1 Comments of the National Apartment Association and The Apartment Association of Pennsylvania At the Environmental Protection Agency Public Meeting

June 26, 2013 Lead: RRP Program for Public and Commercial Buildings

EPA

- HQ

- OPPT

- 2010

- 0173

Thank you for t his time to discuss the concerns of the members of the National Apartment Association regarding EPA’s proposed rulemaking for renovation, repair and painting activities (RRP) on and in public and commercial buildings. My name is Christine Young

- Gertz. I am the Government Affairs Director for the Apartment Association of Pennsylvania, which is an affiliate of the National Apartment Association (NAA). NAA is a federation of 170 state and local apartment associations comprised of more than 60,000 members, rep resenting more than 6.6 million apartment homes throughout the United States and Canada. Our members engage in all aspects of the apartment industry, including ownership, development, management and finance. NAA members are apartment industry leaders who provide the quality rental housing that is vital to every community. We stress professionalism and industry advancement through education and compliance with all pertinent rules and regulations

. NAA members know delivering a good product

- quality rental ho using

- is possible only by running their businesses according to the highest operational and service standards. That includes providing safe housing and a hazard free environment for their residents. Lead exposure to children has been dramatically re duce d through a combination
of responsible government intervention and industry cooperation. We’ve elimin ated lead in gasoline, plumbing, food cans, children’s toys, household paint, and from use in man y manufacturing processes. NAA’s longstanding commitment to educating our members about lead paint regulations pre

- dates the RRP rules that took effect in 2010. Several years ago we developed extensive training for workers in lead safe practices, and education to meet EPA certification requirements. We are pro ud of our enduring partnership with EPA and will continue our efforts to raise awareness about lead paint hazards. Going forward, NAA will continue to be a part of the solution.2 Many NAA members throughout the country have a significant number of mixed

use properties, with both residential and commercial space. Therefore the EPA proposal to address renovations in public and commercial buildings by expanding the RRP rules directly affects our members.

EPA is required to first determine whether RRP ac tivities in public and commercial buildings create lead based paint hazards. According to their settlement agreement in several lawsuits, the EPA must either sign a proposed rule covering RRP activities in public and commercial buildings by July 1, 2015, o r determine that those activities do not create lead based paint hazards. 77 Fed. Reg. 76997 (December 31, 2012). Today most reasonable property managers would certainly conclude the latter to be the case, based on their experiences with the prevalent ind ustry practices for renovation repair and painting in commercial buildings. OSHA regulations are already in place to guide renovation activities in these buildings. And a study of RRP activities, such as contemplated by the EPA’s mandate from Congress, in my opinion, will most likely support the fact that property owners and managers follow the OSHA rules

. But my opinion aside, the EPA must start from the beginning, and devote the necessary time and resources to conduct such a study. I appreciate the EP A’s efforts to gather information from pertinent stakeholders, and th is important i nformation will surely point them in the right direction. But a well crafted empirical study to investigate the current presence of lead paint in commercial buildings, the n ature of the practices used to renovate and repair commercial buildings, and the vast, diverse uses and occupancies of
the country’s commercial properties is the kind of fact based objective examination congress contemplated and mandated as the starting po int in any effort to develop regulations.
Commercial is not the same as residential

. That seems rather obvious when simply stated. But it is a crucial fact. Any regulation contemplated for commercial
structures must be fine

- tuned for commercial structures

. Notions about residential settings simply do not apply to commercial. Their size, use, occupancies and renovation work practices are vastly different. EPA must recognize those differences and collect pertinent data before moving forward with RRP rules fo r commercial buildings.3 Commercial in it self is not a generic term. It includes box stores, school buildings,
hea th care facilities, shopping malls, meeting halls, convention centers, churches and other religious buildings, industrial buildings, warehouse s, the list is nearly endless. And with that nearly endless variety of building is a nearly endless variety and number of renovation, repair and painting activities that most assuredly occur routinely and frequently. According to the Commercial Building E nergy Consumption Summary from the Energy Information Administration, there are nearly 4.9 million commercial buildings in the United States, comprising more almost 72 billion square feet of floorspace. Any new RRP rules for commercial buildings must accou nt for all of it. One size of regulations will simply not fit all. And we must remember child occupied facilities are already covered under current residential rules. So commercial buildings that house child
care facilities , for example, churches, schools, office buildings, recreation centers and the like are already covered.
Admitt edly, EPA has a herculean task before them, but you must tailor future proposals for RRP regulations in commercial buildings to the facts.
The EPA must start with reliable and valid information about commercial buildings and limit any new regulations so they do not overlap existing rules and industry practices. The EPA must obtain reliable and valid facts about renovation and repair activities in public and commercial buildings

. EPA was directed by Congress to study this issue , and must not simply default to studies that were performed in older residential housing that have no bearing on public or commercial building settings. Before proceeding with regulations, the EPA must f irst see if there is a relationship
between RRP activities in public and commercial buildings and the creation of lead
hazards.
There are important differences in maintenance activities between single family structures and public and commercial buildings

. There are existing regulatory programs at the local, state and federal level s that guide renovation work to protect the general
environment and worker health.
EPA must also account for the huge diversity among the building types that
would be covered by this potential proposed rule. EPA must give particularized consideration to each type of building in making its assessment.4 EPA has indicated that it may use the definition of commercial building that is
contained in the asbestos rule , which includes r esidential buildings with 10 or more units.
Over fourteen million apartments , or roughly 73% of all apartments in the US are located in buildings that contain 10 or more apartments. 53% of those apartments were built before 1980 and are theref ore already subject to highly detailed regulations regarding the potential presence of lead based paint. Over 6.5 million of the apartments in 10+ unit buildings were constructed after 19 80

