funding
State Propositions
There are several bills that have been passed in
California that address funding for adaptation. These
include the following:
• Proposition (Prop.) 1 authorized $7.5 billion
in general obligation bonds for water projects
including surface and groundwater storage,
ecosystem and watershed protection and
restoration, and drinking water protection. This
includes $1.5 billion for competitive grants for
multi-benefit ecosystem and watershed protection
and restoration projects, as well as $395 million
for statewide flood management projects and
activities.
• SB-1 is a 2017 transportation bill that provides
up to $20 million to local and regional agencies
for climate change adaptation planning. SB-1
increased existing fuel taxes and created two new
vehicle fees. The total bill includes $54 billion over
the next decade.
• Prop. 84 authorized $5.4 billion in 2006 for general obligation bonds for water and flood control
projects.
• Prop. 68 passed in 2018 and is for state and local
parks, environmental protection and restoration
projects, water infrastructure projects, and flood
protection projects, opening up $4 billion in general
obligation bonds.
• AB-398 extended California’s Cap and Trade
program to 2030 for market-based compliance
of climate change mitigation. AB-32 was the
Figure 12. This map shows how mean annual per capita federal revenue was distributed to cities around the Bay between 2017-2019, with yellow being the highest and blue being the lowest. These Federal revenues include Community Development Block Grants (CDBGs), Workforce Investment Act (WIA), and ‘other’ Federal grants.
FUNDING SUPPL Y
BRIDGING THE GAP 33
establishing state law that started the program.
It creates revenues of about $2 billion a year and
includes prioritizing funding for climate adaptation
and resiliency.
• AB-733 expands the types of projects that
can be funded with enhanced infrastructure
financing districts to include projects that enable
communities to adapt to the impacts of climate
change.
• AB-78, passed in 2020, creates the Climate
Catalyst Revolving Loan Fund that furthers
California’s climate goals, activities that reduce
climate risk, and the implementation of low-carbon
technology and infrastructure.
• SB-667 authorized the California Department of
Water Resources (DWR) to create the Riverine
Stewardship Program for watershed-based riverine
and riparian stewardship improvements.
• AB-2800 requires state agencies to take climate
change into consideration when building state
infrastructure.
• AB-109 provided $20 million to the Wildlife
Conservation Board for local assistance, payable
from the Greenhouse Gas Reduction Fund from Cap
and Trade.
In Fall of 2021 the California passed a Climate
Resilience Package. "Focusing on vulnerable front-
line communities. The package includes $3.7 billion
over three years to build resilience against the state’s multi-faceted climate risks, including extreme heat and sea level rise." At the time of writing many unknowns
remain about the exact distrubtion and use of these
funds.
There are a number of potential sea level rise
adaptation bills introduced in 2021, many directly
addressing sea level rise funding such as SB-45, the
Wildfire Prevention, Safe Drinking Water, Drought
Preparation, and Flood Protection Bond Act of 2020.
Grants
Statewide, California has several grants dedicated to
adaptation funding. A lot of these grants are geared
towards nature-based adaptation such as wetland
restoration and water quality improvement, and
transportation. Many of these grants were made
possible by the above bills.
California Department of Transportation (Caltrans)
The California Department of Transportation (Caltrans)
is one of the largest players for state adaptation grants, although funded projects must include transportation
elements. Their Sustainable Transportation Planning
Grant Program helped fund 77 projects in 2020 totaling
in $21.5 million to further the Sustainable Communities Strategy. For 2021, The Sustainable Transportation
Planning Grant Program includes $29.5 million of
funding for the Sustainable Communities Grants which
will encourage local and regional planning that furthers state climate goals. Caltrans also provides Adaptation
Planning Grants, which includes $20 million per year
over three years, which ended in 2020. Much of this
was funded by the SB-1 Transportation Improvement
Fee, which creates $5 billion per year in revenue.
California Department of Water Resources (DWR)
Prop. 1 from the California Department of Water
Resources (DWR) provides grants for flood
improvements for water quality. DWR also funds the
Riverine Stewardship Program, which runs the Urban
Streams Restoration Program. In 2019 the program had
$6.6 million for the state, and the Bay Area received
$1.5 million of that.
The California Water Resources Control Board also
uses Prop. 1 funds to administer funds for five
programs. They provide $200 million for multi-benefit
storm water management projects. This can include
green infrastructure, rainwater, and storm water
capture projects and storm water treatment facilities.
California Department of Fish and Wildlife
The California Department of Fish and Wildlife is
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34 BRIDGING THE GAP
another big player for ecosystem restoration and
offered $15 million statewide in 2019 for wetland
restoration. These wetland restoration grants are from
the state’s Cap and Trade program.
California Ocean Protection Council
The California Ocean Protection Council (OPC)
administers the Prop 68, Prop. 84 and Prop. 1
competitive grant programs. Prop. 1 is used for
climate change adaptation, storm water recapture,
wetland and coastal watershed restoration, marine
managed area protection, fisheries infrastructure, and
improvement of ocean water quality. Prop. 84 is used
for addressing ocean acidification, sustainable fisheries and aquaculture, coastal sediment management, and
marine pollution. In 2019 there was $9.3 million made
available.
