An Unwelcome Intruder
A guide to what environmental professionals should know about vapor intrusion and its impact on real property transactions
- By Dianne Crocker
- Oct 01, 2007
Vapor intrusion. If you haven’t yet
heard the term, you soon will: A
growing environmental concern
that has made national headlines, this
indoor air quality issue develops when
rapidly evaporating chemicals from polluted
soil or groundwater make their
way to the indoor air of overlying buildings,
similar to the way radon enters
homes. With its ability to affect human
health—vapor intrusion can cause a
wide range of symptoms including eye
irritation, respiratory problems,
headache, nausea, and in extreme cases,
cancer—plus its potential to lower property
values and expose building owners
to liability, it’s no wonder this pressing
problem is being given considerable
attention by the environmental, legal
and regulatory communities. Although
there is still a great deal of uncertainty
about vapor intrusion, and how to measure
its effects on human health, recent
case law proves that vapor intrusion is a
real business and health risk with widespread
implications.
Sleuthing for
Suspect Sites
Sites that are most likely to be
susceptible to vapor intrusion issues
are those associated with operations
involving volatile organic compounds
(VOCs) and semi-VOCs. According to
Blayne Hartman, Ph.D., a partner with
H&P Mobile Geochemistry, common
VOC sites include those with underground
storage tanks, piping and
refueling operations, and in colder
climates, homes with internal oil
tanks. Dry cleaners, engine and parts
cleaning areas with vapor degreasers
such as TCE and TCA, and any circuit
board manufacturer are also suspect.
Sites associated with the past use of
semi-VOCs (e.g., naphthalene, polychlorinated
biphenyls and pesticides),
such as former manufactured gas
plant sites and those with electrical
power facilities, are particularly problematic,
according to Hartman,
because risk-based screening levels
are typically very low. |
As such, environmental professionals,
particularly those involved in property
assessments and indoor air quality studies,
should familiarize themselves with
the issues surrounding this pressing
problem, along with the new ASTM (formerly
known as the American Society
for Testing and Materials) vapor intrusion
standard anticipated to be published
by the end of the year.
Background and Stakeholder Liability
A relatively new concern that went
unrecognized until the 1990s when the
Massachusetts Department of Environmental
Protection began to focus on
the issue, vapor intrusion today is a
widespread problem, potentially affecting
thousands of sites nationwide.
What’s more, the issue not only affects
building occupants, who can become
sick, it can impact every stakeholder in
the real estate deal. Particularly, site
owners and investors can find themselves
stuck with a property that has a
vapor intrusion problem left undiscovered
prior to purchase. In turn, vapor
intrusion can lead to liability, property
value losses and stigma damages.
Lenders, too, are not immune from the
impact, since property, likely used as
collateral, can become devalued or the
borrower’s ability to pay back the loan
compromised.
Despite the recent widespread scientific
and regulatory attention given to
vapor intrusion, confusion continues to
surround the issue. Major questions
include how to test for vapor intrusion,
what limits are acceptable, and how
best to tackle the problem. Yet with so
much at stake for building occupants
and property owners, the issue cannot
be shelved until it is better understood.
“It’s an issue that is continually growing,”
says Michael Mooradian, REA, an
environmental professional with PSI
Inc. “Today there are concerns about
sick buildings, and people are more
aware that subsurface contaminants
may have a human impact beyond
direct skin contact or ingestion.”
“Recent trends indicate that vapor
intrusion is becoming more and more of
an issue for lenders and attorneys,” says
John Burkart, an environmental professional
with LandAmerica. “Verification
of the issue is warranted by lenders,
especially if the property is residential.
In my experience, vapor intrusion sampling
to secure loans has increased 10
percent in the past year alone.”
Thomas Warn, an environmental
professional with Terracon Consultants,
Inc., says that vapor intrusion could
have a huge impact on risk-based closures,
for example, the “cap it” or “pave
it” method of remediation on redevelopment
sites. “Many clients have developed
risk tolerance for groundwater
issues originating off-site in urban areas
where groundwater is not a potable
resource. Since groundwater to indoor
air is a potential pathway for vapor
intrusion, this may cause people to
rethink their risk tolerance regarding
impacted groundwater, which will likely
cause changes in redevelopment strategies
in the urban cores,” he says.
Current Guidelines Inconsistent
In an attempt to address the growing
concern over vapor intrusion, in 2001
the U.S. Environmental Protection
Agency issued its Draft Guidance for Evaluating
the Vapor Intrusion to Indoor Air
Pathway from Groundwater and Soils. The
agency says the federal guidance, which
was updated in 2002, will be revised as
appropriate when the state-of-the-science
improves.
Meanwhile, dozens of states have
responded to the issue on the legislative
and regulatory front, with several publishing
their own, often conflicting,
vapor intrusion guidelines.
Further complicating the issue is the
fact that the standard environmental
commercial property investigation—the
Phase I environmental site assessment—
does not typically include a
vapor intrusion assessment, mainly due
to a conflict in the current industry
standard. On the one hand, it can be
argued that vapor intrusion should be
included in ASTM’s E 1527-05 Phase I
standard under the definition of recognized
environmental condition (i.e.,
“…release of any hazardous substances
or petroleum products…into structures
on the property…”). On the other hand,
one could argue that the standard
specifically excludes vapor intrusion
under Section 12, which lists indoor air
quality as a non-scope consideration.
ASTM’s Impending
Vapor Intrusion Standard
Because the environmental industry
today relies on a site assessment standard
with a conflicting position, and
because vapor intrusion is already
impacting commercial real estate, it was
clear that the industry needed a consistent
approach to guide vapor intrusion
assessments. In October 2005, ASTM
International approved a Vapor Intrusion
Task Group (E50.02.06) charged
with developing a national standard.
