Promoting Radon Testing, Disclosure, and Remediation: Protecting Public Health Through the Home Mortgage Market

Paul A. Locke

Editors' Summary: Radon exposure in the home poses one of the greatest cancer risks of any environmental pollutant. However, responses by homeowners to the radon threat have been complacent. In this Article, the author discusses the reasons for this complacency and describes current efforts to educate the public about radon. The author concludes that existing efforts are inadequate and recommends a two-part national strategy that makes radon testing and disclosure an integral part of home sales.

Mr. Locke is a Senior Attorney with the Environmental Law Institute and Director of the Institute's Center for Public Health and Law. His areas of research include indoor air issues, medical waste, and hazardous waste. He is a graduate of Vanderbilt University School of Law and Yale University School of Medicine, Department of Epidemiology and Public Health. The author would like to thank Philip Warburg, Andrew Moyad, and Denise Antolini, his past and present colleagues at the Institute, for their assistance in analyzing the issues and developing the theories presented in this Article.

[20 ELR 10475]

Radon is a quiet, deadly villain. It kills its victims gradually, after years of exposure in places where they think they are safest: at home, at school, and in other tightly constructed buildings. The very act of breathing draws radon into the body.

Because almost all radon occurs naturally, it presents a special environmental challenge. The usual rules of thumb, like "polluter pays," do not fit well. Despite efforts to educate homeowners and others about radon's dangers and how to cope with them, Americans' response so far has been spotty.

This Article first discusses the characteristics of radon and the psychological, social, and economic principles that motivate people to test for radon and to take action to remove radon contamination from their homes. It next examines the effectiveness of general radon information and awareness campaigns, concluding they are not effective. It then proposes an innovative, national radon strategy based on home sale transactions.

Characteristics of Radon

Radon is a colorless, odorless, radioactive gas¹ emitted from naturally decaying uranium in the earth's crust.² When discharged into the atmosphere, it dissipates rapidly and poses little health threat.³ Under certain conditions, however, it seeps into buildings and accumulates to potentially dangerous levels.⁴ The Environmental Protection Agency (EPA), which estimates that as many as 20,000 people may die from lung cancer each year as a result of long-term radon exposure,⁵ has ranked indoor radon as the number one "environmental problem area" based on population cancer risk.⁶

[20 ELR 10476]

Radon in Homes

Although radon was discovered in the early 1900s and has been linked to lung cancer since the 1940s, only recently has it become a concern of most homeowners.⁷ In 1985, extremely high levels of radon were discovered in homes in New Jersey and Pennsylvania along a geological formation known as the Reading Prong.⁸ Since then, EPA and other federal and state agencies have conducted extensive radon testing. Today, radon problems have been identified in almost every state, and radon-contaminated homes are a national problem.⁹ EPA recommends that all homes be tested for radon.¹⁰ To verify its studies and findings, EPA asked the National Academy of Sciences to evaluate radon-related health data. The Academy confirmed EPA's risk estimates. It concluded that radon poses a "real and substantial" lifetime risk of lung cancer in some homes and that reducing in-home radon will lower the risk of radon-related lung cancer, just as quitting smoking lowers the risk of smoking-related lung cancer.¹¹

Federal Radon Activities

Because survey results, state investigations, and the Academy report confirmed radon's potential long-term life-threatening effects, EPA created the Radon Action Program to develop and distribute radon-related information and expertise.¹² The Agency's program consists of four elements: (1) problem assessment (to determine radon distribution, levels, and health effects); (2) mitigation and prevention (to develop methods for reducing radon in existing structures and to establish radon standards for new construction); (3) capability development (to establish the capacity to diagnose and remedy radon problems in homes); and (4) public information (to provide information to the public about radon risks and radon mitigation methods).¹³

Congress' concern about radon resulted in the enactment of two major pieces of legislation that include provisions for studying radon, testing radon-related equipment, certifying radon-related equipment and services, and providing states with assistance to establish radon-related programs.¹⁴ Both laws focus on providing information to the public, fostering the development of state programs, and building capacity for radon-related industries. Neither law empowers EPA to regulate radon in homes, nor provides a basis for establishing a uniform national radon program. Several states, however, have established comprehensive radon programs.¹⁵ The Agency's radon program and congressional action are intended to provide general and technical information to homeowners to enable them to assess risks and protect themselves against radon. In fact, EPA considers dissemination of public information a high priority and many of EPA's radon-related activities have consisted of circulating information to the public about radon and radon-reduction methods. Despite these efforts to inform the public, however, only about two percent of the nation's homeowners have acted to identify or correct radon problems.¹⁶ This low response is partly due to the difficulties in communicating and mitigating radon risks — difficulties that block the effectiveness of radon-related public information and awareness campaigns.¹⁷

Difficulties in Communicating Radon Risk

Exposure to hazardous waste or to pesticides usually provokes strong emotional responses; exposure to radon does not. This bland reaction is due, in part, to the following radon characteristics:

1. Radon poses a "life-style" risk — similar to that posed by smoking cigarettes or drinking alcohol — and people tend to underestimate, deny, or dismiss life-style risks.¹⁸

2. The objective probability of getting lung cancer from radon — between one and five percent if exposure is four picocuries per liter (piC/L) — is too low for people to understand the risk and respond appropriately.¹⁹

3. Radon — colorless, odorless, and tasteless — presents [20 ELR 10477] no perceptual reminders to alert people to its presence;²⁰ its physical characteristics do not trigger self-protective behavior.

