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Environmental Contaminates - North
American Real Estate
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Environmental Factors: Valuation of Contaminated Properties:With the existence of Real Estate Disclosure Laws, all aspects of any property come into full view and scrutiny at the time of sale. A knowledgeable buyer will discount any negative areas. It would be foolish to overpay your real estate purchase or property taxes by not taking your property's liability into consideration. Cleanup costs, cost of liability prevention and any attorney's legal fees constitute the direct cost of renewing contaminated property. Other market factors such as, impaired financing costs and other intangible market factors, represent the stigma of increased risk. By putting dollar values on these risks, you will arrive at market value. According to an article written by James Chambers and Thomas Jackson, this quantification of risk is the precondition necessary for contaminated or previously contaminated properties to regain their marketability. Toxic ContaminantsDrinking Water:In many situations, you cannot sell a home unless environmental problems are corrected. The reason for making an adjustment is that the marketability of your property has suffered and will not sell for the same price as another property not located near or affected by an economic ill. One in five Americans drinks water that is not adequately treated for toxic chemicals, bacteria, parasites and other pollutants. Environmental Protection Agency (EPA) data indicates that nearly 50 million people are drinking improperly treated water. Over 700 toxic compounds have been identified by the EPA. There are an estimated 16,000 city landfills, 76,000 industrial landfills and 1.2 million underground gasoline storage tanks that are likely to leak. Steel tanks will corrode. 2,000 out of 50,000 toxic waste sites affect the health of people living nearby according to the EPA. In regard to the threat of toxic contamination to real estate values, an environmental publication stated, "...aggregate loss could well exceed 10% of the total U.S. real estate value." That figure may seem high, but, more importantly, winning reductions in assessments due to toxic contamination will underline the health risks in understandable dollar terms to responsible authorities. Environmental groups say "millions of people drink water that contains harmful levels of arsenic, radon and chlorine byproducts." Many counties suffer from heavily pesticide-contaminated groundwater. The EPA found that of the water systems in violation of EPA standards, over 90% were in smaller water systems serving less than 3,300 people. The federal 1996 Safe Drinking Water Act requires all public water systems to provide water quality information to their customers. In a study examining the values of 708 single-family homes located within a 2-mile proximity to the Anoka Regional Landfill in Ramsay, MN, results showed a 12% reduction in property values along the landfill boundary and a 6% reduction in property values one mile from the boundary. The proximity of a neighborhood or any part of it to a hazard or nuisance can affect value. Property within a mile of sites listed in the EPA's National Priority List and the state CERCLA (Comprehensive Environmental Response, Compensations and Liability Act) and/or other state or local lists of hazardous waste sites may be a potential problem and reason for a property tax adjustment. Point-of-use reverse osmosis units installed under the sink, carbon filtration systems and devices using distillation or ultraviolet light technology can be bought for under $1,000. If the water is suspect, enter an adjustment.. PCB's:Polychlorinated biphenyl's (PCB's) found in leaking fluorescent lighting and electrical transformers or other toxic chemical leakage can also affect your water quality. Soil contaminants are spread by runoff into wells, streams or adjacent land, and further leaching occurs as the contaminants are flushed through the soil. Underground storage tanks, nearby hazardous waste sites, land fills, run off from existing or prior storage/delivery facilities, such as gas stations, oil suppliers, paint or chemical manufacturers, agricultural pollution, acid mine drainage, infectious medical wastes, may be a reason for a property tax reduction. If water is suspect, enter an adjustment. Nitrate Poisoning:This toxin from excessive use of fertilizers has been found in groundwater not only in the Midwest, but in regional farming communities throughout the United States. Herbicides and pesticides show up in the groundwater and well water. Ultimately your garden vegetables are contaminated. The EPA states that 3% of domestic grown food and 6% of imported food exceed legal tolerance levels for pesticide residues. Researchers at Cornell University found that 60% or more wells in rural areas contain unsafe levels of one or more poisons. Nearly two out of three water systems were repeat violators of EPA nitrate standards over the last 10 years. Septic