Property owners along a waterway (and often far from a waterway) can take actions that create or worsen flooding for other property owners. For example, property owners upstream may develop their land, causing heavy rains to fill a river more rapidly and flood property downstream. Or, downstream property owners may impede the flow of a river, causing it to back up and create flooding upstream.
These can be highly complex situations, and it may be extremely difficult to identify cause and effect. But that does not mean that we throw our hands in the air, declare the situation hopeless, and cede the entire matter to government. It means that we begin by fully understanding the applicable principles and apply them within the context of our current knowledge. This does not require omniscience or infallibility--both of which are impossible of any human being, and even more so of government officials. It does require a recognition and respect for the property rights of all individuals.
To illustrate the application of "first come, first served", let us assume that 3 men--Tom, Dick, and Harry--own land along a stream. Dick owns land in the middle of the other 2. Let us consider different scenarios, how their property use may impact the others, and how we should apply property rights to those situations.
Scenario 1: Dick owns a home on his land, while the land owned by Tom and Harry is undeveloped and unused. Neither Tom nor Harry may do anything with his land that later interferes with Dick's ability to use his home. Tom, who is upstream, may not develop his land and cause so much water to fill the river that Dick's house floods. Harry, who is downstream, may not block the river and cause so much water to back up that it floods Dick's house. Dick's prior use of his property prohibits the others from interfering with that use. The same would apply if Dick used his land for crops—the others may not take actions that would harm or damage the crops.
Scenario 2: Dick is still the only property owner who has developed his land. On occasion, a heavy rain causes his land to flood, with the water sometimes entering his home. He decides to build a levee to prevent this from occurring. During a heavy rain, the levee causes Tom's land to flood and he claims that Dick has violated his rights. But what use has Dick denied Tom? If Tom is using his land to grow corn, and the flood destroys his crop, his claim is legitimate. If Tom is not using his land then the flood has denied him nothing--no value was destroyed or harmed.
Scenario 3: None of the men have developed their property. Harry decides that he would like to create a small lake on his property and partially blocks the flow of the stream. While he creates the desired lake on his property, he also permanently floods a portion of Dick's land. In this case, Dick's rights have been violated. Though he was not using his land for any human value, the newly formed lake denies him the ability to ever do so. His property has been permanently altered by Harry’s actions, and this has occurred without Dick’s consent. Just as one cannot steal a neighbor’s car because it has been sitting in the driveway for months—i.e., is unused—one may not “take” a neighbor’s property by permanently flooding it.
These scenarios hardly exhaust the possibilities. And some situations may be much more complex, with hundreds or even thousands of property owners impacting the situation. Government has a legitimate and proper function in this regard: to identify and define the respective rights of the property owners, as well as what would constitute a violation of those rights.
This does not mean that government should demand, dictate, restrict, and regulate land uses. If Tom wishes to develop his land, he is free to do so. But his use may not harm the property of other owners. This might require him to limit the scope of his development, or build retention ponds, or take other measures to prevent downstream flooding if such flooding would violate the property rights of others. He should be free to act according to his own judgment, and then be held accountable for his decisions.
So far I have addressed relatively simple examples in which the relevant property owners are easily identified. But what of more complex situations, such as