4. Because radon poses a natural risk, rather than a risk created by man or technology, there is no "villain" to blame or to make responsible.²¹ Moreover, people tend to underestimate, dismiss, or deny natural risks and treat them less seriously than man-made risks.²²

5. Homeowners' experience with radon generally is benign, many having long lived with it in their homes without negative ramifications.²³

6. Radon-induced lung cancer has a long latency period and displays no early warning symptoms.²⁴ Because it takes so long for radon to cause cancer, homeowners do not perceive it as a serious threat.

7. Exposure to radon does not cause mass death or disaster; deaths occur singly. Also, there is no obvious perceptual link between exposure and death.

8. People, who choose their homes, voluntarily expose themselves to radon (and, before 1986, information about radon to consider when choosing homes was hard to obtain).²⁵

9. Radon risk is not the same for everyone; it varies depending on such factors as soil type, house structure, and behavior of home occupants.²⁶

Because of these risk characteristics, people greet with apathy and disinterest information about the hazards of radon presented in a general information and awareness campaign.²⁷ They evaluate radon's hazards like most environmental contaminants: based on its perceived risk rather than on its actual threat, and exposure to radon is perceived as a low risk.²⁸

The Many Steps to Mitigation

Communicating radon's risk is not the only problem. Persuading homeowners to test for radon and mitigate its risk is also difficult. Confronting radon in the home, homeowners must go through a multistep process to test for, evaluate, and eliminate or reduce radon.²⁹ This process includes the following steps.³⁰ First, a radon test kit (or kits) must be purchased, or testing services must be obtained. Second, the test must be conducted and confirmed. Third, some action must be taken to mitigate the problem if the measured radon level warrants it.³¹

Each of the three steps includes many other steps, which further complicate mitigation efforts and dissuade the homeowner from completing the process.³² For example, the homeowner must determine how many test kits he needs to test his home and where they can be purchased. After purchasing them, he must place them properly in his home for the specified time, and then submit the test kit for analysis. If the homeowner decides to employ a professional to test his home, he must collect information about, and employ, a radon tester. Once a tester is hired, a testing appointment or appointments must be scheduled. After the homeowner has the test results, he must evaluate them and decide whether remediation is required. To further complicate matters, the overall remediation decision involves other factors that are separate from the radon risk (e.g., costs associated with the options for remediation,³³ whether the levels of radon are perceived as threatening, and personal finances). Each of these decisions, in turn, depends on other decisions. In short, the homeowner's path to mitigation is circuitous and fragmented; it offers many chances to abandon the process.

Several studies of radon risk perception have examined homeowners' lack of concern about radon. They suggest, for the reasons discussed above, that mass media and information campaigns may not be successful in promoting appropriate self-protective behavior.³⁴

[20 ELR 10478]

A Radon Information and Awareness Campaign

A recent evaluation of a general information and awareness campaign illustrates the difficulties in encouraging voluntary radon mitigation. The campaign was conducted in the Washington, D.C., area by a local television station, a chain of grocery stores, and a company that sells and analyzes radon test kits (charcoal canisters).³⁵

The television station prepared a consumer news segment entitled Radon Watch. During the six weeks the segment was aired (from January 2 to February 15, 1988), the grocery chain sold radon test kits at half price. In addition, discounted test kits could be purchased directly from the manufacturer, which had placed a one-day, full-page advertisement in the Washington Post. The manufacturer also waived the postage and processing fees for the kits.³⁶ Approximately 6.5 percent of the target population (100,000 households) purchased test kits during this campaign,³⁷ an extremely high participation rate for a media campaign aimed at the general public.³⁸

Of the 100,000 test kits purchased, only 55,830 were returned to the manufacturer, which analyzed the radon levels in the kits.³⁹ The manufacturer divided the test results into four groups, based on the level of radon in the home:

— Group One (less than 4 piC/L) accounted for 71.3 percent of the respondents.

— Group Two (4 to 20 piC/L) accounted for 25.8 percent of the respondents.

— Group Three (20 to 50 piC/L) accounted for 2.2 percent of the respondents.

