Environmental hazards can cause health problems and hurt home values. When in doubt, order a neighborhood environmental report before you buy
Falling home prices may not be the only thing poisoning your neighborhood. Landfills, abandoned manufacturing plants, and leaking underground petroleum tanks sometimes lurk in the backyards of unsuspecting homeowners and home buyers, leading to serious health issues and spoiled real estate markets.
Which areas of the U.S. have the highest concentration of contaminated sites? The list might surprise you. Baltimore, Milwaukee, and Portland, Ore., are three of the biggest offenders when it comes to number of contaminated sites per capita, according to Environmental Data Resources (EDR), a provider of environmental risk information services based in Milford, Conn. But EDR is quick to note that this doesn't automatically mean the cities aren't safe.
Metro Areas Rank High
"I'm pretty confident with these numbers, though I prefer to call them 'environmental concern sites,' " says Dan Onofrio, associate vice-president for content and data development at EDR (sites are, however, labeled as "contaminated" in our report).
EDR draws its numbers from over 1200 unique environmental databases containing public records at federal, state, local, and tribal levels. An environmental record of a contaminated site may be a landfill, manufacturing plant, or station where hazardous substances are transferred, like a port (a main reason coastal cities like Baltimore and Portland register a high number of contaminated sites). But it may also include sites that are registered for a permit to get an underground storage tank put in, such as a gas station.
BusinessWeek.com looked at number of contaminated sites per capita because the metropolitan areas with the most contaminated sites are, in general, the largest metro areas. Los Angeles ranks first when it comes to sheer number of contaminated sites, with a total of 271,360 on record. New York and Chicago follow, with 191,356 and 103,704, respectively.
"While there are many ways you can look at and quantify what is hazardous waste, the biggest thing is just raising awareness for citizens in general," says Onofrio. "It's important for people to be aware that these sites exist—and they could be right in their back yard."
Danvers Explosion Destroyed Market
For the residents of Danvers, Mass., awareness came too late. Last November, around 3 a.m., a local chemical plant exploded, knocking some homes off their foundations and damaging buildings as far as half a mile away. Though no one was killed, 10 people were injured and approximately 90 homes were damaged. Nearly a year later there are still 45 boarded-up homes and 20 displaced families, and home sales are slow, by local accounts.
"Certainly right now the neighborhood is at its lowest point in terms of home values," says Ed Sanborn, a 14-year Danvers resident and IT manager whose own home was damaged by the explosion. "Across the river, we've got a number of homes that went up for sale around the time of the explosion or just after and they haven't sold yet. You drive down our neighborhood, it's like a demolition zone—who the hell would want to live there right now?"
Had Danvers residents known about the plant, they might have thought twice about buying in the area. But unlike school systems and crime rates, neighborhood environmental hazards often run under the radar, Onofrio notes.
Toxic Spill in Greenpoint
Residents of the area around Greenpoint, a neighborhood in Brooklyn, N.Y., may have reason to worry. A 1950 ExxonMobil (XOM) oil spill has led to the accumulation of gasoline, solvents, and other hazardous substances in a vast underground lake. The spill was first discovered in 1978 and has been estimated to contain as much as 30 million gallons of oil and other chemicals, according to a September, 2007 report from the Environmental Protection Agency. At the current clean-up rate, the EPA says it will take 25 years to remove 70% of the oil. According to the EPA, there are four primary dangers associated with petroleum spills: toxic vapors; contaminated drinking water; contaminated food; and toxic skin contact.
Residents can take action to preserve their health and homes. In Danvers, residents have formed a volunteer organization called SAFE (www.safeareaforeveryone.com) as a result of last year's plant explosion. SAFE works with town, state, and federal agencies to identify potential environmental hazards and solve existing problems.
Neighborhood environmental reports from companies like EDR are also available through home inspectors for residents or homebuyers concerned about contamination—though you may not always hear about it from your broker. "I see a resistance in real estate agents to getting the reports," says John Zito, a home inspector with Deep Dale Atlantic Home Inspection in Long Island, N.Y. "I've had a real estate lady say to me, if you offer that service and you kill the deal you'll never hear from the real estate company again."
Environmental reports usually cost between $100 and $150 and will highlight environmental sites with known contamination in the vicinity of your home, as well as the type or types of contamination. This information can be vital in making a decision on a home. Zito recalls one client who uncovered an abandoned factory in the backyard and a commercial laundry on the other side of the road. They decided not to buy.
"The information is available for anyone who wants to get into it," Zito says. "If you're investing a lot of money in a house, you want to know that it's safe."
Click here to see a list of the metro areas with the most contaminated sites per capita.