February 5, 2004
By Julia Vitullo-Martin
OVER the veto of Mayor Bloomberg and despite the pleadings of prominent nonprofit housing developers, the City Council yesterday passed its Childhood Lead Poisoning Prevention Act. The new law holds landlords responsible for the presence of lead paint and dust and sets up a stringent schedule for inspection, removal and clean up. While a few of the law's features are good - requiring better procedures in handling lead dust, for example - others spell disaster for rehabilitating affordable housing.
One of New York City's greatest triumphs of the last two decades has been the rehabilitation of tens of thousands of units of affordable housing in once desperate neighborhoods. The South Bronx, Bedford-Stuyvesant and others flourish today because of the huge public and private investment in housing that began in the second Koch administration.
The lead-paint law will jeopardize further investment, say nonprofit housing developers, particularly in small, 20- to 40- unit occupied buildings in fragile neighborhoods. These are precisely the neighborhoods the City Council claims to be helping.
And while the comeback of many neighborhoods has been astonishing, the scale of what still needs to be done remains immense. Michael Lappin, president of the Community Preservation Corp., estimates that 1.4 million housing units "need ongoing access to capital" for new plumbing, windows, boilers and other repairs.
The "key thing," he argues, is to rehabilitate "occupied buildings that are still habitable. We don't want to wait until conditions become so bad that gut rehab becomes the only option."
Yet by making landlords solely responsible for the existence of lead-based paint, the bill sets excessively high legal standards of liability and deters rehabilitation. Indeed, the law permits landlords to be sued even when there is no lead paint in the building. If a child's blood is found to have elevated lead levels, the law presumes that the child's residence has lead - until the owner can refute the presumption in a contested proceeding, either in court or to a city agency.
The law gives tenants and tort lawyers a clear path to sue property owners, even those who are not at fault. Such liability will choke off insurance, which is already hard to come by in many neighborhoods.
Ronay Menschel, chairman of Phipps Houses, says that the bill is an "invitation to expand tort litigation that will waste precious resources to no good effect." The insurance industry has indicated very clearly, she notes, that "they're not going to provide insurance, particularly for small buildings owned by small-property owners."
The withdrawal of insurance in declining urban neighborhoods during the 1960s and 1970s nearly killed off American cities. At the time, few elected officials understood what was happening. Now our City Council is deliberately setting up the conditions for yet another withdrawal.
The bill's supporters scoff at these arguments, saying that responsible landlords have nothing to fear. Yet Phipps Houses has already been sued under the previous law for lead exposure in properties that were built in the last five years. "It cost us money to file papers just to have the suits dismissed," says Menschel. "A wave of litigious activity is going to waste resources that can be better applied to housing improvements."
Indeed, a consortium of nonprofit developers has produced a list of endangered projects: some 1,900 apartments slated for $70 million to $85 million in rehabilitation investment to begin over the next nine months. Their regular insurers warned them that the bill will imperil their ability to get liability protection on these occupied, pre-1960 buildings.
"If we can't get insurance or can't get insurance at a price the building could afford, we won't be able to do the rehabilitation," says CPC Executive Vice President John McCarthy.
Mayor Bloomberg pointed out another problem in his veto letter: Because the bill's onerous provisions are triggered by the presence of children, it may lead to increased discrimination against families with children. This has happened in Massachusetts, which has a very strict tort liability law on lead paint hazards.
City Council Speaker Gifford Miller has said he will amend the law if it proves to be as egregious as nonprofit developers say. But, of course, by that point both insurance and capital will have fled, as they often have before.
The mayor is now the best hope for affordable housing here: His housing and health agencies will write the regulations to implement the law, and may be able to limit the damage from the bill.
New Yorkers are lucky that this administration fully understands the importance of revitalized low- and moderate-income neighborhoods to the city's well-being.
Julia Vitullo-Martin is a senior fellow at the Manhattan Institute.
©2004 New York Post
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