[REN #179] PCBs Could be the New “Asbestos”

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Real Estate News for Investors Podcast Episode #179: PCBs Could be the New "Asbestos" in Apartments, Commercial Buildings and Schools

If you own a building that was constructed in the 1950s, 60s, or 70s, you need to be aware of potential PCB contamination – as it’s becoming headline news.

PCB’s or Polychlorinated biphenyls are man-made chemicals that were widely used in construction materials and electrical products in the 50’s, 60’s, and 70’s until they were banned in 1979.

Agricultural-giant Monsanto was the company that made PCBs, which were then used primarily in caulking, oil-based paint, floor finishes, and electrical equipment including fluorescent light ballasts.

When research linked PCBs to birth defects and cancer in lab animals, the EPA banned PCB’s in 1979. Fast forward three decades… and just this past May, a jury from St Louis awarded three plaintiffs $17.5 million in damages, plus an additional $29 million in punitive damages against Monsanto and three other companies due to their negligence in the production of PCBs.

And that is only the beginning… There are 97 other plaintiffs who are claiming that exposure to PCBs caused non-Hodgkin lymphoma. According to the St. Louis Post Dispatch, the lawsuit claims Monsanto knew about the dangers decades ago but falsely told the public the compounds were safe, and continued selling them into the 1970s.

Getting PCB’s out of the environment may be impossible. Rivers, streams and some food groups still contain high levels of PCBs. A number of studies show that farmed salmon could be the most prevalent danger to PCB exposure today because they accumulate PCBs from the fishmeal they are fed. Ahhh, and this news comes just when you thought you were eating healthy!

San Jose, Berkeley and Oakland have each sued Monsanto in federal court for the costs associated with cleaning up Bay Area water pollution from PCB’s. Two bills were recently passed that could play a big role in that trio of lawsuits.

Berkeley’s lawsuit against Monsanto says the city holds more than 4,300 acres of offshore property polluted by the company’s PCBs. Oakland’s tidelands and submerged lands total 5,000 acres.

Seattle, Spokane, San Diego and the City of Long Beach also sued Monsanto this year for ongoing PCB Contamination of Storm Runoff and Waterways.

PCBs have also found their way into landfills. That can be a big problem for people living nearby, and for groundwater.

One of the biggest concerns today is the presence of PCBs in aging schools across the country. Massachusetts Senator Edward J. Markey released a report in October stating that as many as 14 million students at 26,000 schools could be exposed to unsafe levels of PCBs contained in classrooms built between 1950-1980.

The day the report came out, Monsanto said it would set aside money for PCB lawsuits.

The report says: “Decades after the PCB ban, people are still being exposed to these toxic chemicals from various sources, such as caulk, some oil-based paints, and floor finishes.” It says old electrical equipment, leaking fluorescent light ballasts, and PCB-containing landfills can also be a problem.

The report is called “The ABCs of PCBs”. Senator Markey put it together with data from Harvard research and the Environmental Protection Agency.

This has been a huge deal in Malibu, where I live. Several teachers were diagnosed with thyroid cancer, which was soon blamed on PCB’s in the caulking of some of the older classrooms.

For the past several years, parents have been battling each other on how to handle it. Some say wiping down the PCB’s is enough, while others say the caulking needs to be removed.

The issue made headline news when actress Cindy Crawford pulled her kids out of school and held a press conference urging the school district to remove the PCB’s.

It appears her message was heard. In October, a federal judge in Los Angeles ordered the removal of PCBs from two Malibu schools by December 31, 2019.

The cost of its removal is also astronomical. Markey says it could cost from $25 billion dollars up to almost $52 billion dollars. And he says it could take up to 32 years to check all the schools for PCB contamination.

And even if substances like caulking are removed, PCB contamination may remain in window frames, brick, stucco, and other adjoining materials.

The Santa Monica School District has already spent millions of dollars on lawyers, environmental consultants and a public-relations campaign.

What does all this have to do with us real estate investors?

It’s important to be aware that there is a growing political movement against PCB’s that could potentially affect you if you own apartment buildings or commercial property that was constructed between 1950 and 1980.

The EPA says PCB’s do not appear to be an issue in single-family homes.

The EPA says that building owners shouldn’t panic however. The first step would be to test for any PCBs and the EPA has information on how to do that on their website.

One of the big culprits for PCB contamination is old caulking that can get dry and brittle. If you’ve seen old window caulking that looks dusty, and if the building was built or renovated during those 30 years that PCBs were being used, it’s very likely that that dust is “not” something you want your tenants or children to breath.

If you have confirmed the presence of PCBs in your building, there are things you can do to minimize exposure.

The EPA recommends that you limit any direct contact with contaminated caulking. And because old caulking can deteriorate more easily into dust, you should dust often.

But it says don’t sweep, use a wet mop or damp cloth. And remember to keep ventilation system air ducts clean. If you vacuum, use a machine with a high efficiency particulate air filter. You can also increase air circulation by opening windows or installing exhaust fans.

Removing this material entirely might be a better solution than trying to keep your environment free of toxic dust, but it could also be costly. And, it may not solve your problem without more extensive renovation.

These chemicals may seep into surrounding materials. So, removal of caulking may still leave dangerous PCBs behind in wooden window and door frames, brick, masonry, stucco, and other materials. You can also look for PCBs in material used to seal expansion joints and ceiling tiles. If you do choose to remove the caulking, be sure to protect yourself from any PCB exposure during the removal process.

The EPA also recommends the removal of any older fluorescent light fixtures as soon as possible. It says if ballasts are not leaking, the fixtures can be removed and disposed of with no special handling. If they are leaking, the light fixtures need to be treated as hazardous waste. The agency says it’s best not to wait because the sudden rupture of a ballast could pose a significant hazard to occupants of the building.

Caulking and fluorescent light ballasts are considered the primary sources of PCBs in older buildings and schools.

If you have concerns about PCB contamination, you can easily get a blood test.

This is an issue we’ll be hearing more about. It’s one that parents may want to check into as they enroll their kids into different schools and one that building owners may also want to investigate for health reasons, and to avoid any potential future lawsuits.

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