California State Coastal Conservancy
The California Coastal Conservancy funds a variety
of adaptation and resiliency projects across its
existing programs, as well as through dedicated bond
measures. Conservancy projects funded through
Prop. 1 provide more reliable water supplies, restore
important species and habitat, and develop a more
resilient and sustainably managed water system
(water supply, water quality, flood protection, and
environment) that can better withstand inevitable
and unforeseen pressures in the coming decades.
The Funds are administered through the Bay Area
Integrated Regional Water Management Program.
There was $7.12 billion made available in general
obligation bonds for state water supply infrastructure
projects (with specific budget breakdowns for certain
water projects).
The Coastal Conservancy also runs the Climate Ready
Program to help natural resources and communities
along the coast and San Francisco Bay adapt to the
impacts of climate change. This program has been
funded by the Greenhouse Gas Reduction Fund from
the Cap-and-Trade program as well as other sources.
Through the Climate Ready Program, over $12 million
has been awarded for 62 projects in from 2013 to 2019.
The Climate Ready Program did not have dedicated
funding for new projects in 2020. Past projects have
focused on sea level rise adaptation planning, nature-
based infrastructure, carbon sequestration and urban
greening.
California Wildlife Conservation Board
The California Wildlife Conservation Board (WCB) has
Climate Adaptation Environmental Restoration grants
that include funding for planning, technical assistance, and acquiring conservation easements. This grant
priorities the protection of lands that facilitate wildlife adaptation to projected climate impacts by providing
transitional habitat features such as elevation gradients and ecotones, and habitat linkages that enable wildlife movement to and from adjacent wildlife corridors and
open space areas. It also is intended to fund projects
that provide climate adaptation and resilience on
California’s natural and working lands. WCB released
the first grant under this program in 2018, leading to
nearly $12 million in grant funding to selected projects.
The remaining $8 million will go to other qualifying
projects in 2021. Future grant opportunities under this program may be funded through a similar legislative
action, or another funding source.
Bay Area State Funding Data
A major source of non-resilience funding for cities
comes from state grants and taxes, such as the
Homeowners Property Tax Relief, Gasoline Tax, Off-
Highway Motor Vehicle In-Lieu Fee, and Prop. 172,
among other state grants. Like federal grants, state
revenue is not distributed equally throughout the
region, which can be seen in Table 2 and Figure 13.
Even when accounting for population size, the East Bay
and San Francisco receive the most per capita state
revenue. San Francisco received about $1,060 per
capita from the state government annually from 2017
to 2019 as compared to the $85 mean by city for the
region as a whole.
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BRIDGING THE GAP 35
Bay Area Regional Funding Data
Measure AA
San Francisco Bay Restoration Authority’s Measure
AA introduced a $12 annual parcel tax for 20 years
to fund Bay Area habitat restoration projects. This
totals $500 million, or $25 million a year for 20 years before automatically expiring in 2037. While Measure
AA is successful in helping to protect and restore the
Bay, when looking at the scale of adaptation projects
needed to protect the region from SLR, the $500M from
Measure AA represents just 3% of this $19 billion in
adaptation costs for 2 feet of SLR. Measure AA showed
the region that citizens care about restoring and
conserving the Bay’s environment, but we need more
aggressive funding measures to make an impact.
A complicating matter is that wetland restoration
projects need to stand the test of time, as many
wetlands will be drowned within the first foot of SLR
if they are not maintained with regular sediment
deposits to keep up with the rising tides. Measure AA
funds currently do not fund long-term wetland project
monitoring, just construction, meaning we will not be
able to properly learn from many of these pilot projects without additional funding. When dealing with limited
funding, it is incredibly important to use these funds
strategically. We need more flexible measures that
allow funds to be distributed where and how they are
needed. A regional funding strategy could hold the
birds eye view to understand the scale of adaptation
costs and how funds could best be used.
City Funding
Using Existing Resources to Build Resilience
into Capital Plans
In addition to federal and state grants, a significant
source of SLR adaptation funding will inevitably be
existing municipal revenue streams. It is inevitable that costs will need to be shared across all scales, including cities themselves. Generally, the limited amount of
municipal revenue available is highly competitive with
other important uses, such as schools, social services, or public transit. Municipalities need to use existing
funds to build resilience into city capital plans, and
may also need to add additional revenue streams
through new fees or taxes, which has its own barriers
and challenges. An additional challenge for municipal
funding is that there are many financial and institutional barriers to mixing general funds and enterprise funds
to conceptualize, plan, and execute integrated planning efforts with multiple resilience benefits.
Existing revenues can be slightly reallocated to
incorporate adaptation into existing projects and
services. Cities can task their transportation, planning, and public works divisions to incorporate adaptation
into all projects using existing funds for these sectors.
This could include projects such as ensuring new roads
are built out of the SLR inundation zone or storm-
proofing newly built sewer discharge pipes to allow
water to drain even with rising waters. However, will
existing revenues be adequate and flexible enough to
pay for the adaptation needed? The answer is almost
certainly not.
Table 6. Mean annual state revenue received in the Bay Area per city between 2017-2019 (Data Source: State Controller’s Office).
