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Cato Policy Report, March/April 1997

How the Scaremongers Drive Up Home Prices

"A bible for buyers and sellers of homes"

The media constantly bombard American homeowners and homebuyers with scare stories about radon and asbestos, lead in paint and water, and radiation from power lines. Worse yet, federal regulators at the Department of Housing and Urban Development and the Environmental Protection Agency fuel that destructive process with inflamed rhetoric and hasty action. In the new Cato book Haunted Housing: How Toxic Scare Stories Are Spooking the Public Out of House and Home, Cassandra Chrones Moore, an adjunct scholar of the Cato Institute and the Competitive Enterprise Institute, argues that we should take a more dispassionate and reasoned approach to those problems.

Bruce Ames, director of the Environmental Health Sciences Center at the University of California at Berkeley, says, "The book is sensible, scholarly, and skeptical, and wonderfully well written. A Bible for buyers and sellers of homes, regulators, legislators, and public policy types."

Anyone who owns a house built before 1978--the year that Congress banned the use of lead paint--already must disclose all known information about lead in the unit and give the buyer a pamphlet about the dangers of lead, or face imprisonment and a fine of $10,000. In addition, there are regulators who would like to see all lead paint removed, an approach that would cost in excess of $30 billion. Moore argues that those regulators have greatly exaggerated the danger that most Americans face from lead. "Before government pours additional millions or even billions into lead abatement, before homebuyers shoulder extra financial burdens, and before the rental housing stock shrinks further, perhaps it is time to undertake a long-overdue reassessment of the premises on which the Department of Housing and Urban Development, the Environmental Protection Agency, and the Department of Health and Human Services, and Congress base their pronouncements and proposals."

Equally questionable is whether radon is the threat that many have deemed it to be. In large quantities, Moore argues, it is undoubtedly harmful. But, on the other hand, exposure to low doses might be risk free or even beneficial, given that such exposure may in fact reduce the risk of cancer. As a result, she contends that there should be no federal push to screen all houses for even the most minute traces of radon. "Should the public allow regulatory gurus to implement policy that may depress the equity in 70 million homes?" asks Moore. "Buying a home is expensive as it is; adding the costs of testing and mitigation may not only restrict the choices available to a first-time buyer but price that buyer out of the market."

Suits against asbestos mining and manufacturing companies have resulted in the payment of billions of dollars in settlements and damages, and there may be 100,000 more suits in the next decade. Moreover, the discovery of asbestos in a house that is for sale is likely to force negotiations to reopen, trigger higher closing costs, and perhaps cause the asbestos to be removed at great expense. Again, Moore argues that those costs have been imposed unduly and that the dangers of asbestos have been inflated artificially. In addition, she notes that removing asbestos may actually be more dangerous than leaving it where it is. Once asbestos fibers become airborne, they can remain in the air for months or longer. And those who are charged with removing asbestos are directly exposed for extended periods of time, which can lead to an increased risk of lung cancers and asbestosis.

Concluding her discussion, Moore argues that absolute safety and a risk-free society are unattainable goals. "Yet," she maintains, "the EPA, often encouraged by Congress, continues to act as though all hazards can be eliminated. Everyone who owns a home or who wants to be a homeowner--all citizens, in fact--has reason to object to the EPA's pursuit of the impossible."

This article originally appeared in the March/April 1997 edition of Cato Policy Report.