Tom Neltner, National Director of Unleaded Kids, and Lindsay McCormick, Senior Manager, Safer Chemicals, and Roya Alkafaji, Manager, Healthy Communities, both of the Environmental Defense Fund
Note: This article offers additional perspective on a topic discussed at a January 2024 convening jointly organized by The Joyce Foundation and the Federal Reserve Bank of Chicago to identify key information and research needs that, if met, could help communities overcome economic and financial challenges to implementing lead service line replacement projects. A summary of the convening is available in a Chicago Fed Insights article.
Momentum is building to replace the estimated 9 million lead service lines (LSLs) that still bring water to properties nationwide. Eliminating the nation’s LSLs is a major—but important—undertaking to protect children and adults from the harmful effects of lead exposure. The Environmental Protection Agency (EPA) estimates that the long-term socioeconomic benefit will be 8 to 12 times the cost of replacement. To succeed, we need to develop effective strategies to address LSLs at rental properties. This is also a public health and equity imperative, as renters tend to be lower income, have children in the home, and disproportionately impacted by other sources of lead.
The Biden Administration set a goal of replacing all LSLs by 2032 and secured $15 billion in dedicated funding in the 2021 Infrastructure Investment and Jobs Act, more commonly known as the Bipartisan Infrastructure Law (BIL), to accelerate the effort. EPA has moved aggressively to distribute the funds to states and, in November 2023, proposed improvements to the Lead and Copper Rule (LCR) that would require public water systems to replace all LSLs.
As communities set their sights on eliminating LSLs, low participation rates by rental properties keeps bubbling up as a significant challenge. Several utilities participating in the October 2023 Lead Service Line Replacement Collaborative member meeting flagged the issue as a priority. They explained that landlords respond at significantly lower rates to invitations to have their LSLs replaced, even when the utility agreed to cover the full cost of the work, and residents in most communities who wanted to participate were not empowered to authorize the replacement. The problem is particularly difficult where the property owner is a hard-to-reach corporation or its property management firm lacks authority to act.
Utilities have incentives that tend to prioritize LSL replacements first in neighborhoods dominated by owner-occupied housing where cooperation is more straightforward and move to the end of the line those with significant numbers of rental property. Provisions in Congress’s BIL and EPA’s LCR seek to offset this incentive by linking funding and planning to broader public health and equity objectives. It is, therefore, better to confront the challenge now by developing effective strategies to engage rental properties. If successful, it will create project efficiencies that will reduce the overall cost of the project in the long run and better protect public health.
LSLs and Rental Property
The discussion of LSLs is typically focused on single-family homes due to their small diameter and limited water supply capacity. For these homes, roughly 80% of the pre-1960 housing is owner-occupied, according to an analysis by the authors of the 2021 American Housing Survey, leaving 20% rental properties.
In addition to single-family homes, the reality is that LSLs also serve multi-family housing and commercial operations such as small child care facilities, office buildings, and retail operations where a lead pipe is large enough to provide the customer with sufficient water to meet their needs. In these situations, rental property is expected to dominate.
The scope of the problem in larger rental units is unknown. We have not identified a rigorous study on the size of buildings historically served by LSLs. According to the 1950 Lead in Modern Plumbing book by the Lead Industries Association, lead pipes were uncommon greater than 2” in diameter, a size we expect would support multi-family housing of roughly up to 20 units. An Environmental Defense Fund analysis of utility reports submitted in 2019 to the Wisconsin Public Service Commission showed 99% of the state’s estimated 153,000 LSLs were 1” or less in diameter, a size we expect to serve housing of up to four units.
Residential Rental Property Must be a Public Health and Equity Priority
From a public health and equity perspective, there are important reasons to prioritize residential rental property:
- Renters are more likely to have infants and toddlers, who are more vulnerable to harm from lead exposure;
- Renters are more likely to have a lower household income, which is a predictor for higher lead exposure in the home; and
- For multi-family housing, replacing a single LSL can reduce lead exposure to multiple families without significant additional direct cost, effectively increasing the public health benefits from the investment.