Revenue Revenue per capita
Regional Total $ 1,361 million $ 181 / capita
Regional Mean by City $ 13.5 million $ 85 / capita
Regional Median by City $ 2.1 million $ 60 / capita
Regional Maximum by City* $ 923.8 million $ 1,056 / capita
*The regional maximum was in San Francisco
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36 BRIDGING THE GAP
To estimate baseline city expenditure, we used the
SCO’s data on capital outlay, defined as expenditures
used to acquire or construct capital facilities financed by a governmental fund, typically a capital projects
fund, and debt service, defined as principal or interest payments on debts from General Obligation Bonds,
Revenue Bonds, Certificates of Participation, Pension
Obligation Bonds, construction financing, and other
agency debt.
There is a large variance in public expenditure among
Bay Area Cities. The three largest cities by population and expenditure—San Francisco, San Jose, and
Oakland—make up 56% of total spending between the
years 2017 and 2019. When adjusting for population,
the per capita expenditure shows a less drastic
split, with smaller jurisdictions such as Colma, Half
Moon Bay and Mill Valley having the highest average
annual expenditures in these three years (see Table
6 and Figure 14). Overall, the per capita expenditure
throughout the Bay Area varies greatly as can be
seen in Figure 14. This presents unique challenges
and opportunities for sea level rise adaptation as
cities rely on their neighbors for adequate protection
of communities and important assets. ART Bay Area
identified hotspots that show many vulnerable spots
outside of these high expenditure areas that will need
significant outside investment to protect vulnerable
communities, habitats, jobs, and transportation
networks that the Bay Area as a region relies on.
Figure 13. This map shows how mean annual per capita state revenues were distributed to cities around the Bay between 2017-2019, with yellow being the highest and blue being the lowest. These State revenues include Homeowners Property Tax Relief, Gasoline Tax (Functional Revenues), Peace Officers Standards and Training (Functional Revenues), Off-Highway Motor Vehicle In-Lieu Fee (General Revenues), Other Intergovernmental – State 1, 2 (General Revenues), Mandated Cost (General Revenues), Public Safety – Prop. 172 (Functional Revenues), Public Safety – 2011 (Functional Revenues), Other State Grants – Other (Specify) (Functional Revenues).
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BRIDGING THE GAP 37
Creating New Funding Streams
Inherently, some cities can raise more money than
others based on property tax revenues from homes
and businesses. The Bay Area contains some of the
most expensive real estate in the country, while other
areas suffer from disinvestment. Finally, just because
a city has revenue does not mean that they have the
local capacity to plan, manage, build, and maintain
adaptation projects, particularly for adaptation projects that need to occur in phases over time.
There are many resources available to local
governments that are interested in generating new
local funding for capital projects. The California Debt and Investment Advisory Commission, a division of the
California Treasurer’s Office, publishes the California Debt Financing Guide1. Another resource is the 2017
Guide to Local Government Finance in California2.
Affluent communities around the Bay can leverage
high property values to finance coastal resilience
– specifically those improvements that will protect
property values. Many communities already use this
source of funding to build and upgrade public school
facilities, assisted by the carve out in the California Constitution that allows local communities to pass
General Obligation (G.O.) Bonds with a 55% vote.
G.O. bonds approved by 2/3 of voters levy a surcharge
on community-wide property taxes above the 1%
1 https:/ /www.treasurer.ca.gov/cdiac/debtpubs/financing-guide.pdf 2 Coleman et al., Guide to Local Government Finance in California. 3 “Overview and Background | CASQA - California Stormwater Quality Association.” property tax limitation imposed by Proposition 13.
Community facility district bonds levy a surcharge –
typically a per square foot charge – that is independent of property value. Infrastructure Financing Districts
can be used to capture the local share of property tax
growth from new development or reassessments over
time.
Creating new city revenue streams to pay for
adaptation is complicated due to two California
Propositions that inhibit new tax revenues. Prop. 218,
passed in 1996, prohibits property-related fees for
general government services. This limits the funding
stormwater utilities or flood districts can raise from
users and is a huge hurdle for raising local funds
for flooding-related projects. However, SB-231 was
passed in 2017, which adds a definition to Prop. 218
that clarifies a “sewer” can include storm drainage.
This now exempts stormwater from the voter approval
requirement. This would enable municipalities to
establish and increase stormwater fees by an action
of the governing board (city council or board of
supervisors) rather than by putting it to vote by the
public. At face value, this appears to undo the damage of Prop. 218; however, the authors and proponents
of Prop. 218 (Howard Jarvis Taxpayers Association)
consider the new law to be unconstitutional and has
promised to sue any agencies that move forward
without voter approval.3
Table 7. Mean annual city expenditures in the Bay Area per city between 2017-2019 (Data Source: State Controller’s Office).
Expenditure Expenditure per capita
Regional Total $ 2.5 billion $ 338 / capita
Regional Mean by City $ 25.1 million $ 340 / capita
Regional Median by City $ 7.5 million $ 235 / capita
Regional Maximum by City $ 814 million* $ 3,783 / capita**
*The regional total maximum expenditure was in San Francisco **The regional maximum per capita expenditure was in Colma
FUNDING SUPPL Y
38 BRIDGING THE GAP
The second limitation is Prop. 13, which limits
property tax to no more than 1% of a property’s
assessed value in 1976 and limits annual increases
to inflation or 2%, whichever is lower. It also requires a two-thirds majority vote of the state legislature to
increase non-property taxes and a two-thirds majority
vote for local governments for any special taxes.
