UD offers report on coastal economy

It will surprise no one who sat in Route 1 traffic between Lewes and Rehoboth Beach this summer to know that the coastal Delaware economy has been booming.

The degree to which it is booming has been laid out in a new report from the University of Delaware’s School of Marine Science and Policy called “Seaside to Statewide: The Economic Contributions of Delaware’s Coastal Region,” written by Dr. James Rising and Caitlin Wilson.

Rising said the purpose of the report was to try to understand the effect of the coastal economy, both locally and statewide. The report also includes the risks to that economy and policy recommendations for keeping the golden goose laying eggs.

Rising said coastal Delaware grew five times faster than the rest of the state during the period between 2011 and 2021. He said the ripple effect of this growth is every dollar spent at the coast generated an extra 58 cents of revenue outside the region. This extra spending could be everything from construction and transportation to businesses paying for supplies to employee spending on goods of their own. 

While the coastal Delaware economy is multifaceted, the primary industries driving it are tourism, real estate, construction, healthcare, finance and retail. While tourism is fairly self-explanatory – the beaches are here, after all – Rising said real estate has become extremely valuable over the last decade, leading to surges in residential development and construction. According to the report, 8% of the coastal economy’s revenue comes from construction. 

While sectors like retail can be tied to other industries like tourism and real estate, healthcare and finance are functions of a population that, even though it is growing, is also aging. Rising said the growth in finance can be explained by both the amount of retirees coming to the region needing those services and the fact that in the wake of the COVID-19 pandemic, those services were more able to be provided remotely. 

“Delaware’s coastal economy acts as a cornerstone for the overall economic health of the state,” Rising said. “But it also faces tremendous threats from sea-level rise and extreme weather. Some local business owners are even concerned that flooding and sea-level rise will undermine tourism and growth in the future without sound investments.”

Rising said risks to the coastal economy, such as sea-level rise and climate change, should be mitigated through infrastructure investment, such as beach renourishment and rip rap to reduce the impact of storm surges and provide natural buffers around wetlands. In addition, the report says municipalities can adopt building regulations to be above base flood elevations and require impervious surfaces for driveways. 

“If we don’t make these investments, the engine of the coastal economy could stall,” he said.

To view the report, go to deseagrant.org/hazards#seaside-statewide.