Even by the standards of overpriced San Francisco, the Sea Cliff neighborhood is astronomically expensive. Nestled between two gorgeous parks and with what a realtor might describe as commanding views of the Golden Gate, it could hardly be different. Homes in the area routinely go for more than $10m. Jack Dorsey, the CEO of Twitter and the payment service Square, recently bought a place here for $21.5m – next door to his $18m present home. The 0.62-acre compound is recessed from the street and perched on a cliff overlooking the beach.

And that’s where things get interesting, because cliffside living has become an increasingly risky proposition in California. Warming ocean temperatures are whipping up stronger surfs and more brutal winter storms, causing cliffs to crumble ever faster into the sea. The consequences for thousands of cliff-top houses such as Dorsey’s could be catastrophic. Still, @Jack’s bet isn’t a bad one: depending on when the house goes over the edge, it might well be the rest of us that gets stuck with the bill.

That’s because most of the cost of protecting California properties from coastal erosion, wildfires and other effects of the climate crisis will eventually have to be met by the state, with public money. This means those costs won’t fall on the disproportionately white and wealthy people who own property. Rather, they’ll be increasingly borne by the working- and middle-class Hispanic, black and brown Californians that make up the majority of the state, many of whom don’t own real estate. Without really grappling with this reality, the state is slipping step by step towards a massive wealth transfer from the general public to the owners of private property. It’s one more way in which the climate crisis is also a crisis of racism and inequality.

What Sea Cliff could look like in a few years’ time can be glimpsed in the town of Pacifica, 14 miles to the south. Parts of the town, which is much more middle-class than Sea Cliff, sit directly on beautiful bluffs that overlook – and are tumbling into – the Pacific Ocean. When the town’s mayor proposed a “managed retreat” from the coast, home owners and local realtors revolted: the proposal would have effectively taken their homes off the market, cutting them off from potential profits. (Owners does not mean residents: about a third of Pacifica’s housing stock, including many of the most threatened buildings, consists of rental units.) So instead of a managed retreat, the city is taking money from the public coffers and using it to protect property investments by building sea walls and replenishing eroding beaches with trucked-in sand, among other measures.

This is a dynamic we have seen throughout the late capitalist economy. The sociologist Ulrich Beck described it as a change from “a logic of wealth distribution” to one of “risk distribution”. Profits are privatized, but risk is made public. The banks made a bunch of bad bets on crappy mortgage debts? Bail them out with public money and give the executives multimillion-dollar bonuses. Someone half bakes a fundamentally unprofitable tech business? Let them IPO it so they can liquidate hundreds of millions of dollars of stock options while transferring the ultimately worthless company into the hands of public pension funds and workers’ 401ks.

Sections of land missing from coastal properties in Pacifica, California, in 2016. Storms and powerful waves have intensified erosion along nearby coastal bluffs and beaches in the area. Photograph: Josh Edelson/AFP/Getty Images

That’s the same thing that is now happening in California, where the land is uniquely threatened and at the same time uniquely valuable. There is a concerted political effort not to manage the risk, but rather to keep it from impacting value by making the public bear the costs of the climate crisis through things such as the sorts of publicly funded disaster relief programs and state-subsidized insurance payouts that Jack Dorsey could theoretically benefit from. This is, in fact, what many of the owners of capital and real estate think the government is for: protecting the value of private property at all costs. It’s one of the reasons we have a climate crisis – instead of a robust, rapid transition away from fossil fuels – in the first place.

The sheer immensity of the climate crisis, and of California, ensures that more and more of the costs will be borne by the public. The Los Angeles Times estimates that $150bn in California property might be impacted by coastal flooding and erosion by 2100. That’s $150bn in private wealth which the government has made it a public priority to preserve.

Those costs are dwarfed by the risks created by the region’s intensifying wildfires, which threaten millions of properties around the state. Individuals and insurance companies currently bear financial responsibility for property damaged by wildfires, but there is already pressure to collectivize these risks.

It will go something like this: as houses become astronomically expensive, insurance payouts become astronomically large. In response, in threatened areas, private insurers will cancel coverage, or multiply rates to the point of unaffordability. The state will be forced to step in to stabilize the rates, and keep the land valuable, which will likely involve something like the National Flood Insurance Program, which subsidizes flood insurance provided by private insurers and underwrites the full extent of their losses.

Currently, the state is forcing insurance companies not to cancel coverage, but reinsurers are getting worried, meaning the pressure is on to decline coverage – something that is already happening in various parts of the state. This is exactly the point where historically the government has stepped in — and there are already calls for it to do so now.

The racist dimension to this wealth transfer must not be overlooked. Fewer than 55% of California households own their dwelling and only 42% of Latino households and 33% of black ones do. Non-urban space, open space, and at-risk space in California is today particularly white, or at least white-owned.

Especially in the sorts of rural areas threatened by wildfire, that disparity is highly dependent on California’s history of racial violence and exclusion. The genocide of California’s first peoples; restrictions on the citizenship status of Asian immigrants; the seizure of Japanese American land during the second world war; the arrogation of land for infrastructure projects in the postwar period; discriminatory lending practices, racial covenants and other racist real estate policies, perpetuated by de facto segregation – all worked to ensure that non-white property ownership in rural California has remained low and concentrated in dense cities.

All of this creates an unjust mismatch: the collective that is underwriting the risk of climate catastrophe will not be the same as the group that is incurring it. As a result, the siphoning off of public wealth to protect private property will increasingly favor white Californians.

Of course, that’s one of the reasons it’s likely to be politically acceptable. It would be difficult to imagine the government sanctioning a massive wealth transfer in the other direction, for example by relieving the mortgage debts of the black and brown Americans who were the primary victims of the subprime crisis. But when fire and other types of home insurance markets fail, as they are already beginning to do and inevitably will, the state will have to step in to shore up the largely white property market with black, brown, working and middle-class public money.

As the incalculably large price tag of climate change comes due, those excluded from the property market will increasingly foot the bill for California’s cult of the homeowner. It remains to be seen whether that cult will endure, or whether the state can rethink its relationship to real estate.

• This article was updated on 9 March 2020 to emphasize that individuals and insurance companies currently bear the risk for wildfire damage