2021-01-18 GC - Item 3 - Attachment 3 - Cost Benefit Analysis for Coastal Erosion Options

5.1.4.      Options 5 and 6 - Acquisition of all properties followed by rezoning of land to public
            open space that supports natural coastal processes

Options 5 and 6 are closely related, with Council acquiring all properties where lot size does not
support sufficient building size and setback due to coastal erosion by 2070. Acquisition occurs 30
years prior to the earliest coastal erosion impacts at each property. These properties are then
converted to public open spaces. Under option 6 these buildings are available for leaseback for 15
years after acquisition and then converted to open space. These options do not attempt to manage
coastal erosion but rather aim to reduce the costs of coastal erosion to the public (relative to
alternative options).

For the Eastern Beaches these options return negative NPVs of -$222m and -$70m respectively.
These options avoid the private costs of developing properties which would otherwise be damaged
through coastal erosion and provide amenity benefits to the local community through the new public
open space areas. However, removing the properties before there is any damage from coastal
erosion means that there is a loss of residential use value. This is the value to the people who would
be able to live or work in the properties for the 30 years prior to the coastal erosion damage occurring
(see Box 1 below for further explanation). This loss of residential value is slightly mitigated under
option 6 with the option of leaseback for 15 years, however amenity values are subsequently reduced
due to the delay in conversion of each lot to open space.

For Teewah options 5 and 6 return positive NPVs of $16m and $9m respectively. The results for
Teewah are driven by the very limited number of properties affected by coastal erosion prior to 2100.

Under this option land is transferred from residential use to public open space. The residential use
value of these properties is very high, given the current market value of the properties. There is
currently limited data on the potential value of these properties should they be converted to public
open space. An estimated value of $1 million/ha of additional open space has been used from a study
of the value of public open space in Australia (Ambrey and Fleming, 2014). On this basis, the value of
land as public open space would be lower than for residential use at the Eastern Beaches. It may be
worthwhile undertaking this option however the value of public open space is highly uncertain, and the
results may therefore be over or underestimating these public open space benefits. The value of
these specific public open spaces (in Teewah) to the Noosa community would need to be understood,
through surveys or community consultation.




AITHER | Final Report                                                                                 18
Noosa Shire Council – Coastal Hazard Adaptation Plan