Tanks:An improper working septic or neighbor's septic may also be a cause for contamination. Any source of contamination to the drinking water affects the value of the property and should be adjusted for. Oil Storage Tanks:Even buried home heating oil storage tanks can be a potentially explosive liability problem. It is estimated that a large percentage of tanks over ten years old are leaking and cleanup costs of over $25,000 are not uncommon. The EPA estimates that "as many as two million of the more than five million underground storage tanks in the United States may be leaking." Closure activities requiring soil sampling, contaminated soil disposal and regulatory reporting normally costs $4,000-$7,000. Change in usage, stressed vegetation, or unusual smells may warrant further investigation. Tank inspections for 1,000 gallons or less cost about $500. If you have a underground oil storage tank and your comparables do not, an inspection fee and an insurance fee for leak liability adjustments are in order. Disclosure laws will reveal any irregularities and any knowledgeable buyer will insist on a test. Asbestos, Lead, UFFI:Building codes and government regulations outlawed asbestos insulation in 1979. In 1986 other asbestos products such as roofing tiles, pipes, etc. were banned. Construction prior to these dates have a higher probability of having asbestos products than buildings constructed after these dates. If you have asbestos, especially pipe coverings (which look like white corrugated cardboard or hard plaster inside a paper wrapping), heating/hot water unit coverings, asbestos tile, asbestos siding or other asbestos products, an estimate for its removal should be obtained and a market price adjustment should be made. In the matter of asbestos contamination, an appeal to the Appellate Division of the State Supreme Court in 1992 ruled in favor of the property taxpayer, "The presumption of validity of an assessment by the taxing authority is rebutted where, as here, credible evidence to the contrary is received." Also, the owners got a tax refund. Lead Paint:This was commonly used between 1940 and 1980 and must be removed from a house to ensure its sellability. It was not until 1980 that lead paint was prohibited in new construction. This can result in thousands of dollars in adjustment savings, making your house equitable to comparable sale homes in your area. It may cost $5,000- $10,000 to have lead paint removed from your walls and to restore the walls to a condition equal to a comparably located property. Lead in Drinking Water:The EPA safety level for lead in drinking water is set at 20 micrograms per liter equivalent to 5 ppb (parts per billion), yet an estimated 42 million people may be consuming high levels of lead. Recently, The EPA Office of Drinking Water has proposed regulations under the Safe Drinking Water Act (SDWA) that establish a maximum contaminant level for lead in drinking water of five micrograms per liter and a maximum contaminant level goal of zero. The EPA found unacceptable lead levels in over 800 municipal water systems. Drinking water can be contaminated by lead water main pipes or lead solder combined with copper pipe where galvanic corrosion between the two metals releases relatively large amounts of lead into the water. Heat in the hot water supply increases the leaching process of lead to even higher levels. Contact local, county or state health or environmental departments for information about qualified testing laboratories. The cost for replacing lead soldered plumbing may be significant. Bring your home's value in line with a comparable home that doesn't suffer lead contamination by adjusting for the cost of removing the contamination. UREA Formaldehyde (UFFI):This foam insulation used as a building material from 1970-1982 is another product that also warrants removal. Urea formaldehyde gives off noxious odors, toxic fumes and is a respiratory irritant. The cost of removal and any replacement to the sheetrock, siding or cosmetic alterations is the adjustment necessary to reflect the market prices of comparable homes to the contaminated home. Electromagnetic Radiation (EMRs):Anytime an electric current runs through a wire, it produces an electromagnetic field (EMF). Electric Field:
Magnetic Field:
An estimated 10 million acres of land and one million homes in the United States lie close enough to transmission lines that the EMF levels on the property exceed the average household background levels. Public concern over power-line EMFs may decrease the value of this property. One recently published analysis estimates that the total economic cost of the EMF controversy exceeds one billion dollars annually. Electromagnetic Fields: This refers to magnetic and electric fields lumped together as one and can be a source of informational confusion; sometimes intentional, sometimes accidentally. The earth has a natural 500 mG DC magnetic field; it makes compasses work. An AC field is another matter. AC or alternating current is produced by making the current move back and forth 60 times a second (60 Hz.) It is this AC electromagnetic field that is tied in to leukemia, cancer deaths and other adverse health implications. Epidemiological studies are centered on children in order to rule out preexisting factors. Adults are equally at risk. The central study of electronic fields (EMF) was conducted over a 23-year period from 1950-1973 by Wertheimer and Leeper. They concluded that the children who lived in high-exposure homes with magnetic fields ranging from 2 to 2.6 mG (close to power transmission lines) were 2 to 3 times as likely to contract some form of cancer (specifically leukemia, lymphomas and nervous system tumors) than children who did not live close to power transmission lines (homes with low EMF readings). Another more recent study by Savitz as part of the New York State Power Lines Project (which was done with the thought to disprove Wertheimer and Leepers results) merely confirmed and better defined exposure criteria to EMFs and its link to cancer. The average field in high-current homes was 2-3 mG resulting in twice the risk for specific cancers. He found the same double risk for children living near high-current distribution lines. Children who lived in homes exposed to the highest currents were five times more likely to get cancer. Tomenius measured the proximity of high-voltage power lines (6,000-200,000 volts), transmission lines and other high current sources to childhood cancers in Sweden. He took the measurement from the front door of the children's houses and found that with intensities of 3 mG or above, those children were twice as likely to die of cancer. Other studies also showed increased cancer death rates for people living near radio or T.V. broadcast transmitters, microwave towers and radar beams from airports. Conditions of high blood pressure, chronic stress effects, chronic fatigue, changes in white and red blood cell count, increased metabolism, headaches, memory loss and brain damage have been associated with high EMF's in other studies. 115 kV-756 kV power transmission lines can show a 5 mG readings at ranges from 100-2,000 feet. Also at risk are homes within 120 feet of: large gauge primary distribution wires, 6 or more thin wires, first or second home close to step down transformer, within 60 ft of 3-5 thin primary wires. Also, improperly wired 3-way wall switches in the home and mistakes in wiring subpanels (not balancing the hot and neutral loads) cause high magnetic fields. While there is no established standard for a "safe" exposure limit to EMFs, the arbitrary 2 mG level used in epidemiological studies shows statistical relevance. Excessive EMF levels can be tested for by your local utility company (usually for free) using extremely low frequency (ELF) magnetic field meters. These instruments are also known as ELF Gaussmeters and can be purchased upward from $100. In 1993, 9 million dollars were spent in government-conducted tests to determine the harmful effects, if any, from EMFs. Through numerous studies on laboratory rats, no statistical relevance to disease was uncovered. Nevertheless, the perceived cancer risk resulting from a proximity to a high EMF source(s) would definitely have a depressing influence on the resale value of EMF contaminated property especially if the person buying the house was informed that it had high EMF readings and by moving into the house they would significantly increase their chances of disease and cancer death. With the ever increasing journalistic coverage of EMFs, the perceived contamination by the buying public will have a depressing effect on visually suspect, EMF-contaminated real estate. Fear affects purchasing decisions and where people choose not to live. In a relative case the New York Court of Appeals ruled in favor of a claimant stating that, "Whether the danger is scientifically genuine or verifiable fact should be irrelevant to the central issue of its market value impact." The judge cited another case,..."As the Court of Appeals of Kansas has noted, 'Logic and fairness...dictate that any loss of market value proven with a reasonable degree of probability should be compensable, regardless of its source.' If no one will buy a residential lot because it has a high-voltage line across it, the lot is a total loss even though the owner has the legal right to build a house on it. If buyers can be found, but only at half the value it had before the line was installed, the owner has suffered a 50% loss." Is there concern about electromagnetic fields? Nokia, Motorola and Ericsson mobile phones are concerned enough to develop radiation standards. Trade groups are insisting that mobile phone firms disclose radiation levels. Labels should show up on phones in 2001. Radon:Radon is a tasteless, odorless, colorless gas that is a product of uranium decay. Different types of rocks and soil contain various amounts of uranium and all have some potential for radon release. Radon is measured in PICOCURIES per liter (pCi/l) which is equivalent to one trillionth of a curie for one liter of air. Radon enters a home when there is a pressure difference. Even