This greatly limits the revenue cities can raise from
property taxes even though the Bay Area has some of
the highest property values in the nation (see Figure
15). Using the Zillow Typical Home Value, cities in
San Mateo and Marin have a much higher home value
than many other cities in the Bay Area, which one
would think would put them in a better position for
adaptation on a per capita basis. In June of 2020 the
Zillow average house value by city and total household
estimate from the American Community Survey (ACS)
has the region at a total of $2.9 trillion in property
value. However, given the limitations expressed above,
it is more difficult to raise additional revenue from this nearly 3 trillion-dollar value.
Additionally, Prop. 26, passed in 2010, requires a two- thirds supermajority for new taxes, levies, charges,
and fees. This makes any new funding measures
very challenging to approve without proper public
engagement and education.
Risk funding is an alternative for local and regional
governments, and their communities, to pay for
insurance and risk-reduction collectively through
risk management structures that do not require new
taxes or fees. Such programs offer the potential
to supplement existing insurance alternatives and
generate funds for collective risk reduction.
Figure 14. Map of the mean annual per capita city expenditure in 2020 USD for the years 2017-2019. Values above $1000 per capita truncated.
FUNDING SUPPL Y
BRIDGING THE GAP 39
Case Study: San Francisco Office of Capital
Planning and Resilience General Obligation
Bond Program
Even with a 2/3 supermajority requirement,
it is possible to gain the confidence of voters
and develop new funding sources.
San Francisco has developed a structured
process for planning, funding and
implementing capital improvements with
voter-approved G.O. Bonds, General Fund
debt called Certificates of Participation
(COPs), and revenue bonds. The process
is managed through a transparent public
process with recommendations generated
by a Capital Planning Committee comprised
of City department heads that reports
to the Board of Supervisors and the
Mayor. The G.O. Bond Program is
also overseen by a Citizen’s General
Obligation Bond Oversight Committee.
G.O. Bonds are backed by San
Francisco’s property tax revenue and
are repaid directly out of property
taxes through a fund held by the
Treasurer’s Office. The Plan structures
the G.O. Bond schedule around the
notion of rotating bond programs
across areas of capital need. San Francisco strives to
maintain the same overall property tax rate by issuing
new debt as old debt is retired and San Francisco’s
property tax base increases. Chart 1.1 from San
Francisco’s 2022-2031 10 Year Capital Plan1 shows
how San Francisco plans its debt issuances to remain
below a stable tax rate (less than 1.2% of property
value, with all City-imposed property tax overrides).
This combination of clear planning for capital
investment and orderly issuance of debt in a manner
that does not produce significant tax increases has
resulted in a track record of consistently passing
G.O. Bonds by more than the 2/3 voter approval
requirement. Since adopting its Program, San Francisco
1 https:/ /onesanfrancisco.org/Proposed-Plan-2022
voters have approved $5.5 billion in G.O. Bond
funding for a variety of capital improvements, with
voters approving 12 proposed G.O. Bond proposals
consecutively.
In 2018, San Francisco voters approved a $425 million
general obligation resilience bond in the form the
Embarcadero Seawall Earthquake Safety Bond, which
also funds sea level rise adaptation. Table 5.1 from San Francisco’s 2022-2031 10 Year Capital Plan shows San
Francisco’s planned G.O. Bonds through 2031, including
a new Waterfront Safety Bond estimated at $130
million planned in 2026.
In June of 2020 the Zillow average house value by
FUNDING SUPPL Y
40 BRIDGING THE GAP
city and total household estimate from the American
Community Survey (ACS) has the region at a total
of $2.86 trillion in property value. Based on this San
Francisco case study, many Bay Area communities
with substantial property values – with the notable
exception of disadvantaged communities – have
available funding tools to pay for some of the
needed resilience improvements of community-wide
significance in their jurisdictions.
1 It is important to note that there are 118 Census-designated Places in the Bay Area Regional Funding Totals using SCO Data
According to the SCO data, the annual averages
between 2017 to 2019 for total expenditures on capital
outlay and debt service for the 101 cities in the Bay
Area (excluding any non-incorporated areas1) is about
$2.5 billion. If we assume, hypothetically, that 1%-5%
of regional spending could be reallocated or newly
generated for adaptation funding, that leaves the region with about $25 million to $125 million each year for
SLR adaptation. This is a rough magnitude of scale
estimating what the region could expect for funding
outside of any state or federal grants.
In addition to cities, there are 542 Special Districts in the region that spent an average total of about $870
Figure 15. This map shows Zillow’s Typical Home Value (ZTHV) for June of 2020 by city.
FUNDING SUPPL Y
BRIDGING THE GAP 41
million per year on capital outlay and debt service in the 2017 and 2019 fiscal years. Following the hypothetical
1%-5% reallocated spending from the example above
adds an additional $8.7 million to $43.5 million annually for SLR adaptation.
On a county-level (excluding San Francisco, as it’s
expenditures are already covered in city expenditures,
as it is both a city and a county) the SCO data indicates an expenditure on capital outlay and debt service of
about $920.8 million per year. 1-5% of that spending
would amount to $9.2 million – to $46 million for
potential adaptation spending.
Total average annual revenue coming into the Bay
Area’s cities from the state and Federal Government
between 2017 and 2019 is about $1.36 billion from
the State of California and about $720 million from
the Federal Government. Following the same order
of magnitude hypothetical of assuming 1%-5% for
reallocated spending adds an additional $13.6 million
to $68 million from the State of California and $7.2
million to $36 million from the Federal Government
annually for SLR adaptation.
