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REPLACEMENT HOUSING AT THE AUSTIN AVENUE RADIATION
SITE
#8100090
EXECUTIVE SUMMARY
Introduction
Superfund was established by the Comprehensive Environmental Response, Compensation, and Liability Act of 1980, which was reauthorized by Congress in 1986 and 1990. The purpose of the program is to protect public health and the environment from the release, or threat of release, of hazardous substances. This protection can range from "removal" actions to control emergency situations, to more permanent long-term "remedial" actions. The Austin Avenue Radiation Site underwent both removal and remedial actions.
The site consisted of 40 properties in six municipalities that were contaminated with radium and thorium, which are considered health hazards when inhaled or ingested. Under a removal action, 18 of the properties were decontaminated and restored at a cost of $24 million. The remaining 22 properties were addressed through the remedial program at a cost of $31 million. The remedial cleanup included demolition, sampling, excavation and disposal of the radiologically contaminated materials, temporary and permanent relocations of the homeowners, and reconstruction of the houses. Regarding the 22 properties, initially Region 3 had wanted to demolish most of the contaminated structures and permanently relocate the owners into replacement houses. However, due to public and political pressure, the Region allowed most of the owners the option to either relocate or to have new houses built on site. Ten of the owners chose to rebuild. Eight of the owners chose to permanently relocate. Four of the owners were not given a choice as to how their properties were to be remediated.
Objective
The purpose of this audit was to determine the reasonableness of the costs paid by EPA to build ten new houses at the Austin Avenue Radiation Site.
Results-in-Brief
At the Austin Avenue Radiation Site, Region 3 spent an average of $651,700 each to custom-build 10 houses (see Exhibit A for "Before" and "After" pictures). The appraised value of the old houses averaged only $147,000 each. The cost variance occurred because the Region built new houses, rather than relocate the owners, as has been historically the case. Also, the Region undertook the building of new houses without benefit of any guidance from EPA Headquarters. Adopting the position that EPA was obligated to replace "like for like," even though the original houses had been built decades earlier, resulted in cost becoming less of a factor. The lack of guidance, coupled with the demands made by some property owners and local government representatives, lengthened the process and increased costs.
We do not believe that EPA should be in the house-building business. Furthermore, EPA was not mandated to replicate every facet of an existing structure.
Recommendations
We recommend that the Agency establish a policy whereby instead of building new houses, EPA will give preference to other options that consider the fair market value of the properties. For example, EPA could give the owners: (a) the replacement value of their property, such as is done by the insurance industry; or, (b) the amount EPA would have paid to permanently relocate the owners under the Uniform Relocation Act. Either of these options would enable the owners to arrange for the rebuilding of new homes on their existing lots at a fair and reasonable cost without involving the government in the house-building business. We also recommend that the Agency develop a policy now that explicitly defines equivalent housing before this type of situation occurs again.
Agency Response to Draft Report
The Agency agreed with our recommendations and indicated that it will evaluate and define: (1) equivalent housing when Superfund activities impact residential properties; and (2) address the available options for providing equivalent housing in lieu of building new houses for impacted residents.
OIG Evaluation
EPA's response meets the intent of our recommendations. We will be available to review the policy as it is being developed, and provide input from our perspective.