a 1/100 of 1% difference would cause air to move from a high-pressure to a low-pressure region (the same principle behind why the wind blows). Average soil radon gas in the United States is 100 pCi/l so it is easy to see why radon gas can enter by cracks between the floor and walls, openings around pipes, drains, cracks in concrete, and openings of any kind. According to the EPA, one in twelve homes (6 million) are above 4 pCi/l and some action should be taken to reduce radon concentration levels. The Washington Post printed, "Scientists believe that radon is responsible for as many as 20,000 lung cancer deaths each year." A New York Times article revealed that radon "may endanger 8 million homes." Figures for fatalities from indoor radon range from 8,00O to 30,000 per year according to the EPA and NRC. Radon decay products are the largest source of radiation exposure. "Homes with concentrations 10-100 times the average occur with startling frequency. Long-term occupants run a risk of developing lung cancer as high as that from heavy cigarette smoking." Energy-efficient homes increase the risk of cancer from radon gas. For example, an energy-efficient home may be equivalent to one air change per 10 hours, whereas an inefficient home may have 2 air changes per hour. The more time one spends in a radon contaminated home, the greater one's exposure. Byproducts of radon attach themselves to small dust particles (aerosols) which are breathed in and lodge in the lungs. These dust particles stay trapped in the lungs for as long as 30 minutes and damage sensitive cells by injurious radioactive radiation. Radioactive alpha particles pass through cell walls and cause multiple breaks in the DNA chain. When the cells repair the damaged DNA, they do so incorrectly and abnormal cells result giving way to tumorous cells. Smokers are even more at risk. According to research done by David Brenner, of the smokers who died of cancer, death rates as high as 1:3 may be attributable to radon and there is no telling how many deaths were caused by passive smoke. The National Research Council estimates that in the United States, at least 21,800 fatal lung cancers per year are due to indoor radon, and 6% of U.S. homes contain dangerous levels of radon. Radon levels vary in any given house. In summer, windows tend to be opened and in winter the home is closed up. The EPA has determined that 4 pCi/l is the level at which you should be concerned for your health. 4 pCi/l is equivalent to smoking 1/2 pack of cigarettes a day resulting in a death rate of 2 persons per 100 population. 2 pCi/l is equivalent to having 100 chest x-rays each year and results in a death rate of l person per 100 population. Methods to reduce radon include ventilating the basement, sealing cracks, holes, and joints in the basement walls and floor, installing a system of pipes, drain tiles with fans, etc. About 10,000 pCi/l of radon in water is equivalent to l pCi/l of radon in the air. The average concentration of radon in ground water is 5,000 pCi/liter with levels as high as 200,000 pCi/l for granite areas in Maine. One in twenty homes that gets water from private wells have excessively high radon water levels (about 2 million people affected). Water systems that are from reservoirs or water purification systems contribute to a low level of radon since this allows time for dissipation (radon has a half-life of 4 days). 20% of the population who use individual wells or small community water systems are over the 4 pCi/l level of exposure. Radon is released when pressure is reduced, temperature is increased or water is aerated. Therefore, the largest release of radon occurs when taking a shower or a bath, in dishwashers and washing machines. Even a cornfield releases 3 times the amount of radon as compared to the bare soil. The National Academy of Sciences affirms that the risk of lung cancer from inhaling radon is three to twelve times that of stomach cancer from consumed radiated water. A granulated activated charcoal filtering unit that is used for reduction of radon levels in water, costs from $800 to $2,000 for treatment in the 50,000 pCi/l to 150,000 pCi/l range. An Associated Press release in March 1994 stated that, according to the EPA, the average family water bills would have to be increased by as much as $242 per year in community water systems in order to reduce the radon in drinking water supplied by underground wells. In 1988, Congress passed a radon bill whose long-term goal was to reduce the indoor radon levels to 0.2-0.5 pCi/l. Effective July 29, 1994, the House in Washington passed legislation where home sellers have to tell prospective buyers the results if the building has been tested for radon. Radon mitigation of a high-radon contaminated home ranges from $1,000-$7,000+. Due to the negative psychological market resistance to high radon levels, the cost of eliminating the presence of radon to your homestead should constitute the equalizing adjustment. Listed are two providers of inexpensive radon test kits complete with laboratory results by return mail: Landauer, Inc., 