— Group Four (greater than 50 piC/L) accounted for only .6 percent.

To analyze the information and awareness campaign, between 200 and 250 households in each group, 920 in total, were selected for a mail survey,⁴⁰ which was conducted in November and December 1988. The 77 percent response rate of the 920 households surveyed was very high.⁴¹ The respondents tended to be more highly educated than the general public, had a higher-than-average income level, and most likely owned their home.⁴²

Based on the study data and other demographic information about the Washington, D.C., area, surveyors estimated that approximately 41 percent of all households would be expected to have a radon level of four piC/L or higher.⁴³ The mail survey revealed that only about 6.5 percent of the homes needing mitigation purchased test kits.⁴⁴ Apparently, many homeowners dismissed or underestimated the radon hazard. Moreover, only 3.6 percent of the homes needing mitigation carried out the radon test,⁴⁵ and only 14.8 percent of the homes that needed mitigation and tested for radon carried out mitigation.⁴⁶ These figures indicate that a high percentage of homeowners dropped out at each stage of the mitigation process. Overall, the mitigation rate was well under one percent, which is extremely low.⁴⁷ Even for the highest radon levels, the most favorable evaluation of the data indicates that the mitigation rate was no more than two percent.⁴⁸

The results of this mail survey provide convincing evidence that radon campaigns that are targeted at the general public and rely solely on information, awareness, and voluntary testing are unlikely to lead to widespread mitigation.⁴⁹ Based on the analysis of this and other information and awareness campaigns, it is clear that EPA must adopt other policy alternatives to encourage homeowners to remedy radon pollution. One alternative that leads to much more mitigation is the intervention at the time of home sale.

Radon Testing at the Time of Home Sale

In 1988, a telephone survey of recent home buyers was conducted in Boulder, Colorado, to measure radon testing and mitigation.⁵⁰ Because no general information and awareness campaign has been carried out in Boulder, one purpose of the study was to examine whether homeowners tested for radon and mitigated, when necessary. Another purpose was to determine what factors, if any, caused homeowners to confront the radon problem.⁵¹

The telephone survey list was compiled from the records of property sales published in the local newspaper; commercial property and apartment buildings were excluded. The first administration of the survey took place in December 1988. To increase sample size and response rate, the survey was administered again in February 1990.⁵² In total, 303 telephone surveys were completed from lists containing 496 names; the overall response rate was 61.1 percent.⁵³

Analysts divided the survey respondents into "testers" (i.e., those who had tested for radon) and "nontesters" [20 ELR 10479] (i.e., those who had not).⁵⁴ The testers, who comprised approximately 51 percent of the respondents, indicated that radon testing usually occurred before the home was purchased, most likely before the closing (36 percent).⁵⁵ The test was conducted by a professional 48 percent of the time, and most testers could accurately state the results of the radon measurement.⁵⁶ Thirty-one of the testers received test results of four piC/L or greater; over one-half claimed to mitigate, and most testers who mitigated conducted a follow-up test.⁵⁷ Clearly, compared with the results of the Washington, D.C., area test, the Boulder study identified a subpopulation — home buyers — that seemed to be influenced by radon's hazards and that persevered through the multistage mitigation process.⁵⁸

Based on the research discussed above, the home sale transaction seems to be an opportune event around which to organize a national radon strategy. Presented in the home sale context, both the home seller's and home buyer's apathy about radon's hazards can be transformed into self-protective action, thereby eliminating most of the problems associated with communicating radon risk and encouraging remediation. Nationally, this is a promising and costeffective strategy to achieve radon mitigation.⁵⁹

A Two-Part National Radon Strategy

Radon cannot be effectively controlled through traditional regulatory or liability techniques.⁶⁰ It cannot be regulated as a "point source" because it is natural and ubiquitous; it cannot be minimized through a liability-based strategy or permit mechanism because radon contamination generally is not caused intentionally or negligently.⁶¹ Radon-resistant construction techniques may prevent radon pollution in new homes,⁶² but innovative legal strategies must be designed to address radon in existing homes. New legal strategies are necessary because (1) traditional regulatory approaches, such as "command and control," are expensive for the federal government and time consuming to implement and (2) the federal government has not traditionally passed legislation regulating private homes because long-standing principles of privacy and the inviolability of the home have prevented federal government intrusion.⁶³ To the extent that homes and home sales are regulated, state and local governments, not the federal government, have controlled this area.

The national radon strategy proposed here makes radon testing and disclosure an integral part of the home sale transaction. The approach is flexible, does not create a time-consuming regulatory process or burdensome regulatory structure, is not costly to the federal government, and is largely self-policing. It requires Congress to enact legislation mandating that (1) for every federally related mortgage loan originated by mortgage granting institutions, general information about radon be provided to the mortgagor and (2) radon test results be included in every federally related mortgage loan purchased, swapped, handled, or otherwise acquired by certain federal or quasi-federal governmental organizations that participate in the secondary mortgage market.