By combining all of these sources, as shown in Table
8, a hypothetical $63.7 million to $318.5 million per
1 MTC/ABAG, “Plan Bay Area 2050", https://www.planbayarea.org/sites/default/files/documents/Plan_Bay_Area_2050_ October_2021.pdf
2 NHA Advisors, “Finance Guide for Resilient by Design Bay Area Challenge Design Teams.” year for SLR adaptation in the region could be made
available if cities, Special Districts, California, and the Federal Government were able to allocate one to five
percent of their spending to tackling sea level rise.
For comparison, MTC estimates an existing sea level
rise adaptation revenue of $3 billion for protection
against shoreline flooding over the next 30 years
(2020-2050) from sources such as FEMA, USACE, state
bonds, local taxes and project funding.1 This equates to $100 million per year and is within the estimate range
we calculated above.
BART System Case Study: How the Region Funded
Critical Infrastructure and Upgrades
“The initial three-county, voter-approved Bay Area Rapid Transit System (BART) in 1962 was projected to cost
$996 million, or $7.1 billion inflated to 2016. Funding came from a combination of property taxes, bridge
tolls, and fare revenues. This funding was used to
support general obligation and revenue bond financing
for initial construction of the system. Since 1996, the Bay Area Toll Authority has been implementing a $9.4
billion retrofit of the area’s major bridges funded largely by bridge tolls.”2
Initial construction projection: $8.3 billion in 2020 US dollars
Table 8. Possible Back-of-the-Envelope, Magnitude of Scale Annual Revenue/Expenditure Forecast for SLR Spending in the Bay Area.
Bay Area Revenue Stream* Low (1%) High (5%)
City Expenditures $25 million $125 million
Special District Expenditures $8.7 million $43.5 million County Expenditures $9.2 million $46 million
State Revenue $13.6 million $68 million
Federal Revenue $7.2 million $36 million
Total $63.7 million $318.5 million
* based on a percentage of existing revenue/expenditures from each source
FUNDING SUPPL Y
42 BRIDGING THE GAP
Funding & Financing Unknowns
Timing and Availability of Federal Funding
Programs
Federal emergency funds are typically released in
response to one-time disaster declarations, so the
federal fiscal response to an ongoing, slow-moving
disaster is unknown. Damages will hit the entire U.S.
coast and the world simultaneously, so the question
remains how the distribution of funds to states and
regions will be affected on a national level. If everyone is experiencing a slow-moving crisis at once, it leads to a huge unknown of how national budgets will be able to
accommodate all of the need.
Low-Capacity Cities
Lower-income communities with lower tax revenues
do not have the resources for adaptation compared to
places such as Silicon Valley with high tax revenues
from properties and major corporations. Additionally,
any financing mechanisms would be regressive, hitting
lower income residents the hardest. Without a regional
funding strategy advocating for directing funds to
high-need, low-capacity jurisdictions, lower-income
neighborhoods will be left behind without the resources needed to adequately protect neighborhoods. This
would expose already vulnerable communities to
even more environmental injustices beyond what they
already face, as many low-income neighborhoods are
located adjacent to hazardous waste sites.
Changes to Existing State Propositions
Prop. 26 requires a supermajority requirement for
new taxes and fees. This makes any new funding
measures very hard to approve without proper public
engagement.
Prop. 218 was a constitutional amendment that
protects taxpayers by limiting the methods by which
local governments can create or increase taxes, fees,
and charges without taxpayer consent. This heavily
limited the funding for flood and stormwater utilities.
While SB-231 sought to clarify the law, ongoing
challenges mean that its future is uncertain.
Prop. 13 limits property tax to no more than 1% of
the house’s value in 1975 and limits annual increases
to inflation or 2%, whichever is lower. It also requires a two-thirds majority vote of the state legislature
to increase non-property taxes and a two-thirds
majority vote for local governments for any special
taxes. However, there have been significant efforts
to reform this proposition as it is widely seen as
stymieing revenue statewide. Proposition 15 in 2020
proposed changes to the bill that would have removed
commercial properties from Prop 13’s limits, but it did not pass. However, it is likely that future efforts will continue to seek reform, which could mean a changed
landscape for municipal funding.
Population and Economic Growth
Population in the Bay Area and the economy are
expected to continue to grow, which will have impacts
on public revenue streams over time and change where
and which adaptation strategies are required. More
research is needed to include these two factors in
revenue predictions.
Flood Insurance Rate Changes
The cost of FEMA and private flood insurance depend
on the risk of flooding, which will increase as SLR
continues and decrease as adaptation projects are put
in place. Risk reduction through adaptation effectively reduces the overall public cost of adaptation projects.
Budget Changes due to Natural Disasters
The state and federal budgets and their availability for SLR resilience have been fluctuation a lot in the recent years due to the ongoing COVID-19 pandemic as well
as wildfires.
FUNDING GAP
BRIDGING THE GAP 43
Funding Gap: Bridging the Gap Between Funding Need and Supply We can use the range of estimated costs of sea
level rise adaptation and the one to five percent of
projected regional revenue from the two previous
sections to calculate the potential funding gap,
assuming a constant, unchanged funding stream.
