Unfortunately, the new law failed to specify how thoroughly a prospective purchaser must investigate a brownfield site in order to be protected from liability for the cleanup of any environmental hazards on the property. Referred to in the bill as “all appropriate inquiry,” this issue is of central importance and yet it remains undefined. Nor does the law specify what should be included in any clean-up process.
Defining exactly what “all appropriate inquiry” means has been left to the groups involved in the rulemaking process, and they have until January to reach a consensus.
As NAHB’s representative on the committee, I can tell you that there are no easy answers. We are grappling with two very difficult questions: How restrictive and expensive do we want to make the requirements for investigating a property? And how can we ensure that the approach does not become unnecessarily onerous?
One thing is certain: An expensive and time-consuming process will discourage home builders from becoming involved in the redevelopment of abandoned sites.
The issue of establishing reasonable property investigation standards is all the more important because banks will require their borrowers to follow it.
Because the consensus that is reached will likely become the standard for all real estate transactions on these properties, I have emphasized the importance of coming up with a standard that is reasonable — even for those properties not associated with brownfields. No one disagrees that ensuring public health and safety deserves top priority in this undertaking, but if the standard is overly stringent, land developers will continue to shun these sites.
The two toughest concerns so far have been agreeing on the appropriate level of community participation in the process and deciding upon what information obtained during the clean-up investigation must be disclosed, and to whom.
As can be expected in a group that includes stakeholders from real estate, banking and community development groups, there is a range of opinion. NAHB’s interests are clear. We want to establish a standard that encourages developers to engage in brownfields transactions, which is what the law intends. And we want to ensure that the entire development community can use the standard we help to develop.
In the final analysis, working through our disagreements is well worthwhile. Returning brownfields and other discarded properties to productive use is today within the realm of possibilities. And at a time when it is becoming increasingly difficult to find available land on which to build the housing America’s growing population needs, at hand is an opportunity that the nation’s home builders do not intend to squander.
Marty Mitchell is chair of the NAHB Environmental Issues Committee.
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