This is the story of how property values are affected by Nature and Government.
Real Estate is full of dichotomies, which I experienced firsthand this week when I showed the most expensive home I have ever shown within a few days of closing escrow on the lowest priced home I have ever sold. Both were on bluff-front locations overlooking the ocean, but the difference in each case was the bluff, and the history behind it.
The first home was a spectacular remodel on Opal Cliff Drive which was originally built in 1961, at a time when there was little to no regulation over coastline management. Its original owner was an engineer who had carefully selected the site based on its orientation being almost perfectly perpendicular to the passing waves. In addition, he had also had the base of the bluff smoothed out, with large boulders placed at its base, each weighing 2.5 tons or more, to protect the homesite.
Over the course of the ensuing 62 years, his meticulous preparation has stood the test of time, as confirmed on www.californiacoastline.org which tracks the changes along the coast every year. Its footage shows the formation protecting the home and the 2 adjacent houses has remained virtually unchanged, in contrast to a recent study by noted coastal geology expert Gary Griggs that determined the coastline along Opal Cliffs to be receding at an average rate of 7 inches per year. And during the course of the remodel, the owners wisely stayed within the footprint of the original home to avoid needing to involve the Coastal Commission.
The other home was on the bluff-front property I listed in Pacifica, which had ended up on the cover of the local papers in 2016 when the high storms took a 35’ chunk of the bluff in a single event within a few months of when my client had bought it for just under a Million dollars. In the heat of the storm, he obtained an emergency repair permit and brought in rip rap which was dropped at the base of the bluff to keep it from eroding further. Unfortunately, an emergency repair permit is only temporary, so it wasn’t long before the Coastal Commission sent him letters requiring that he apply for a Coastal Development Permit to install a permanent seawall.
After a protracted legal battle, he put the property up for sale, but between the projected costs of engineering and construction plus permit and mitigation fees, and penalties accruing at the rate of thousands of dollars per day, it proved difficult to find a buyer at any price. On top of that, the home couldn’t be reoccupied as a residence, due to it having a non-conforming use that sat vacant for over a year after being red tagged.
In the end, after a combined 475 days on the market, it finally sold last week for $25,000 to the owner of the adjacent property who was willing to sign an indemnity agreement and will be using the property as a yard for storage and overflow parking.
Thanks to the Coastal Commission, it no longer pays to mess with Mother Nature, at least not in Pacifica. But as for the home on Opal Cliff whose owners were fortunate enough to have bluff protections that were in place before the Coastal Commission existed, that one can be yours for $15 Million.
