New Lead Weight on Homeowners

The recent flurry of legislation coming out of Sacramento that claims to fix the problems for property owners created by a recent court decision on lead paint misses the mark and fails to protect millions of California – and San Fernando Valley – homeowners from the very serious threat they now face. The threat stems from the lead paint decision affirmed last year by the California Court of Appeal for the Sixth District. The court ruling was spurred by a lawsuit brought by trial lawyers, which claimed to “fix” the problem of lead paint in residential properties. Essentially, the court determined – in conflict with California’s well-established public health and housing laws – that certain lead paint on the interiors of homes is imminently harmful to the public, even if that lead paint is intact and well maintained. That decision appears to hold three paint companies’ feet to the fire by requiring them to fund a lead-paint abatement program totaling hundreds of millions of dollars. Ten communities participated in the original lawsuit: Santa Clara County, Alameda County, Los Angeles County, Monterey County, Oakland, San Diego, city and county of San Francisco, San Mateo County, Solano County and Ventura County. But the court also affirmed a radical interpretation of the public nuisance law that will create a costly cascade of consequences for California property owners in those 10 jurisdictions with residential properties built before 1981. Those 4.7 million homes have been declared public nuisances, subjecting them to government inspections for lead paint, and if necessary, abatement pursuant to the court’s order. Home to more than 1.7 million residents, the San Fernando Valley, where the vast majority of homes were built before 1970, is hit particularly hard with this public nuisance labeling. Hard-working families throughout our region have a precedent-setting mandate applied to their most prized financial asset – and one purchased in a costly market with skyrocketing prices. How will that impact regional home values? It will likely decrease a property’s salability, and that is presuming a potential buyer could even obtain mortgage financing on a structure that may have to be leveled to cure the problem. Even if the home doesn’t have to be demolished, lead paint abatement is a slow, tedious, expensive process that can create its own health hazards. And let’s not forget that a dramatic drop in home values will also shrink the property tax base of those communities. What will that mean for local government budgets? Taxing the homes and businesses that are not victims of the decision is one likely option to make up the lost revenue. Either that, or cut public services like police, fire and schools. It will take many years to complete the inspection and abatement ordered by the court, while homeowners remain in legal limbo. Yet the court’s abatement fund only applies to homes built before 1951. That leaves owners of homes built from 1951 to 1981 to finance inspections and potential abatement out of their own pockets, which is an expensive proposition. It’s not just single-family homeowners who are in jeopardy, either. Under an existing California law meant to punish slumlords, renters in houses and apartments that have been declared a public nuisance can stop paying rent until all violations are cleared. Now, thanks to the court’s decision, law-abiding landlords who properly maintain their rental proprieties could see their monthly incomes plummet if tenants exercise this right based solely on the year the property was built. Designating millions of homes a public nuisance is unprecedented in the United States. Lawmakers have only recently awakened to the potential impact and are considering their options. The hastily written legislation we’ve seen so far – which largely died in committee – looks like a symptom of panic. None of the proposed bills address the problems that the court decision imposes on homeowners and the communities they live in. In fact, AB 2803 – introduced by Assemblymember Monique Limon from Santa Barbara – only makes this court ruling worse by applying the public nuisance standard statewide. The media have a major role to play in all this. Californians deserve to know how the court’s decision impacts them. Valley homeowners need to hear what our state leaders are doing to fix this looming problem. When property owners and their families go to the polls in November, they won’t be likely to accept excuses or apologies from their public representatives. Andor Molnar is a former director and past president of the Los Angeles County Boards of Real Estate.