Your UST May Be Lowering Your Property Value
Underground storage tanks (UST) containing potentially hazardous and environmentally destructive materials are incredibly prevalent across the U.S. There are over half a million active USTs and another two million inactive tanks across the country. More than half a million active and inactive USTs have been associated with leaks releasing these chemicals into the environment. Discovering a leaky UST on your property can mean a significant delay or total derailment of a real estate development project, and it can have a serious effect on whether the property can be sold. Safe and efficient repair or removal of a UST, especially if there has been a leak, can be absolutely vital for maintaining or increasing the value of a parcel of land, not to mention avoiding an environmental catastrophe. The Environmental Protection Agency (EPA) conducted a study to determine how the presence of a UST release affects property values.
The EPA’s Methodology
In a recent study, the EPA set out to develop “monetized estimates of the benefits of preventing and cleaning up UST releases, as reflected in house values.” To evaluate the fiscal effects of a UST leak, the EPA looked at 17 of the most high-profile UST leaks across the country and analyzed housing prices in nearby locales in association with various milestone events such as the discovery of the leak, the cleanup, and a look at prices several years after the cleanup. The EPA’s method involved accounting for housing trends in specific locales and evaluating the effects on house prices at different distances from the leak site.
The EPA’s Findings: UST Leaks Lowered Property Values, but Effective Cleanups Helped Values Rebound
The EPA concluded, predictably, that the presence of a UST leak nearby a property does have a measurable effect on the value of nearby houses. Across the five years following the discovery of a leak, housing values in nearby areas decreased by an average of three to six percent, with diminishing effects for houses farther from the leak. Even houses as far as three kilometers from the leak were affected in terms of property value. (You may recall from our previous article that a negligent landowner may be responsible for damage to their neighbor’s land. Whether that includes property value loss is worth considering.)
The EPA’s results were encouraging for landowners dealing with leaky USTs, however. Property values on the whole completely rebounded within five years after a successful cleanup. The EPA noted that their review might not represent all UST leaks, given that they looked specifically at high-profile, large releases, but their findings are still interesting. The results strongly suggest that the prevention of UST leaks is important in maintaining property values and, following a leak, effective cleanup is extremely helpful in restoring property values for not only the parcel on which the UST lies but also the surrounding areas.
Call in the Professionals at Lutz to Handle Your Underground Storage Tank Issues
If you find a UST at your construction worksite or are dealing with a UST spill on your property, get help from trusted advisors with years of underground storage tank experience. For advanced, professional assistance, call Herbert Lutz & Company, in Florida at 954-971-5222, or in New Jersey at 908-862-8888.