Providing Radon Information to the Primary Mortgage Market

In 1989, approximately 3.4 million residential mortgages were originated⁶⁴ in the United States⁶⁵ by lenders, such banks, savings and loan institutions, and private investors. [20 ELR 10480] Savings and loan institutions are the primary suppliers of mortgage credit to home owners.⁶⁶

Origination of mortgages occurs through the primary mortgage market.⁶⁷ The key participants in the primary mortgage market are the home buyer, the seller, and the mortgage institution, whose officials oversee the mortgage application and approval process. During the mortgage origination process, all parties focus on the condition of the home.

The home buyer, who has a strong self-interest in learning as much as possible about the house before buying it, analyzes the home by reviewing such factors as its geographic location, price, square footage, and available utilities. During this time, the home buyer is also likely to contact mortgage institutions to finance his purchase, frequently speaking with mortgage officers and integrating the information they provide into his home purchase decision. At the same time, the seller wants to make his home desirable to prospective purchasers. Before offering it for sale, he may perform a "due diligence" evaluation to analyze its strengths and weaknesses and repair or improve it to enhance its sales appeal.⁶⁸ Mortgage institutions also have a strong interest in the condition of the home. They lend money based on the homes' underlying value, which they accept as collateral for the mortgage. Any diminution in its value directly affects the mortgage.⁶⁹

The primary mortgage market creates an ideal opportunity to inform home buyers and sellers about radon. Buyers, sellers, and mortgage institutions are perfectly positioned to learn about radon because they are attuned to the condition of the home. If mortgage applicants are provided with radon information, it is likely to be seriously considered in the home purchase transaction decision.

A national strategy that targets the primary mortgage market has been employed before. For example, the Real Estate Settlement Procedures Act of 1974 (RESPA)⁷⁰ requires all lenders that make federally related mortgage loans to provide a booklet about real estate settlement services to each person from whom they receive or for whom they prepare a written application to borrow money to finance the purchase of residential real estate.

RESPA defines a "federally related mortgage loan" as any loan that

(1) is secured by a first lien on residential real property; and

(2)(a) is made by a lender whose deposits and accounts are insured by any agency of the federal government, or a lender who is regulated by the federal government; or

(b) is made, insured, guaranteed, supplemented, or assisted in any way by the federal government or under or in connection with any housing or urban development plan of the Department of Housing and Urban Development; or

(c) is intended to be sold to the Federal National Mortgage Association (Fannie Mae), the Government National Mortgage Association (Ginnie Mae), the Federal Home Loan Mortgage Corporation (Freddie Mac), or a financial institution from which it is to be purchased by Freddie Mac;⁷¹ or

(d) is made by a "creditor"⁷² who makes or investsin more than $1,000,000 in real estate loans per year.⁷³

Clearly, federally related mortgage loans encompass most of the mortgages issued to purchase residential real estate.

Congress should enact a RESP A-like law requiring all lenders of federally related mortgage loans to distribute to potential mortgagors a booklet (or booklets), prepared or approved by EPA, which contains information about radon. The booklet could be based on EPA's two most widely disseminated radon pamphlets to homeowners: Citizen's Guide⁷⁴ and Radon Reduction Methods.⁷⁵ The legislation also should require that lenders provide this information as soon as possible before the closing; ideally, as early in the home buying and mortgage origination processes as feasible so that the buyer and seller have enough time to evaluate the radon levels in the home.

Requiring Radon Test Results for the Secondary Mortgage Market

The secondary mortgage market, which refers to sales and resales of mortgages and mortgage-based securities, was established as a direct result of federal concerns about problems and disparities affecting financing of residences.⁷⁶ It is a system in which lenders and investors buy existing mortgages and mortgage-backed securities.⁷⁷ Recently, the [20 ELR 10481] secondary mortgage market has boomed. For example, in 1985, nearly $160 billion in mortgages were sold into the secondary mortgage market. In 1986, the dollar amount of mortgage-backed securities issued exceeded the year's combined borrowing of the federal government plus all corporations.⁷⁸

The secondary mortgage market furnishes a mechanism that can be used to require radon testing and disclosure for home mortgages. To participate in the secondary mortgage market, mortgage lenders frequently use loan documents that meet standards set by Freddie Mac and Fannie Mae.⁷⁹ Over 80 percent of all conventional mortgages made in the last 20 years have used these standard loan documents, which include loan applications, appraisal reports, mortgages, and deeds of trust.⁸⁰ As part of its national radon strategy, Congress should enact legislation requiring that these documents and underwriting procedures⁸¹ include disclosure of the radon test results. By including this information in the mortgage documents, mortgage lenders will be compelled to obtain radon tests in order to participate in the programs sponsored by Freddie Mac and Fannie Mae. Because Freddie Mac and Fannie Mae set the standard for underwriting procedures even for mortgages that are not part of programs sponsored by them, the legislation is likely to affect a majority of the secondary mortgage market.