The committee’s goal is that its vapor
intrusion procedure be used “reasonably
and early on” in property transactions,
so as not to slow down the real
estate deal. Committee members,
including regulators, environmental
consultants, lawyers, lenders, property
owners, developers and investors, are
working closely with EPA, states, lender
professional organizations such as the
Environmental Bankers Association and
the Mortgage Bankers Association, and
industry groups such as the American
Petroleum Institute, Halogenated Solvents
Industry Association and the
Aerospace Industries Association. Committee
Chairman Anthony Buonicore,
PE, BCEE, expects that the standard will
be approved in the fall and ASTM will
publish it by year-end.
Environmental professionals see it as
a welcome addition.
“By establishing uniform guidance as
to how an assessment is performed and
evaluated, the document will have a
positive impact on both consultants and
clients,” predicts Mooradian.
Burkart agrees. “ASTM’s efforts will
bring to light potential vapor migration
into buildings constructed over or near
impacted sites. The standard will
increase awareness of a vapor problem
and assist lenders in evaluating potential
risk concerns.”
Warn predicts that initially the
industry will be confused about how
best to comply with the standard, but
in the end it will be widely adopted.
“The consulting community will need
to educate clients on the best options
available to manage business risks during
due diligence and site redevelopment
projects. Eventually, I believe the
standard will provide substantial guidance
that will allow for more consistency
in how potential vapor intrusion
issues are assessed.”
Tackling This Emerging Challenge
When it’s released, the new ASTM standard
will provide environmental professionals
with criteria to determine when vapor intrusion needs to be considered
and guidance on how to go about tackling
the issue. Until then, any site with
known or suspected contamination
should be considered as a potential source
of vapor intrusion, which, like other nonscope
Phase I issues such as mold and
lead-based paint, can materially impact
the value of a property and lead to legal
headaches for property owners.
To represent an environmental concern,
vapor intrusion requires a source,
an inhabited building, and a pathway
from the source to the building occupants.
Contaminants may exist in the
soil, groundwater or as vapor clouds;
overlying or nearby structures may be at
risk. Risk level, the toxicity of the compounds
in question and the exposure
factors such as time, rates and ventilation
are key factors in determining risk.
“As consultants, we are recommending a
vapor intrusion assessment when certain
conditions exist,” says Mooradian.
“If VOCs are detected in the subsurface
as part of a Phase I or II environmental
site assessment, we often recommend a
soil-gas survey to provide us with information
on the magnitude and extent of
these compounds.”
When assessing the problem, environmental
professionals (EPs) should know
that sites in certain databases raise red
flags. These include Superfund (National
Priority List) sites, Comprehensive, Environmental
Response, Compensation and
Liability Information System (CERCLIS),
treatment, storage and disposal sites in
Corrective Action (CORRACTS), state
hazardous waste sites, leaking underground
storage tank sites, landfill sites,
current and former dry cleaning facilities,
former manufactured gas plant sites
and current and former gas stations.
According to Buonicore, even sites with
“no further action letters” from state
agencies may present a vapor intrusion
problem.
“New York state recently
reopened more than 400 formerly
closed sites due to suspected vapor intrusion
contamination,” he says. “Furthermore,
an informal survey of state dry
cleaner trust fund programs revealed
that only two state programs take the
vapor intrusion pathway into account
when ranking sites. Most focus on
groundwater contaminant levels and
whether groundwater is used for drinking
water purposes. Buyers and lenders
can no longer rely on the determination
of these state programs, i.e., the site
ranking, when evaluating risks posed by
these sites.”
Prior to tackling the vapor intrusion
issue, EPs should first check state
requirements, and if guidance has not
been established, consider following
EPA’s 2002 draft guidance document.
“Here in California, there is an advisory
on active soil-gas investigations where
protocols have been established to
ensure reproducibility of the data and
consistent testing methodologies. The
use of these protocols in conjunction
with the California EPA guidance entitled
Use of California Human Health
Screening Levels (CHHSLs) in Evaluation of
Contaminated Properties provides not only
a methodology for testing for subsurface
vapors but also guidance concentrations
based on health risk,” says Mooradian. “Because we work across the United
States, we frequently run into the problem
that guidance has not been established
in the state in which we are working,”
Mooradian continues. “In those
instances, we take a conservative look,
taking into account the local hydrogeology
and proposed land use. In the West,
we often follow California guidance due
to the lengthy history of this type of
testing in the state and the generally
conservative nature of their guidance,”
he says.
Post-ASTM standard, Mooradian will
still recommend following state requirements.
“In states where guidance is
already in place, those guidelines will
probably be more extensive and take
precedence, considering that most transactions
are concerned about the likely
possibility of regulatory intervention on
a property. In jurisdictions where there
is no guidance, ASTM’s standard should
be welcomed because it provides a consistent
approach to a vapor intrusion
assessment.”
With all the publicity surrounding
vapor intrusion, it is difficult to imagine
that a lender or property purchaser
would agree to forego a vapor intrusion
assessment if asked.
“As an environmental
professional,” Buonicore advises,
“speak with your clients if you believe
that vapor intrusion can potentially
impact the real estate transaction, particularly
if the property is located in a
state with vapor intrusion regulations or
a vapor intrusion policy. In the final
analysis, clients depend on their environmental
consultants to advise them
on any environmental issue that can
impact property value.”
Buonicore believes it would be difficult
to completely ignore the issue, especially
in states with active and well-publicized
vapor intrusion programs.
This article originally appeared in the 10/01/2007 issue of Environmental Protection.
About the Author
Dianne Crocker is senior economist and managing director of EDR's Market Research Group. With 15 years of experience in the environmental industry, Crocker provides strategic data and analysis on environmental due diligence trends to environmental consultants, lenders, corporations, and other parties involved in commercial real estate transactions.