Here, we are using a 30- to 80-year funding period,
which corresponds to the high-risk aversion in OPC’s
California State guidance on the estimated occurrence
of 3.3 to 6.6 feet of sea level rise on top of the average high tide (or mean higher high water, MHHW). That
equates to 3.3 feet of SLR by 2050 and 6.6 feet of SLR
by 2100.
The total funding need ranges from $19 billion to
Table 9. Estimated Annual Revenue Needs for SLR Adaptation Spending in the Bay Area.
Category Definition
2 Feet of SLR by 2050
(30-year Funding Period)
6.6 Feet of SLR by 2100
(80-year Funding Period)
Potential Total
Annual Need for the
Region
Estimates of Total
Annual Adaptation
Costs for the Region
$633 million $1,825 million
Potential Total
Existing Annual
Funding for the
Region
1%-5%* of Total City
and Special District
Expenditures & State
and Federal Revenue
$63.7 million - $318.5 million $63.7 million - $318.5 million Potential Total
Annual Funding Gap
for the Region
Additional Annual
Funding Needed for
the Region
$315 million – $570 million $1,507 million –$1,761 million *Theoretical range of current expenditure and revenues that could be made available for adaptation projects based on cities’ capital outlay and debt service expenditures between 2017 and 2019. % Bay Area GDP
Annual Funding Gap 0.05% – 0.1% 0.25% – 0.3%
Per Capita Annual
Funding Gap $41 - $74 $196 - $229
Per Household
Annual Funding Gap $117 - $211 $558 - $652
Per Parcel Annual
Funding Gap $166 – $300 $793 – $927
Potential
The Total Annual Funding Gap can be
expressed as:
FUNDING GAP
44 BRIDGING THE GAP
adapt to 2 ft of SLR (MTC/ABAG), $40 billion to adapt
to 3.3 ft SLR, and $146 billion to adapt to 6.6 ft of SLR (UC Berkeley). Table 8 breaks these totals into annual
spending using the 30-year and 80-year funding period
for adapting to 2 feet and 6.6 feet of SLR, respectively.
The potential total revenue for the region over 30 years is $1.9 billion to $9.5 billion, using an annual revenue of $63.7 million to $318.5 million. This uses the same
one to five percent estimate outlined in the previous
section. Using this same process, potential revenue
over 80 years is $5 billion to $25.5 billion.
This leaves a funding gap for the region is $9.5 - 17.1 billion for 2 feet of SLR over 30 years and $120.5 -
$141 billion for 6.6 feet of SLR over 80 years.
For illustration purposes, this funding gap can be
broken down into metrics such as per capita, per
household, per parcel or as a percentage of GDP .
1 statista, https:/ /www.statista.com/statistics/183843/gdp-of-the-san-francisco-bay-area/ The 9-County Bay Area has:
• 7.7 million people live in the Bay Area
• 2.7 million households
• 1.9 million parcels
• $597 billion (2020 USD) GDP1
While this gap can seem daunting, comparing
adaptation funding needs to the total property value
in the Bay Area, $2.863 trillion, the funding gap above seems a lot more manageable --- 0.3 - 4.9% of total
current property values. However, given the limitations on raising property taxes or any new taxes above,
as well as competing demands and extremely high
housing prices, it is difficult to raise these revenues.
Figure 16. Estimated funding gap for SLR adaptation based on 1-5% of average public funding in the 9-County Bay Area in 2017-2019, including a side-by-side comparison of a 30-year funding timeline for 2-3.3ft of SLR and a 80 year funding timeline for 6.6. ft to match 2050 & 2100 SLR targets.
FUNDING GAP
BRIDGING THE GAP 45
Funding Facts & Actions
1 BCDC: https:/ /bcdc.ca.gov/bay_estuary.html
2 USGS: https:/ /ca.water.usgs.gov/projects/baydelta/studyarea.html While it is not possible to accurately estimate total Bay Area sea level rise adaptation needs at this juncture,
policymakers at the State and Federal level are
beginning to act to address the funding need. Fully-
loaded regional adaptation needs to adapt to 2100
water levels will almost certainly exceed $100 billion; the window to act to protect our wetlands in the Bay is already closing.
As legislators begin to formulate funding solutions
to match the new local funding sources that will also
be required, the following proposed funding facts and
actions should be put forward:
Equity
• Disadvantaged communities are not treated fairly
by many current funding formulas
• Eliminate matching requirements for adaptation
funding for disadvantaged communities
• Eliminate strict economic benefit-cost analysis as
the primary driver for awarding adaptation funding
because this approach favors areas with high pre-
existing investment
• Create priority funding (formulas, pots, points) for defined disadvantaged communities such as MTC
Communities of Concern
• Along with funding, provide proactive technical
assistance to disadvantaged communities
without the resources to apply for and execute
risk assessment, adaptation planning and
implementation.
• San Francisco Bay represents approximately 50%
of the State of California’s coastline1 and almost
40% of the State’s water supply drains to the Bay2;
statewide adaptation funding should be allocated
accordingly.
• Given the lack of storm-driven flood damage on
the West Coast, most local communities are only
starting to assess adaptation needs. With the rate
of expected sea level rise, many local communities
could wait too long to commence aggressive
assessment and planning activities.
