Follow-Up On EPA Madness

Many of you responded yesterday to the ridiculousness of the new EPA rule.  Several of my clients chimed in.

Jed writes:

Yes Jeremy this is absolutely true!  And contractors, landlords, and homeowners will take a huge liability working on any home dealing with paint (drywall,baseboard,etc...) built before 1978.       

My company has already been forced to train its employees on lead based paint at a cost of $200 per person plus licensing with the state at around $600.00.  We are also required to test for lead based paint(at a cost of $200-$400 per home) on any home before 1978 before we can do any work (which could create delays of up to a week).  They are telling me that as a contractor i am liable for every layer of paint that has ever been painted in a home with no affordable full-proof test available. ---What???      

So yes--we have already felt the effects of this new EPA mandate--the costs of which will be pushed to homeowners, landlords, and insurance companies.  If a positive lead test is found in a home, mitigation will be similar in cost to asbestos and mold mitigation--which we all know is not cheap.  So, I guess the question:  is this regulation really to keep us safe-- or to give lawyers another way to line their pockets???

 Jed works in the contracting business.  I reviewed the state program that is supposed to substitute for EPA regulations in this regard.  You can find those rules HERE.  Jed is right, they are treating lead paint like asbestos.  We all need to invest in companies that sell those plastic space suits.  Question:  When will the FDA start treating trans-fats like they are asbestos? 

Now what is the gut reaction out there?

Mark writes:

Interesting topic.  I was talking with an insulation contractor yesterday about this.  He was describing the process that a contractor must follow in order to comply.  Plastic sheeting around the house, respirators, etc..  It was rather ridiculous.  According to a window contractor it will add $400 to the cost of each replacement window to comply.  This may be an exaggeration, but even so this wonderful rule will add substantially to the cost of any remodel.  I envision investors just won't mess with houses older than 1970.  It's sure making me think twice about what to do next.  So much for downtown Ogden

I can corroborate the window story.  In talking to another client of mine he recently received two window bids.  One for $2,500, and another for $7,500.  The difference?  The second bid included a lead-remediation fee.  Mark makes an interesting point about investors wanting to steer away from homes built before 1978.  I would say that the supply of investment houses newer than that is pretty small.  If we increase demand for investments newer than 1978 then the prices go up and they aren't investments anymore.  So, that leaves us with the existing supply of investment housing older than 1978.  What will happen to them?  Investors are business people, they aren't going to buy an investment and lose money just because the EPA says they should.  Something has to give.  What will give?  The banks and owners if investment grade property will have to foot the bill via lower house prices.

So right now the question is, how does the State of Utah plan to enforce this law? If it is soft on enforecement, price changes may not need to happen.  If they are rigorous, then price adjustments will be necessary.  Regardless, we will see how things play out over the next year.  I believe it will take some time for the market to become aware of this new law and adapt to the changes.  In the meantime, I will be talking to my friends in State Government to try to neutralize this ridiculous law.