Advantages and Disadvantages of the Proposed National Radon Strategy⁸²

There are many advantages to controlling radon through home sales. First, its underlying policy is basedon sound economic and psychological research about what motivates homeowners to address radon issues. The strategy addresses an often neglected but potentially dangerous health risk (radon) in a context (the home sale transaction) in which it is most likely to be remedied. It provides radon information in a timely fashion so that protective behavior is framed as part of a high profile, single decision that covers a long time span.⁸³ Because the cost of radon mitigation is small compared with the cost of a home mortgage loan,⁸⁴ home buyers and sellers can factor radon-related costs into the transaction.⁸⁵

Second, the strategy uses social diffusion, an effective psychological information-spreading technique, to increase awareness about radon beyond the individual home sale.⁸⁶ Members of the community, such as mortgage bankers and real estate agents, will have access to radon-related information that can be spread effectively through informal social channels. Their responsibility to collect radon test results for most of the mortgages to be offered to the secondary mortgage market will emphasize the importance of monitoring radon in homes.

Third, this strategy is likely to encourage earlier radon testing and mitigation. As radon-related information becomes widely disseminated, radon testing and mitigation will become commonplace. Homeowners will realize that radon testing is likely to be a prerequisite to selling their home and may test for radon long before they offer it for sale. Thus, the costs of radon testing and remediation will be amortized over a longer period. Fourth, the strategy is cost-effective, especially when compared with general information and awareness campaigns, and economically efficient because it does not require mitigation but allows the buyer and seller to negotiate regarding radon.⁸⁷ Free market forces shape the ultimate resolution of the radon problem.⁸⁸ Fifth, the legislation is costeffective for the federal government because it does not call for a burdensome or expensive regulatory and enforcement program. Although EPA will be required to expend some resources to prepare or approve and distribute radon-related information that is appropriate to home sales, and to promulgate regulations relating to testing and disclosure in the secondary mortgage market, the strategy is largely self-sustaining. Because the legislation generates a strong incentive for mortgage institutions, Freddie Mac, Fannie Mae, Ginnie Mae, and home buyers to be concerned about [20 ELR 10482] radon, the strategy should be self-policing.⁸⁹ Last, the strategy creates a level playing field for real estate agents, mortgage bankers, and home buyers across the United States. In the absence of a national radon strategy, state and local governments will adopt patchwork approaches to radon. Thus, persons moving from New Jersey's Reading Prong area (where radon issues generally are addressed in real estate transactions) to another part of the country (where radon issues do not enter into home sales) will look to real estate agents and mortgage institutions for information about radon in their new community. Real estate agents and bankers most likely will be caught unprepared to help these clients.

This strategy has several disadvantages. First, its scope is limited because it only affects sales of homes. It does not address other dwelling units, such as apartment rental units or schools and public buildings.⁹⁰ Second, it is slow. Because only five percent of all homes are sold each year, it will take more than 14 years to affect only one-half of the existing homes in the nation.⁹¹ Third, it may be inequitable to current homeowners whose residences require extensive mitigation, because they could be forced to pay for remediation of a problem they neither created nor augmented.⁹² Most importantly, in order for this strategy to succeed, quality radon-related services (especially testing and mitigation) must be readily available. In other words, a national radon services market must develop and mature. Moreover, radon services should be standardized and radon professionals certified so that the public is confident of the testing and mitigation abilities of radon contractors. EPA operates programs to train radon professionals and to evaluate the capabilities of state and private sector companies, and is establishing three regional training centers to provide courses on radon health effects, measurement, and mitigation.⁹³ EPA's current and future capacity building efforts will play an important role in the success of this proposed national strategy.

Conclusion

Radon in homes is a national dilemma with potentially serious health implications. A national strategy is necessary to influence people to learn about radon and take action against it. In designing a national radon strategy, the traditional command and control regulation and liability models are inappropriate because of the causes of radon contamination and the nature of radon gas. Psychological and economic research indicates that general information and awareness campaigns are not effective in achieving significant levels of radon mitigation, but that a strategy centered around the home sale transaction is likely to motivate homeowners to correct radon problems.

This Article proposes an innovative, national radon strategy based on home sale transactions. This strategy is grounded in the psychological and economic principles that motivate radon testing and mitigation. The strategy requires that Congress enact legislation mandating that radon information be provided to mortgagors in every federally related mortgage loan transaction and that radon testing information be provided to mortgagors in every mortgage loan that is intended to be part of Freddie Mac's and Fannie Mae's programs. It is a flexible, market-based approach that is self-sustaining, self-policing, and will not spawn a large regulatory program. The strategy outlined here recognizes that in order to address unique environmental problems such as radon, environmental policy must be shaped by appropriate scientific research and embodied in legislation that expands the boundaries of traditional environmental law.