Engaging Rental Property Upfront Reduces Utility’s Costs in the Long Run
Failing to engage rental properties can undermine the success of a program designed to replace all of a community’s LSLs by creating delays and inefficiencies. By prioritizing efforts to address rental properties, utilities can reduce their overall costs of the project in two specific ways:
- Improving efficiency and productivity of LSL replacement crews, especially where the work is done neighborhood-by-neighborhood. When a landlord and its renters agree to cooperate after the project has moved to the next block or neighborhood, the crew must go back to areas that it had largely completed. This ongoing set-up and clean-up of the equipment wastes time and resources, effectively increasing the cost.
- Streamlining efforts to more efficiently secure cooperation of both the landlord and the renter to conduct the work and reduce administrative burdens and potential project delays. With few exceptions, the landlord must approve and, in some cases, pay for the replacement because it alters the property. The renter must accommodate the disruption and post-replacement flushing and sampling.
Congress and EPA Implicitly Incentivize Residential Rental Property for LSL Replacement
In the BIL, Congress increased funding to State Revolving Fund (SRF) programs to assist “disadvantaged communities,” meaning the service area of a utility that meets a state’s affordability criteria, and prioritized those utilities for grants (known as principal forgiveness). Additionally, in its 2022 BIL implementation fact sheet, EPA makes clear that SRF programs should reach disadvantaged neighborhoods as a means to ensure large utilities that serve both wealthy and low-income neighborhoods have access to the LSL replacement funding they need. Therefore, prioritizing neighborhoods where rental property is more common is likely to increase the chances of securing funding through SRF.
Beyond BIL, the current LCR, released in 2020, also encourages LSL replacement in communities with significant residential rental property. The rule requires utilities to develop an LSL replacement plan by October 2024. As required by 40 C.F.R. § 141.84(c), the plan must have a prioritization strategy that includes “targeting of known lead service lines, lead service line replacement for disadvantaged consumers and populations most sensitive to the effects of lead.”
EPA’s 2023 proposed improvements to the LCR, which are expected to be finalized in October 2024, clarified and strengthened the incentive. The proposal modified the prioritization strategy to include “service line replacements for local communities, such as those disproportionately impacted by lead, and populations most sensitive to the effects of lead” as factors. EPA said the changes aimed “to improve public health protections in communities facing the greatest risks from lead in drinking water, particularly in areas facing cumulative environmental justice impacts.” These communities are those most likely to have a high proportion of residential rental property. The proposal also requires utilities to develop a communication strategy to inform renters about their LSL replacement plan and program.
Congress further encouraged a focus on residential rental property by engaging the U.S. Department of Housing and Urban Development (HUD) as the expert on the nation’s housing. In its July 2023 report for the Fiscal Year 2024 Appropriations Bill, the Senate Appropriations Committee said:
“The Committee also directs HUD to continue to coordinate with the EPA on: (1) visual inspection protocols, (2) inventories of lead service lines, and (3) identifying any cross-agency progress made by public water systems in eliminating lead service lines at HUD-assisted properties, which is a priority under the [BIL]. The Committee directs HUD to brief the House and Senate Committees on Appropriations within 120 days of enactment of this act on its data sharing needs related to lead service lines.”
This directive was incorporated by reference into H.R. 2882, Further Consolidated Appropriations Act which was signed by President Biden on March 23, 2024.
Empowering the Tenant—Newark’s Approach
In 2018, in response to its exceedances of the LCR’s Lead Action Level, the City of Newark committed to replace all of its LSLs over eight years through a voluntary program. Residents could sign up to have their LSLs replaced at a cost of $1,000. The response was lackluster.
A year later, the City secured a $120 million bond to cover the full cost of replacement and cut the timeframe for completion to three years. Unfortunately, still too few residents signed up. The City cited the challenge of reaching rental properties, which makes up 80% of the housing in Newark. In response, the Newark City Council passed an ordinance that made it mandatory for property owners to sign up for the program and allowed the City to enter a property to replace an LSL even if the owner did not sign up for the program. Through this mandate, the City achieved its goal—replacing 23,000 LSLs in less than three years.