• Develop new adaptation funding streams with
low matching requirements to encourage
local communities and special districts to
conduct rigorous, probabilistic multi-hazard risk
assessments and conduct adaptation planning
studies with a focus on delivering multi-benefit
resilience projects to the public.
Nature-Based Adaptation and Science
• Prioritize funding for nature-based solutions,
including preservation of wetlands.
• Fund additional study of how habitat can be
improved in the near shore environment adjacent to
human-made shorelines with deep water, including
ports and airports
• Fund additional study of and pilot projects
examining environmentally-sound practices for
stormwater management as a companion to raising
shorelines.
• Fund additional study of and pilot projects
examining best practices for adapting urban/
suburban wastewater facilities that discharge to
the Bay.
• Fund assessment of policy barriers preventing
effective funding and financing of nature-based
solutions.
FUNDING GAP
46 BRIDGING THE GAP
Adaptation Funding for Cities, Counties,
Special Districts, Ports
Sea level rise adaptation is a newly identified need, so existing State and Federal funding sources to address
this issue are not well-developed.
• Develop robust funding sources to encourage cities,
counties, special districts and ports to design and
implement coastal flood adaptation.
• Consider the role of private ownership of the coast, and mechanisms to encourage private investment
in coastal flood protection with broader community
benefits and/or mechanisms to encourage private
property owners to allow the construction of
coastal flood protection on their property.
• Consider the role of voluntary buy-out programs,
land use changes, and managed retreat in urban
areas. The technical analysis, strategic thinking,
political coalition-building, community engagement,
and planning required to advance this important
work can be difficult to launch because it does not
meet traditional grant criteria, to wit, it typically
does not yield “shovel ready” projects, among other
criteria.
• Further incentivize collaboration across agencies.
Currently, for city agencies each tasked with a
different core business and held accountable to
ensure that no dollar is spent on non-core business,
the disincentives for collaboration often outweigh
the incentives. This situation grew out of a desire
for good governance and financial stewardship, but
has created a significant unintended consequence:
a disincentive for integrated thinking, planning,
project development, and project delivery. For
integrated, advanced capital planning to occur,
incentive structures need to change.
DISCUSSION
BRIDGING THE GAP 47
Discussion
1 Hirschfeld and Hill, “Choosing a Future Shoreline for the San Francisco Bay.” Sea level rise will threaten coastal areas across the
globe within this century and the Bay Area is no
exception. Quantified economic damage estimates
are still mostly limited to property damages and, in the U.S., linked to FEMA’s flood insurance program and
will certainly be significantly higher when accounting
for social and ecological damages. Nevertheless, even
when just looking at property damage, sea level rise
is comparable to other national disasters, such as
Superstorm Sandy and Hurricane Katrina (Figure 7). It
is important to point out that unlike earthquakes and
storms, sea level rise is permanent in nature and will
exacerbate other flood events due to elevated tides and ground water levels. Yet, it is also incremental, which is an opportunity to prepare for and mitigate the worst impacts.
MTC/ABAG’s Plan Bay Area 2050 estimates the
cost of adapting to 2 feet of SLR, while protecting
about 98% of households, to be around $19 billion.
One academic study estimates the average costs of
protecting the Bay Area to be $40 billion for 3.3 feet of SLR and $146 billion for 6.6 feet of SLR, highlighting
the escalating increase in cost of raising shoreline
protection structures to protect from higher sea level
rise scenarios.1
The Bay Area’s cities and special districts currently
spend around $6.4 billion annually on capital outlay,
debt service and of received state and federal grants.
Using a hypothetical 1-5% of this total and allocating it for sea level rise adaptation would supply the Bay Area with about $1.9 billion to $9.6 billion for SLR adaptation over the next 30 years until 2050. This information
allows us to start estimating the regional funding gap, which will exceed $10 billion, depending on the SLR
scenario and employed adaptation strategies.
Wealth and spending power vary greatly among Bay
Area communities. If sea level rise is left to local
governments to deal with by themselves, there will
be significant gaps in the funding and ultimately
construction of shoreline defenses, disproportionately
affecting disadvantaged communities, threatening
transportation networks, wetland habitats and other
public services, such as wastewater treatment plants.
Several initiatives like Bay Adapt, Plan Bay Area and
BayCAN are working at different scales for potential
solutions to sea level rise in the Bay Area, including
funding. More work is needed to accurately estimate
the cost and prioritize locations of adaptation projects that benefit the entire region.
A regional SLR adaptation funding strategy, as outlined in Bay Adapt, could greatly increase the region’s ability to secure and distribute adaptation funds based
on priorities laid out in a multi-stakeholder regional
adaptation strategy. This paper seeks to lay the
groundwork for such a plan and start to make the case
for the region’s funding needs.
APPENDIX
48 BRIDGING THE GAP
Appendix
1 “Le vee Protection Planning and Improvements Project (CIP 301-657) | Foster City, California.” 2 “Hayward Shoreline Masterplan. ”
3 “Dumbar ton Bridge West Approach + Adjacent Communities Resilience Study Technical Report.” 4 Shilling et al., “State Route 37 Integr ated Traffic, Infrastructure and Sea Level Rise Analysis.” 5 Kimley-Horn and Associates and AECOM, “SR 37 Transportation and Sea Level Rise Corridor Improvement Plan.” 6 Santa Clar a Valley Water District, “South San Francisco Bay Shoreline Phase I Study - Resolution Certifying the Final Environmental Impact Report and Adopting Findings of Fact, Statement of Overriding Considerations, and Mitigation Monitoring and Reporting Program; and Approving the Project.”
