[REN #470] Sneaky Ballot for Lead Paint Removal Protects Paint Companies

Picture of chipping paint for Real Estate News for Investors Podcast Episode #470

Paint companies trying to sidestep a court order for lead paint removal, are now pushing for a ballot measure that would shift the cost burden to California taxpayers. The measure is being called “The Healthy Homes and Schools Act of 2018” to clean up lead paint and other environmental hazards in old homes, but the state attorney general says it’s a wolf in sheep’s clothing.

The issue began with a lawsuit in 2000, against three companies that had previously made lead paint including Sherwin-Williams, NL Industries, and Conagra which owns Fuller Paint. Lead paint was banned from residential use in 1978, but the California cities and counties that filed the lawsuit argued that paint companies knew it was a health risk decades before it was banned.
 

Lead Hazards Well-Documented in 1929

As the Sacramento Bee reports, NL Industries once stood for National Lead. And back in 1929, the company was so proud of its paint ingredients it came up with an advertising jingle that went like this, “This famous Dutch Boy Lead of mine; Can make this playroom fairly shine.” And yes, it was a sweet-sounding rhyme, but the Bee writes that the hazards of lead were also well-documented at that time.

In 2013, a six-week trial in Santa Clara County ended with a ruling against the paint companies. The judge ruled that the presence of the lead paint was a “public nuisance,” and the companies knew of the danger. He ordered the companies to pony up $1.15 billion for a program to remove the paint from an estimated 3 million homes built before 1978. That’s when lead paint was banned. (1)
 

Court Upholds Ruling Against Paint Companies

That ruling lead to an appeal in 2015, which was heard in San Jose last summer. The three-judge panel upheld the previous court ruling, but reduced the liability to homes built before 1951. That’s when it appears that paint companies stopped promoting the use of the lead paint, and began telling consumers not to apply the paint inside homes. That also reduced the amount of money needed to clean up the mess to about $600 million.

The paint companies were not happy with that either and quickly turned their attention to another strategy — to convince voters that it’s in their best interest to pay for the cleanup themselves through a bond measure. They’ve already ponied up $6 million for the signature-gathering campaign and will likely spend a whole lot more to promote their initiative as a well-rounded solution to the problem of environmental hazards in old homes and other facilities.
 

Paint Companies Launch Bond Measure Campaign

Their measure calls for a $2 billion bond to pay for the removal of lead paint, mold, asbestos and other environmental dangers in homes, schools, and senior citizen facilities. It would also address the lawsuit by reversing the recent appeals court decision, and it would block any future lawsuits for lead-based paint removal.

Campaign spokeswoman, Terry Moffatt, said in a statement, “The Healthy Homes and Schools Act is a holistic and comprehensive approach to cleaning up existing homes in California by creating a statewide solution to address a variety of hazards in homes, such as mold, lead, asbestos, pests, and other threats.” She says, “Essentially, the initiative provides rehabilitation for old housing — providing a broader public benefit for all Californians versus cherry-picking winners and losers.”

The 10 California districts who filed the lawsuit are among those who are outraged over the initiative. The plaintiffs include Santa Clara, Alameda, Solano, Ventura, Monterey, San Diego, and Los Angeles counties along with the cities of San Francisco, Oakland, and other municipalities. They argue that the paint companies should pay for the lead paint removal and not the taxpayers.
 

Lead Paint Initiative as “Trojan Horse”

State Attorney General Xavier Becerra agrees with them. He recently announced his own title for the initiative that would make it difficult for the paint companies to get much voter support. His version of the title says that the measure “eliminates certain liability for lead-paint manufacturers.” The title is also subject to a court appeal, as reported by the LA Times. (2)

If this measure gets to the ballot, voters will be faced with two arguments that both promote the safety and welfare of Californians. An opinion piece in the Sacramento Bee offers support for the ballot measure. The author calls it a “common sense approach” that “replaces a bad court decision with a solid solution, providing peace of mind to California homeowners who have worked hard for their dream homes.”

An attorney representing California cities and counties told the Bee, “They think they can stop me with this crazy initiative.” Burlingame attorney, Joseph Cotchett says, “It is an end-run and it’s not going to happen.”

There’s also concern that this home-related bond measure could interfere with the passage of another more important affordable housing bond measure. Or worse, that paint company lobbyists would be successful at convincing initiative sponsors to combine the two measures. That would provide more campaign money to help with the passage of the affordable housing effort, along with the paint companies effort to relieve themselves of lead paint liability.
 

Millions of U.S. Families Exposed to Lead Paint

As you know, lead paint in older homes can deteriorate into dust and paint chips that can be inhaled or ingested by children. According to the Centers for Disease Control and Prevention, at least 4 million families with young children in the U.S. are exposed to lead paint in their homes, and about half a million children have elevated levels of lead in their blood. There is no safe blood level for lead, and its exposure can have an adverse health impact on every system in the body. (3)

Links:

(1) Forbes Article

(2)LA Times Article

(3) CDC Article

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