. For EPA to consider i nclud ing those
six and a half million post 1978 constructed apartments in a new lead based paint regulatory program without first verifying information regarding the lead status of those properties strains credulity

. I ncluding post 1978 apartment buildings in RRP rules intended to prevent
expos ure to lead hazards with no basis for doing so is at odds with HUD’s survey data
that has identified a steep decline in the presence of lead based paint in housing built after
1960 . HUD relied on this date as a cut off mark for establishing a tiered appro ac h to addressing lead in federally

- assisted housing. Moreover, 1978 is the year that the Consumer Product Safety Commission banned the sale of leaded paint for use in
residential structures. It makes no sense to include post 1978 commercial buildings in expanded RRP rules without clear objective evidence that a lead hazard exists in these buildings. Any new rule predicated along these lines will have a significant negative impact
on the cost of rental housing and exacerbate the current shortage of saf e, affordable and accessible housing without likely addressing lead from other sources (beyond paint) that are present in the general environment. Any new rule must therefore be as narrowly crafted as possible, to address any problem uncovered by proper in quiry without overreaching and causing more harm than good.

The use of lead

- based paint has been dramatically limited since 1978, and EPA must consider industry practices in commercial buildings that have further reduced the chances of exposure to lead hazards. EPA has acknowledge d the prev a l e nce of lead

based paint in commercial and public buildings is an important factor in determining whether RRP activities create a hazard. 75 Fed. Reg. 24858 (May 6, 2010). EPA must5

also consider how likely it is that today’s commercial buildings have lead

- base d paint hazards. Office and retail settings are renovated very frequently and are therefore perhaps less likely to have lead

- based paint, even if the building was built before 1978. Part of the work ahead is to g ather information on the likelihood of exposure to lead paint or the presence of lead paint in pre

- 1978 buildings that have undergone repeated renovation through the years. Commercial tenants commonly sign leases with “build out” provisions. That is, the tenant is responsible for renovation costs. Retail establishments especially are known to renovate their leased spaces at the start of the tenancy and frequently throughout the tenancy. It is an established practice geared to business growth. The need

to c ollect data on the frequency of renovations conducted in commercial buildings since 1978 has not been seen as necessary until now. EPA must objectively collect data on this important factor of commercial rental practices. Reliable data about the assuredly huge number of renovation, repair and painting activities that occur daily in commercial buildings is sorely needed. Along with the frequency of renovations, EPA must gather reliable data on the practices in commercial buildings when renovations, repairs and painting are performed. For example, businesses typically remodel or renovate using practices that include cordoning off the area to the public

– because of liability , OSHA requirements, local ordinances, or other considerations. The workers involved in the project are usually the only ones present. RRP rules to reduce lead hazard exposure, if needed at all, would clearly be different than those needed for projects undertaken in occupied residential buildings.

Additional costs for RRP rules have a di rect and significant impact on any building’s net operating income (NOI)

. A property’s o perating expenses are subtracted
from the gross income to arrive at the NOI

– the measure of its ability to produce income

. Expenses include management, payroll, main tenance and janitorial, supplies, legal, accounting, insurance, supplies, utilities, and all other expenses. It is a gauge of a businesses performance and has a direct bearing on the property’s value, which in turn has a bearing on the owner’s ability to raise capital. Improvements, expansion, the very
health of the business are therefore tied to its net operating income. The regulatory6

requirements the property faces can have a great effect on its NOI. Costs for complying for RRP as well as other regula tions quickly add up. The cost to test a property for the presence of lead

- based paint is considerable, to say the leas t. A test for a typical apartment property, both interior and exterior, is about 20,000 dollars. EPA’s study of
the need for additional RRP rules for commercial buildings must include a hard look at the costs it will mean to commercial building enterprises. Currently anecdotal estimates of the added costs for RRP compliance when performing renovations or repairs in multi

- family residentia l buildings , including work practices, notifications and record keeping requirements, and worker certification, can be
as much as 40%. RRP activities include a massive variety of undertakings, from a
minimal re

- painting to more significant building chang es. Staff training, certification, record keeping and a host of administrative expenses must be factored in for every kind or RRP activity, no matter how big or small the job. A study of the costs must therefore be all encompassing. Before any additional R RP rules are contemplated, EPA must conduct a reliable study among the various commercial building owners and operators to verify the costs associated with compliance. Even if RRP costs are borne by the commercial tenant, and not the owner, the
costs add to the burdens of the one who performs the RRP activity . That will in turn influence how much rent the tenant can pay, or the type of tenant the owner can attract. The health of the commercial property is in any case directly affected. These costs must
be considered in tandem with any need further study might establish for RRP rules in commercial buildings. The costs must be weighed against the benefits.

In conclusion: In contemplating applying RRP rules to commercial and public buildings,
EPA is so far s imply guessing there is a problem, and they’re guessing at a possible
solution to fit the would

- be problem. They must first do their homework, and then tightly tailor their regulations to fit the actual problem, if one exists. We look forward to
continued discussions to clarify the problems and fine tune the solutions. Thank you again for your time.