One of the failures in my life that I sometimes fret over is that I’ve never owned my house or apartment. My parents rented all through my upbringing, and only bought a house after they retired. For my part, my first wife spent like a maniac; I got divorced, which left me thoroughly broke; then the price of real estate skyrocketed, such that it would take me 10 years to assemble a down payment, and would then have to spend the next 30 years turning what was left after taxes to the bank. Basically, I missed my shot.
Since 2003, I’ve rented an apartment in Carroll Gardens, near the Gowanus Canal. A couple of times, the owners of the building contemplated turning it into a co-op, but the plans were never completed. It would still have been preposterously expensive to buy the apartment, but I would have been interested.
But now I’m relieved that it never happened: I dodged a bullet. Last week, the federal Environmental Protection Administration declared the Gowanus Canal a toxic Superfund site.
It’s not as if the canal, and the surrounding area, was a secret. It’s common knowledge that the industries that used to be located along the canal left all sorts of toxic waste on the site. But the city, working with private developers, was working on it. Some years ago, the city repaired the flushing tunnel that kept water flowing through the canal, cleaning up the water, and private developers were starting to clean up the land in anticipation of new construction.
But now that’s all over. The Superfund designation means that lenders won’t be willing to provide mortgages. So the developers have dropped the place like a hot rock. The city had plans to further improve the canal; those are dropped, as well.
Now the Feds are going to chase after everyone who owned land in the area for the last 150 years and sue them for the money to clean up the place. They’ll draw up the plans, hire the contractors, and clean it up. Note that, despite the name, a Superfund site isn’t cleaned up with taxpayer money. It’s whatever the EPA can sue from the former owners.
The EPA estimates the process will take 10-12 years, which seems overly optimistic. They’ve already indicated it will take 2-4 years just to draw up plans for the cleanup.
So if I had bought my apartment, its market value would have dropped at least 25%. Since it’s within 3000′ of the canal, I would have to declare the Superfund designation when selling the apartment, and the buyer’s bank would take that into consideration when determining whether to grant a mortgage.
Now note that the site itself hasn’t changed from two weeks ago. But since the Feds now say it’s toxic–so thoroughly toxic that the Feds must manage the cleanup–we have to take their word for it.