1. C. COTHERN & J. SMITH, ENVIRONMENTAL RADON § 1.1 (1987).

2. Three different isotopes of uranium are present in the earth's crust: uranium-238, -235, and -234. Radon-222 (radon gas) is produced midway through the decay cycle of uranium-238. Although it is an inert gas that does not react chemically with other elements or compounds, it undergoes radioactive decay and produces "radon progeny" or "radon daughters." Unlike radon, these radon progeny (polonium, bismuth, lead-214, and lead-210) are electrically charged and chemically active. They can attach themselves to air particles and when inhaled become lodged in the lung. Trapped inside the lung in close proximity to sterile lung tissue, radon progeny continue to decay, giving off radiation that can weaken, chemically alter, or damage the lung. NEW YORK STATE JOINT LEGISLATIVE COMMISSION ON TOXIC SUBSTANCES AND HAZARDOUS WASTES, RADON: RISK, REALITY AND REASON 3-5 (1990) [hereafter RADON: RISK, REALITY AND REASON].

3. See UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, A CITIZEN'S GUIDE TO RADON: WHAT IT IS AND WHAT TO DO ABOUT IT 1 (1986) [hereafter CITIZEN'S GUIDE].

4. Generally, the pressure inside a home is lower than the pressure outside. Open windows or operation of exhaust fans or other appliances can cause this pressure gradient. The pressure difference draws radon gas into the home through cracks and openings. See C. COTHERN & J. SMITH, supra note 1, at § 5.4.2.2; NEW JERSEY DEPARTMENT OF ENVIRONMENTAL PROTECTION, A GUIDE FOR HOMEOWNERS: RADON.

There are four potential sources of indoor radon: (1) ambient radon, primarily from soil emanation; (2) seepage from underlying soil and rock through building foundations; (3) radon release from water used in the home; and (4) radon emanating from uranium-and radium-containing structural materials used in building homes. In most homes with elevated indoor radon levels, radon has seeped through the foundation to accumulate in the home. See C. COTHERN & J. SMITH, supra note 1, at §§ 5.4.2.1, 5.4.2.2.

5. CITIZEN'S GUIDE, supra note 3, at 1.

6. See UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, UNFINISHED BUSINESS: A COMPARATIVE ASSESSMENT OF ENVIRONMENTAL PROBLEMS 28 (Overview) (1987). A more recent EPA study presented three comparative risk projects conducted in EPA Regions I (Boston, Mass.), III (Philadelphia, Pa.), and X (Seattle, Wash.). These projects confirmed the findings of the Unfinished Business report; all three EPA Regions ranked indoor radon as a "high health risk." UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, COMPARING RISKS AND SETTING PRIORITIES: OVERVIEW OF THREE REGIONAL PROJECTS X (1989).

7. See C. COTHERN & J. SMITH, supra note 1, at §§ 2.1.1-.1.3.

8. The Reading Prong is an uranium-enriched natural granite formation that extends under eastern Pennsylvania, northern New Jersey, and southern New York. See id. at § 2.1.11.

Although all soil contains uranium, geological formations of granite, shale, and phosphate are likely to carry higher concentrations of uranium. Nevertheless, geology is only one predictor of radon contamination in homes. Other factors, such as soil type, water supply, housing construction, and strength of the source, are equally important indicators. Because of these factors, radon levels in homes along the Reading Prong formation vary dramatically. In fact, homes next door to one another can contain vastly different amounts of radon. RADON: RISK, REALITY AND REASON, supra note 2, at 5.

9. In the 17 states surveyed under EPA's state survey program, 25 percent of all homes had elevated levels. UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, 1 REPORT TO CONGRESS ON INDOOR AIR QUALITY. FEDERAL PROGRAMS ADDRESSING INDOOR AIR QUALITY 26 (1989) [hereafter REPORT TO CONGRESS ON INDOOR AIR QUALITY]. Another EPA study, released in September 1988, indicated that approximately 33 percent of all homes had radon levels over four picocuries per liter (piC/L). RADON: RISK, REALITY AND REASON, supra note 2, at 17.

10. United States Environmental Protection Agency, EPA and Assistant Surgeon General Call For Radon Home Testing, ENVTL. NEWS, Sept. 12, 1988, at 1-2.

