Changing Coasts along Lake Michigan: Shoreline Management Impacts on the Inland Community

Lakefront Michigan homeowners must manage chronic erosion risks that threaten property and structural damage. Record high water levels led to approvals of more than 2,200 shoreline hardening permits in the 14 months ending December 2022. Hardened shorelines likely alter local environmental amenities, which may capitalize into nearby property values. A change in the price would suggest lakefront homeowners induce negative externalities on the inland coastal community, culminating in suboptimal shoreline adaptation. Utilizing adaptation permits for hardened shorelines, assessments of shoreline typology, and residential housing sales from the Zillow Transaction and Assessment Database, I quantify these spillovers on properties within 0.5 miles from the shoreline. Hedonic estimates suggest that an individual's shoreline hardening does not adversely impact the inland community unless nearby shorelines become "extensively" armored. Extensively armored shorelines are associated with a 20%–33% reduction in property values relative to a more natural shoreline.