126 
for land from these capital-intensive uses far outstrip those of public 
recreation and have led to the supply situations discussed in previous 
sections, that is, most of the shoreline is in private hands. ib: 
Competition among the highly capital-intensive uses is particularly 
strong near the metropolitan areas where the demands for private 
recreation, housing, commercial development, and industrial develop- 
ment are all heavy, and results in severe escalation of shoreline land 
prices. This happens even at greater distances from urban regions, 
where the competition is most likely between public and private de- 
velopment for recreation. Even here the demands of private parties for 
recreational shoreline have forced the prices beyong the reach of many 
local economies. The Bureau of Outdoor Recreation has pointed out 
this keen competition between individual developers and _ public 
agencies for prime recreation lands, especially those that are water- 
oriented. In a 1967 report“ on land price escalation, the Bureau 
reported that land values were generally rising, on the average, from 
5 to 10 percent annually, while the prices of lands suitable for public 
recreation were rising at considerably higher rates. As an example, the 
report cited an initial appropriation ceiling of $14 million dollars 
established by Congress for the acquisition of land for Point Reyes 
National Seashore in California, that was subsequently raised to $57% 
million dollars, an amount more than four times the original authori- 
zation. 
In the past, as long as there was plenty of available shoreline 
to satisfy all the demands from competing uses while still providing 
adequate opportunities for those seeking recreational activity, 
there was no perceived need to abandon the private market as an 
allocative system. Even today, the market is functioning in a pre- 
dictable way: as the supply gets smaller in the face of heavy demands, 
the price goes up. However, it is now clear that the conditions neces- 
sary for an optimal allocation of resources consistent with the values 
of society are no longer fulfilled in the operations of the private 
market regarding the coastal zone. One difficulty, clearly involved 
with some aspects of shoreline allocation, is that it is often impossible 
to put a price on certain values, much less find a way to translate 
these values into revenue. For example, consider the difficulty in 
trying to determine the value (in dollars and cents) of bluff shoreline 
as an esthetic attraction. Conceivably, a developer could provide 
coastal roadways with scenic vistas and charge user fees, but the 
uncertainty in setting a fee based on willingness to pay and the 
prospect of little or no short-term return on a large investment 
makes this highly unlikely. Another relevant point is that people 
will often misstate their values, depending on whether or not they 
think the good will be provided anyway. This would come into 
play if a State were to try to decide on a tax to be levied to support 
the provision of recreational facilities. Most people, if they thought 
a tax would definitely be levied, would understate their values; 
and the resulting tax revenues (if based on what the people said) 
would be too low to effectively finance proposed programs. 
This fact, together with the large numbers of people that must be 
polled, lead to high transaction (contracting) costs in the gathering of 
such information and seems to provide an insurmountable obstacle 
41 Department of the Interior, Bureau of Outdoor Recreation, “‘A Reportjon}Land Price Escalation,” 
January 1967. ' 