7 Or o Loma Sanitary District, “Oro Loma and Castro Valley Sanitary Districts to Test Experimental Levee”; Save The Bay, “Oro Loma Horizontal Levee Vegetation Report.”
8 San F rancisquito Creek Joint Powers Authority, “Public Draft Feasibility Report SAFER Bay Project Strategy to Advance Flood Protection, Ecosystems and Recreation along San Francisco Bay East Palo Alto and Menlo Park.” Adaptation Project Profiles:
Foster City Levee Protection Planning and
Improvements Project (CIP 301-657)
Shoreline Protection Type: Levee
Length: 34,717 feet
Flood Protection Level: 40”-42” of flooding from 100-
year storm, FEMA accreditation
Cost: $90 million general obligation (GO) bond
(Measure P voted in 2018).
1 Hayward Regional Shoreline Master Plan
Shoreline Protection Type: Horizontal Levee
Length: not available in CHARG dataset
Flood Protection Level: 24”-48” of SLR + 40”-42” of
flooding from 100-year storm
Cost: $440.9 million - $596.1 million (3 alternatives
without contingency).
2 Dumbarton Bridge West Approach + Adjacent
Communities Resilience Study
Shoreline Protection Type: Levee
Length: 28,923 feet
Flood Protection Level: 36” of SLR + 40-42” of flooding from 100-y storm
Cost: $45.5 million - $1.8 billion (3-4 alternatives).
3 SR-37 UC Davis (2100) Integrated Traffic,
Infrastructure and Sea Level Rise Analysis
Shoreline Protection Type: Levee or Causeway
Length: 72,630 feet
Flood Protection Level: 36”-83” of SLR + 40”-42” of
flooding from 100-year storm
Cost: $1.26 billion - $4.3 billion (3 alternatives).
4 SR-37 Kimley-Horn (2050) Transportation and Sea
Level Rise Corridor Improvement Plan
Shoreline Protection Type: Levee
Length: 72,630 feet
Flood Protection Level: Protect Highway from flooding
until 2050, before highway is raised or reconstructed
at higher elevation
Cost: $216.5 million to $439 million.
5 South San Francisco Bay Shoreline Study (SSFBSS)
Shoreline Report
Shoreline Protection Type: Levee
Length: 97,567/ feet
Flood Protection Level: 31” of SLR + 40”-42” of
flooding from 100-year storm (15.2 feet levee height)
Cost: $174 million (alternative 3).
6 Oro Loma Experimental Horizontal Levee
Shoreline Protection Type: Horizontal Levee
Length: not available in CHARG dataset
Flood Protection Level: No flood protection goal set
Cost: $9.1 million.
7 Strategy to Advance Flood Protection, Ecosystems
and Recreation along the San Francisco Bay (SAFER
Bay) in East Palo Alto and Menlo Park
Shoreline Protection Type: Levee
Length: 16,884 feet
Flood Protection Level: 36” of SLR + 40”-42” of
flooding from 100-year storm
Cost: $89.7 million - $104.9 million.
8 APPENDIX
BRIDGING THE GAP 49
The Port of San Francisco Embarcadero Seawall Program
Shoreline Protection Type: Seawall
Length: 16,505 feet
Flood Protection Level: Resilient waterfront over next 50 years Cost: $5 billion.1
SFO Airport Shoreline Protection Project
Shoreline Protection Type: Steel Sheet/King Pile Wall
Length: 28,562 feet
Flood Protection Level: 36” of SLR + 40”-42” of flooding from 100-year storm Cost: $587 million.2
Oakland Airport Capital Improvement Program
Shoreline Protection Type: Earthen Dike
Length: 25,223 feet
Flood Protection Level: Raise dike by 2 feet
Cost: $46 million.
1 San Francisco Port, “Embarcadero Seawall Program Overview.” 2 “San Francisco Airport - Airport Shoreline Protection Project - Fiscal Feasibility Study.”
CREDITS
50 BRIDGING THE GAP
Credits
• Nicolas Sander, Bay Area Conservation & Development Commission • Samantha Cohen, Bay Area Conservation & Development Commission (former) • Dana Brechwald, Bay Area Conservation & Development Commission • Jessica Fain, Bay Area Conservation & Development Commission • Larry Goldzband, Bay Area Conservation & Development Commission • Brenda Goeden, Bay Area Conservation & Development Commission • Jaclyn Perrin-Martinez, Bay Area Conservation & Development Commission • Daniel Hossfeld, Bay Area Conservation & Development Commission • Robert Spencer, Urban Economics
• Mark Northcross, NHA Advisors LLC
• Brad Benson, Port of San Francisco
• Sandra Hamlat, City and County of San Francisco
• Adam Varat, City and County of San Francisco
• Sarah Minick, San Francisco Public Utilities Commission • Brian Benn, Environmental Risk & Financial Solutions • Kathleen Schaefer, P .E., CFM
• Jessica Ludy, U.S. Army Corps of Engineers
• Rachael Hartofelis, Association of Bay Area Governments & Metropolitan Transportation Commission • Michael Germeraad, Association of Bay Area Governments & Metropolitan Transportation Commission