2 Science Road, Glenwood, IL 60425-1586 (708) 755-7911, (800) 528-8327, Detector Price: $24.95. Key Technology, Inc., P.O. Box 562, Jonestown, PA 17038 (717) 274-8310, (800) 523-4964, Detector Price: $19.99 , Water Detector: $29.99. Noise, Traffic:Decibels measure how loud a noise is; every 8 decibel difference sounds roughly twice as loud to the human ear. Hearing damage from very loud noises worsen with longer exposure. Noise in Decibels relative to Noise Source 20 decibels = Quiet whisper Source: Temple University and the U.S. Environmental Protection Agency A survey of noise levels from 13 studies covering 17 airports concerning noise disturbance levels to people was published indicating the following results. Low = 60-65 Ldn or decibels (62.5 Ldn as midpoint of range) Studies by appraisers determining the reduction in property value on the level of noise found a 0.58% reduction in property value per decibel increase in the noise level over 60 Ldn or decibels. The following mean values were arrived at: Noise Level to Market Value Correlation Noise Level Low
Moderate Substantial Severe "Noise (is defined by HUD as that) which interferes with normal activities such as sleeping, conversation, or recreation. The noise causes actual physical harm or adversely affects mental health. Sound levels in excess of 75 decibels are not acceptable for proposed construction. Sound levels within 65 to 76 decibels may be acceptable with sound lessening measures such as air conditioning, extra insulation, etc." HUD will not accept proposed construction cases and existing dwellings less than one year old if the property is located within Runway Clear Zones at Civil Airports or Clear Zones or Accident Potential Zone 1 at Military Airfields. Call the airport, county, town or D.O.T. (Department of Transportation) to identify these conditions. Noise sources should be photographed and exact distances must be given for those noise sources which are in close proximity to the site. If your property is plagued with excessive road noise, heavy truck traffic, close to airplane landing and takeoff patterns, train noise, proximity to industrial noise, noise from a rock quarry or mining operation, then an adjustment should be made to reduce your tax burden. Noise that is physically annoying becomes a quality-of-life issue. Unnecessary noise is stealing your right to quiet. The .58% per decibel property value-noise relationship multiplier could be used to calculate the exact percentage of reduction for properties experiencing noise nuisance above the 60 decibel level. For instance, if your property is located close to a major highway and you hear the road traffic from your front door registering 70 decibels, that diminishes the marketability of your property by 5.8% (number of decibels, in this example, 10 decibels x 0.58%) when compared to similar properties that do not suffer this detriment. Studies show that every extra car added to street traffic has a corresponding negative effect on single-family housing prices. The least expensive Sound Level Meters have a self-contained microphone, accuracy of +(-) 3 dB with scales 35 dB-100 dB and sell for $135.00 in the Grainger catalog (toll-free order # 1-800-323-0620). Smoke, Odors:Exhaust fumes from rush-hour traffic may lead to carbon monoxide poisoning. Carbon monoxide is inhaled replacing oxygen and adheres to the hemoglobin in the blood and thereby reduces the amount of oxygen to body cells. Headaches, dizziness, drowsiness, confusion and cherry pink skin are some of the symptoms of carbon monoxide poisoning. Air pollution from acid aerosols and soot poses a "deadly public health threat" to 23 million Americans (9.1% of the country's population) according to the American Lung Association . These pollutants (called particulates) turn the air chalky or hazy and are more visible in the summer months. The EPA standard for particulates (only those small enough to be inhaled) is 150 micrograms per cubic meter of air. Some sources of air pollution are: excessive factory smoke, utility smokestacks, wood burning, mining operations, diesel bus and truck emissions as well as car exhaust. Chronic respiratory illness, such as asthma, bronchitis, and emphysema can result from constant exposure to particulate air pollution. If your comparables suffer equally from a shared determent, the sale prices of your comparables already reflect any adjustment. However, point out this off-site influence as having an overall depressing market effect compared to unplagued locations. If you live on a busy main street, busy corner lot or are exposed to particulate pollution, you have cause for an adjustment. Traffic levels are inversely related to single-family housing prices. Bad industrial odors affect the sellability of one's home. If you are located next to a landfill, transfer station or a bad smelling industrial site, that may diminish your marketability by 10% or more. A neighborhood fish market, dry cleaner, livestock, etc. could be another plight requiring adjustment. |
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