While landlords expressed consternation at the mandate, the reality is that they were able to upgrade an aging LSL that had been in the ground for 50 to 100 years at no cost to them. Under normal circumstances, had the LSL failed, a landlord would have had to replace it out of their own pocket.
Newark’s ordinance became an example for the state of New Jersey when, in January 2020, Governor Murphy signed legislation that allows municipalities to adopt an ordinance to enter properties to replace LSLs without property owner permission, after notifying residents. New Jersey Future tracks this effort and let us know that the cities of Passaic, Clifton, Paterson and the Borough of Prospect Park adopted ordinances in 2022 with City of Trenton doing the same in April 2024.
Our Recommendations to Utilities Seeking to Increase Rental Participation
As demonstrated in Newark, a mandate to cooperate with LSL replacement to address what had become a high-profile crisis over lead in drinking water was extremely effective. Once the City showed that no-cost replacements and improved communications alone were insufficient to success, they didn’t receive any significant pushback on the mandate.
As other states and communities wrestle with the issue, they will find their own approach. For example, in March of 2024, the Indiana legislature unanimously passed a law establishing steps by which drinking water utilities can replace customer-owned portions of LSLs without the owner’s approval.
As a practical matter, LSL replacement must be viewed by both a landlord and a renter as a benefit worth the investment of their time and energy. If the property owner is expected to pay some or all of the cost to replace the LSL, the benefit must also overcome that investment as well.
Therefore, we offer recommendations to utilities and communities seeking to eliminate LSLs:
- Offer LSL replacements at no cost to residential landlords and renters. Cost can be a barrier for participation, especially for landlords with only a few residential properties or less access to capital. After considering the cost of making and managing the financial arrangements with each owner for low or zero-interest loans or grants, the utility may find it cost-effective to streamline the process by directly covering the cost of replacement.
- Make it easy for the public, especially renters, to determine whether a property is served by an LSL. Starting in October 2024, the LCR will require that utilities make their service line inventory publicly available and post online if the utility serves more than 50,000 people. In addition, the utilities must give customers and residents served by an LSL three notices explaining the health risk. Much more is required if the utility exceeds the lead action level. We encourage utilities to go beyond the minimum requirements and embrace online interactive maps as a communications tool. We recommend that utilities also enable online real estate listing services to incorporate the already publicly available information, so a new renter does not first learn about the LSL after moving in. We also support requirements that call for LSLs to be disclosed by landlords. These steps provide incentives to increase renter participation when the opportunity arises.
- Increase coordination with local networks of housing and small business owners. Landlords need to hear from multiple trusted sources so that they are more willing to participate. Those trusted sources are often associations in which they participate. Water utilities should engage such groups to help them understand that it is only a matter of when, not if, their members’ LSLs must be replaced. Further, working with these groups will enable the utility to better understand the landlords’ interests and strike the right balance of incentives.
- Proactively provide pitcher filters to all homes served by an LSL. Rather than wait until the LSL replacement is weeks away, consider giving all renters an NSF-53 certified filter, as Denver Water does, to reduce the risk of lead exposure until their LSLs are safely removed. Utilities should think of the filter as a powerful means to communicate through action—not just words—that the utility wants to go beyond the minimum to empower residents. In addition, providing replacement filters serves as an ongoing means to engage residents that will pay off when they have an opportunity to stop using the filters after the LSL is replaced and follow up water samples give an all-clear result.
- Pilot replacements in neighborhoods dominated by rental housing. Utilities should resist the temptation to focus on owner-occupied housing and consequentially move multi-family housing to the end of the line. A focused effort will give the utility a greater opportunity to learn by doing and improve their effectiveness as well as meet the community’s public health and equity objectives.
Conclusion
If we are to achieve the goal of eliminating LSLs, we need to figure out now how best to engage landlords and renters in the process. We suspect that, ultimately, it will take a mandate like New Jersey’s and Indiana’s to get the last of the LSLs replaced. No matter what, decision-makers, especially elected leaders, will demand evidence landlords and renters have been engaged and a requirement is necessary. By starting with our recommendations and learning from peers, hopefully, those affected by a mandate will be the exception.