The Flint water crisis in Michigan, which peaked in media coverage between 2015 and 2016, sounded the alarm on our nation’s aging infrastructure and the resulting detriment to public health. Over the past year, it has become clear that New Jersey is also battling the critical issue of lead in water, along with paint and soil. As older municipalities strive to attract new economic development and residents, lead contamination may pose a major obstacle.
The Don’t Just Leave it There: Addressing Lead in Redevelopment session, part of the 2020 Redevelopment Forum, focused on lead issues related to disclosure, transparency, business recruitment, and redevelopment of residential and commercial property. Gary Brune, Policy Manager at New Jersey Future, moderated a discussion among panelists: Peter Rose, Managing Director of Community Enterprises at Isles; Marjorie Perry, President and CEO at MZM Construction and Management; and John Boyd, Principal at The Boyd Company. The discussion was guided by a central question: “To what extent is lead contamination an obstacle to redevelopment in New Jersey and what does the future hold?”
In New Jersey, disclosure is mandatory for building defects, but voluntary for environmental hazards such as lead. That is a primary factor in why the state earned a D grade in a 2017 report by EDF rating all 50 states on their lead disclosure policies. When it comes to disclosure, there is a fundamental conflict between personal safety and real estate value. On one hand, the first step to remediating lead contamination is determining where it is, but greater transparency could lead to decreased property values and reduced investment and/or redevelopment. There was general agreement among the panelists that disclosure is a necessary measure. According to Rose, “It’s good public policy. It’s good health policy. It’s actually good economics for everyone.” He also argued that in most places where property owners assumed disclosure would have a terrible effect, it actually improved the situation and most landlords are content.
Boyd provided the perspective of site selection in the development community and how lead contamination is an obstacle for new development and new job creation. He claimed that, more often than not, if a developer is deciding between a site with lead and one without, the site with lead will be eliminated from the process. Additionally, Boyd noted that clients will be wary about the broader potential impact on property taxes and water utility rates as communities establish financial plans to deal with the problem.
Boyd further emphasized that lead contamination is both a health crisis and an economic development crisis, describing it as “a battle that needs to be fought on both fronts.” Noting that disasters like the lead crisis can serve as a pivot point for development and redevelopment, Boyd highlighted the examples of Flint’s Capitol Theatre restoration, which served as a lynchpin for broader downtown redevelopment, and how New Orleans and Baton Rouge positioned themselves to be national leaders in the water management market after the devastation of Hurricane Katrina. He thinks that Newark, with its proximity to New York City and a strong financial industry presence in the region, has a similar opportunity to become a leader in environmental infrastructure.
Brune asked the panelists if the presence of lead contamination affects redevelopment in all cities similarly or if some are more constrained than others. He referred specifically to the differences between cities that are close to New York City, like Newark and Jersey City, and cities that aren’t, like Trenton. Perry explained that cities like Hoboken, for example, are able to address the lead problem more effectively because they strike a balance between offering tax credit incentives to attract development and utilizing tax income to pay for lead solutions. She emphasized that cities offering tax credits over longer periods of time (e.g., 30 years, rather than 10) miss out on money that could be put towards remediation.
It is clear that lead poses multiple challenges to redevelopment in New Jersey, but there are solutions at hand. For one, improving disclosure and transparency is an important step towards resolving the issue. Regarding business retention, Newark and other cities may be in a position to take advantage of the opportunity to become a leader in solving the lead crisis while spurring development and redevelopment. Overall, redevelopment for both commercial and residential properties will require strong public policy. As Perry noted, it is important to strike a balance between offering tax credits and utilizing tax funds. Newark may be a model to look to, with its property access law, methodical replacement of lead service lines, and presence of robust financial and technology industries. However, areas like Trenton that are not located near robust economic centers like New York City, will need more assistance.
For more information on lead in drinking water in New Jersey, please refer to Jersey Water Works’ Lead in Drinking Water Task Force Report, published in October 2019.
This summary was written by Kimberley Irby from New Jersey Future.