Housing, We Have a Problem!

Delays within state bureaucracies are increasing costs and threatening the much-needed infill housing lift-off.

Summary: Since the turn of the 21st century, California cities and developers have successfully and safely reused urban sites for housing. For sites potentially compromised by vapor intrusion (VI) – where contaminants in the subsurface can volatilize and enter buildings through cracks on the floor, joints, walls and pipes – California regulatory agencies typically applied a 0.001 attenuation factor (AF) to estimate the concentration of vapors entering proposed residential sites. In 2015, the U.S. EPA proposed a guidance AF of 0.03. There has been little discussion on the cost impact of the 0.03 AF to VI response costs, which currently are the responsibilities of cities and developers, though it is expected that they will increase substantially. State agencies should resolve their differences expeditiously, look beyond their silos, and realize the unintended impacts of this new policy.
With an estimated deficit of between 3 – 4 million units, California cities and developers are tasked with building enough housing to support a growing economy and curtail a worsening affordability gap and homelessness crisis.

Ideally, these new homes will be built near jobs to avoid congestion, with all its negative effects on productivity, public safety and the environment. In recent years, the state legislature has passed laws to facilitate infill housing, through bills like SB32, SB35, AB2345 and many others. Likewise, the state has invested heavily in infill and transit-oriented development. Yet, despite all these efforts, an obscure “factor” and bureaucratic stalemate within the California Environmental Protection Agency (CalEPA) threaten to turn a much-needed housing boom into dust. Enter the attenuation factor, or AF. And the need for CalEPA to resolve this issue quickly.

What the AF?
To understand AF, or attenuation factor, one needs to understand vapor intrusion (VI) and its impact on infill housing development.

Infill housing usually occurs on land in existing urban areas. Many of these sites had previous uses, including gasoline stations, dry cleaners, parking lots, warehouses, and other industrial or commercial uses. A high percentage of these compromised sites are now obsolete, sitting idly, incompatible with the new uses growing beside them. Such sites typically have been affected by releases of hazardous substances which need to be removed, encapsulated and/or treated before they can be safely used for much-needed housing.

Since the turn of the 21st century, California cities and developers have successfully and safely reused such sites for housing. For sites potentially compromised by VI – where contaminants in the subsurface can volatilize and enter buildings through cracks on the floor, joints, walls and pipes – California regulatory agencies typically applied a 0.001 AF for proposed residential sites. The AF is akin to a discount factor that estimates the reduced concentration of vapor entering buildings and is useful to determine the cleanup measures needed to safely reuse a site, which could be comprised of a combination of:

1. Soil or groundwater removal or treatment to reduce concentration of toxic substances to levels safe for the new use.
2. Passive engineering controls such as vapor barriers and perforated pipes with wind-driven turbines to reduce pathways of residual toxics to the building occupants.
3. Institutional controls, such as deed restrictions and notices, to advise future generations on any restricted uses.
4. Active engineering controls, such as vapor extraction blowers for more aggressive measures.

These methods have facilitated infill reuse that transform blighted neighborhoods into vibrant communities, and have been used without any documented adverse health or environmental conditions for two decades.

So What’s the Problem?
In 2015, the US Environmental Protection Agency proposed a guidance AF of 0.03 to screen for sites which may warrant additional investigation. This AF was not intended to serve as a cleanup standard, and is 30 times more sensitive than the AF previously used in California – a higher value AF represents a higher estimated percentage of contaminants migrating from the subsurface into buildings. The 0.03 AF was derived from analysis of sites mostly on the East Coast and Midwest. The subsequent application of the proposed AF to California sites greatly increased the investigation and cleanup measures, and the accompanying costs, that have historically been safely applied in the state.
Therein lie the problems, including:

1. The 0.03 AF is based on building practices, climate and hydrogeologic conditions very different to those in California, and arguably is inapplicable to California.
2. Since February 2020, CalEPA, the State Water Resources Board, the Department of Toxic Substances Control and private sector scientists and engineers are collecting, calculating and reviewing California-specific data to determine a locally-applicable AF, but have not resolved this issue.
3. While there has been no consensus on the appropriateness of the 0.03 AF for use in California, many local agencies, including county health offices and fire departments, have adopted the 0.03 AF as a default cleanup objective.
4. Because of the more conservative threshold, applying the 0.03 AF triggers more sampling and analysis requirements for more sites, which are iterative and has greatly delayed and increased costs for site assessment, cleanup and long-term engineering controls, for which there is no new funding, and which the market cannot bear.

Articles by Gorsen & Ault, Torbit & Gandhi and others explain the legal and technical issues in more detail. The potential impacts on infill development are dire:

1. Delays and costs threaten all infill, but especially housing development in the state. This drives new home construction into sprawling greenfield communities, which greatly increases freeway construction and maintenance costs, congestion, poor air and water quality, and increased wildfire and flood threats. These effects are all antithetical to the state’s response to climate change and an array of recent land use, transportation and housing legislation and funding initiatives. Inducing sprawl will make it nearly impossible for California to meet GHG reductions under the landmark AB32.
2. Abandoning infill will perpetuate urban blight, increase housing costs and homelessness, disproportionately impacting low-income communities of color, and counter to the goals of SB1000. California already has the most expensive infill housing development costs in the world, and this further exacerbates the situation.
3. Recent case studies from sites affected by this situation can be found here.

There has been little discussion on the cost impact of the 0.03 AF to VI response costs, which currently are the responsibilities of cities and developers. The estimated increased capital expenditure has been estimated to be between $10-14 per square foot, and ongoing operating and maintenance expense is $2M per acre over a 30-year period, which amounts to trillions of dollars for the millions of housing units on infill sites potentially affected by VI.

Next Steps?

There are no known measurable benefits to the application of the 0.03 AF to California. Yet the impacts of premature use by some regulatory offices have real, calculable and detrimental impacts and costs in higher capital and operational expenses, sites eliminated from development consideration, and consequences of sprawl development. It would behoove the state agencies to resolve their differences expeditiously, look beyond their silos, and realize the unintended environmental, economic and equity impacts. Depending on the outcome, cities and developers should allocate additional time and expense for site assessment, cleanup and O&M, and hope that the state provides additional financial assistance for infill projects.