Analysis of a global elevation database to measure changes in shallow-marine habitat area as a function of sea level reveals an unexpectedly complicated relationship. In contrast to prevailing views, sea level rise does not consistently generate an increase in shelf area, nor does sea level fall consistently reduce shelf area. Different depth-defined habitats on the same margin will experience different changes in area for the same sea level change, and different margins will likewise experience different changes in area for the same sea level change. Simple forward models incorporating a species-area relationship suggest that the diversity response to sea level change will be largely idiosyncratic. The change in habitat area is highly dependent on the starting position of sea level, the amount and direction of sea level change, and the habitat and region in question. Such an idiosyncratic relationship between diversity and sea level reconciles the widespread evidence from the fossil record for a link between diversity and sea level change with the lack of quantitative support for such a relationship throughout the Phanerozoic.