A nationwide survey of remodeling contractors by the National Association of the Remodeling Industry reveals a significant increase in the cost of a remodeling project due to current federal regulation. Regulation that according to survey results, is unwelcome to homeowners who do not have small children living in their home. And regulation that is certain to negatively impact scores of small remodeling businesses.
Many contractors and homeowners indicated in the recent surveys that the additional cost of EPA’s Lead Renovation, Repair and Painting (LRRP) rule as it currently stands deters homeowners’ use of lead-safe certified contractors. And yet, EPA is poised to add more layers to the existing regulation, which is only a year old.
The new regulation will add “lead clearance testing” to renovations in homes built prior to 1978. The testing will add even more costs to a project for homeowners, already resentful of the regulations and extra costs they carry. The new regulation is certain to impact the regulation-compliant small contracting business owners who are unable to stay within already tight remodeling budgets.
“Lead clearance testing only applies to contractors, not to homeowners,” said David Merrick, MCR, UDCR, President of Merrick Design and Build Inc. in Kensington, Maryland. “Once homeowners discover this loophole, they often choose to do the demolition or project work themselves to save on costs. Ultimately they risk lead exposure because homeowners are not trained in lead-safe work practices.”
NARI agrees that children and pregnant women must be protected from the dangers of lead poisoning. As an organization it has educated its members on lead safety long before regulation was enacted. However this latest information points to an alarming trend that 1) could cause more harm to vulnerable populations of children and pregnant women and 2) severely impede the economic recovery of small businesses in the remodeling sector.
The remodeling industry, the bright spot in the housing economy, is one made up predominantly of small businesses. Modest growth is predicted in years ahead, but the industry faces a new threat to that growth in looming regulations.
In an already delicate economy with consumer confidence and the U.S. economy in flux, homeowners may approach the scenario in several different ways, in order to save money:
1. Hire a non-compliant, less-skilled handyman or contractor to do the project
2. Do parts or all of the project themselves (turn DIY)
3. Reject doing the project altogether
Two of the three scenarios above would put children and pregnant women at risk for lead poisoning, and all three put the industry itself at risk, because the rising cost of hiring lead-certified remodelers is too high for homeowners. The consequence of any of these scenarios would be another downturn for an industry of predominantly small businesses still recovering from the last recession.
The most recent government census reports there are more than 652,000 remodeling businesses in the United States and nearly 85 percent (or 552,191) of those businesses are not registered as a certified firm with the EPA. Additionally, the 99,809 firms that are listed as certified renovator firms will have to go through re-training of the new compliance practices.
America’s housing, which continues to age, is in need of renovation and repair work as homeowners choose to stay put rather than move in an uncertain real estate market.
“Low incomes, unemployment, tight credit, costlier home remodeling, and larger liabilities in the industry are a recipe for disaster,” says Merrick. “We will have hazardous renovation work undertaken by under-skilled workers or homeowners because of regulations that should be reviewed and re-established with reasonable solutions.”