11. REPORT TO CONGRESS ON INDOOR AIR QUALITY, supra note 9, at 26-27.

12. Id. at 27.

13. Id.

14. Radon Pollution Control Act of 1988, 102 Stat. 2755 (codified as Title III of the Toxic Substances Control Act, 15 U.S.C. §§ 2661-2671 (RPCA)); Radon Gas and Indoor Air Quality Research Act of 1986, Title IV, 100 Stat. 1758. RPCA sets a national goal for radon in buildings, requires EPA to update and republish its CITIZEN'S GUIDE, orders EPA to develop model construction techniques and standards for controlling radon, and authorizes grant assistance for state radon programs. It does not authorize EPA to carry out a national regulatory radon program. Section 404 of the Radon Gas and Indoor Air Quality Research Act states: "Nothing in this title shall be construed to authorize [EPA] to carry out any regulatory program or any activity other than research, development, and related reporting, information dissemination, and coordination activities specified in this title."

15. See generally UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, DIRECTORY OF STATE INDOOR AIR CONTACTS (1988); UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, SUMMARY OF STATE RADON PROGRAMS (1987). State radon programs are not discussed in detail in this Article.

16. REPORT TO CONGRESS ON INDOOR AIR QUALITY, supra note 9, at 32.

17. See generally UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, AN EVALUATION OF STRATEGIES FOR PROMOTING EFFECTIVE RADON MITIGATION (1990) [hereafter PROMOTING EFFECTIVE RADON MITIGATION]. The principal co-authors of this report are James K. Doyle, Dr. William D. Schulze, Dr. Gary H. McClelland, and Paul A. Locke.

18. L. Sjoberg, Radon Risks: Perceptions and Actions 63-64 (draft report, Feb. 1989) [hereafter Radon Risks: Perceptions and Actions].

19. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 1.

20. Id.

21. Id.

22. Of course, if a nuclear-fueled utility plant were emitting radiation at levels that created the same risks as radon, it is likely that homeowners' response would be quite different. See Radon Risks: Perceptions and Actions, supra note 18, at 14-16.

23. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 1.

24. Id.

25. Id.

26. Id.

27. Id. at 2.

28. Radon Risks: Perceptions and Actions, supra note 18, at 37.

29. Other indoor air pollutants, such as asbestos fibers from building materials, lead in drinking water, and formaldehyde vapors emitted by urea-formaldehyde insulation, share this problem; self-protective behavior requires individuals to complete successfully a complicated, multistep process. Thus, the strategy described in this Article may be applicable to other indoor environmental problems. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 57-58.

30. CITIZEN'S GUIDE, supra note 3, at 6-8; PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 22. (As part of an evaluation of a Washington, D.C., area information and awareness campaign, radon mitigation is conceptualized as an uncertain, multistep process that "may have several substages and may, during actual mitigation, be cycled though several times.")

31. At present, the Agency has not established a "threshold level" below which radon health effects are considered negligible. Instead, EPA has established four piC/L as its "action level." This is a technology-based, not a health-effects-based, level. See CITIZEN'S GUIDE, supra note 3, at 11. Below this level, EPA believes that "[e]xposures . . . are considered average or slightly above average for residential structures. Although exposures in this range do present some risk of lung cancer, reductions of levels this low may be difficult, and sometimes impossible, to achieve." Id.

In RPCA, Congress ordered EPA to reassess this action level and redraft the CITIZEN'S GUIDE to include a series of action levels indicating the health risks associated with different levels of radon exposure and other health-related information, such as radon's potential health effects on sensitive populations and increased health risks associated with radon exposure and other risk-taking behavior. See 15 U.S.C. § 2663(b). Congress included this provision in RPCA because it believed that the public was interpreting any radon level below four piC/L as a safe level. It wanted to encourage homeowners to reduce radon levels as low as practicable. H.R. 1047, 100th Cong., 2d Sess. 12-13, reprinted in 1988 U.S. CODE CONG. & ADMIN. NEWS 3617-18. In fact, RPCA states that "[t]he national long-term goal of the United States . . . is that the air within buildings . . . should be as free of radon as ambient air outside buildings." 15 U.S.C. § 2661.

32. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 21.

33. EPA has written several publications regarding radon remediation that are designed to help homeowners understand and cope with the remediation process. See, e.g., UNITED STATES ENVIRONMENTAL PROTECTION AGENCY, RADON REDUCTION METHODS: A HOMEOWNER'S GUIDE (1986) [hereafter RADON REDUCTION METHODS]. Radon Reduction Methods emphasizes that "[m]ost radon remedies require the skilled services of aprofessional contractor who is experienced in radon-reduction techniques." Id. at 1. The publication also states that follow-up testing should be conducted after mitigation has been completed. Id. at 1-2. Thus, the radon mitigation process is further complicated by at least two more stages — selecting a contractor and conducting more testing.

34. Id. at 3; see also Radon Risks: Perceptions and Actions, supra note 18, at 31.

35. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 15. Charcoal canisters are commonly used radon testing devices. See CITIZEN'S GUIDE, supra note 3, at 5.

36. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 15.

37. According to the A.C. Nielson Company, the television station reaches approximately 1,500,000 households. Id.

38. Id.

39. Id. at 28.

40. A stratified sampling design was used to allow separate estimates of remediation at each radon level. Initially, 250 addresses were selected from each of the four groups (1,000 test kits in total). Duplicates, commercial addresses, and government addresses were removed, and 920 addresses remained. Id. at 16-17.

41. Id. at 19. The response rate did not vary by radon level.

42. Id. at 20. For a more detailed examination of the mail survey, see Chapter 2 and Appendix I of PROMOTING EFFECTIVE RADON MITIGATION, supra note 17.

43. Id. at 26. According to EPA's CITIZEN'S GUIDE, levels above four piC/L require remediation. CITIZEN'S GUIDE, supra note 3, at 11.

44. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 28 ("Only 24,881 of the 381,714 houses [6.5 percent] needing mitigation reached this stage.").

45. Id.

46. The survey results measured three mitigation categories — claimed mitigation, credible mitigation, and mitigation with retesting. Of those who mitigated, most fall into the "claimed mitigation" category. Few homeowners credibly mitigated; even fewer mitigated and retested, as EPA recommends in the CITIZEN'S GUIDE. Id. at 31.

47. Id.

48. Id.

49. Id. at 37.

50. Unlike the Washington, D.C., area study, which was aimed at the general public, this study focused on the behavior of a subpopulation who were recent home buyers. The Washington, D.C., area study measured response to a risk communication campaign; the Boulder study measured preexisting behavior. Id. at 74.

51. Id. at 59.

52. Id. at 65.

53. Id. at 65-66.

54. Id. at 67.

55. Id. at 68.

56. Id. at 69.

57. Id. at 70.

58. Id. at 77. One of the reasons that the Boulder study revealed such high testing rates could be the effect of the policies of IBM, a significant employer in the Boulder area. Apparently IBM's corporate "buyback" policy dictates that all homes undergo radon testing prior to being purchased. Id. at 63. As a result of this policy, it is possible that area residents, real estate agents, and other professionals involved in residential property sales are well informed about radon. Additionally, the ready availability of radon-related services in the Boulder area may be the result of this policy. Id.

Nevertheless, the Boulder survey results indicate that non-IBM employee testing and mitigation rates were not significantly different from IBM employee testing and mitigation rates. Id.

59. Several states have adopted legislation requiring that radon information be provided during the home sale process. See, e.g., N.J. STAT. ANN. § 26:2D-73 (requiring that radon test results be disclosed if a radon test was conducted); R.I. GEN. LAWS § 45-24.3-23 (requiring that a general radon notification be inserted into purchase and sale agreements for residential real estate).

60. Moore, The Radon Review: The Federal And State Governments' Responses to Indoor Radon Contamination, 7 TEMP. ENVTL. L. & TECH. J. 41-42 (1988). Moore also points out that the EPA may not have the authority to regulate indoor radon under present environmental statutes.

61. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 87.

62. RPCA requires EPA, in conjunction with organizations involved in establishing national building construction standards and techniques, to develop model construction standards and techniques for controlling radon levels in new buildings. 15 U.S.C. § 2664.

63. Cf. Brookes, EPA in Your Bedroom?, Wash. Times, May 23, 1990, at F1.

64. Origination is the process by which a mortgage institution brings into being a mortgage on the home. See FEDERAL NATIONAL MORTGAGE ASSOCIATION, A CITIZEN'S GUIDE TO THE SECONDARY MORTGAGE MARKET 43 (1988) [hereafter FNMA GUIDE]. As used in this Article, a mortgage is defined as a security device used by persons wishing to purchase a home in which a security interest in, or lien on, the home is transferred to a mortgage institution in return for the price of the home or a part of the price of the home. It does not include a home equity loan, home improvement loan, or other loans secured by the home.

65. See UNITED STATES DEPARTMENT OF HOUSING AND URBAN DEVELOPMENT, SURVEY OF MORTGAGE LENDING ACTIVITY 1989 — ANNUAL TABLES Table 2 (1990). Among other things, Table 2 summarizes the annual gross flows of long-term mortgage loans on 1-4 family nonfarm homes by loan type for 1989. According to this table, loans insured by the Federal Housing Administration (FHA) accounted for approximately 9.8 percent of the primary mortgage market ($34,625,000,000); loans guaranteed by the Department of Veteran's Affairs (VA) comprised approximately 2.9 percent of the primary mortgage market ($10,215,000,000); and conventional loans (mortgages that are not FHA insured or VA guaranteed) made up approximately 87.3 percent of the primary mortgage market ($307,186,000,000). Total originations for 1989 were $352,026,000,000. See also Federal Housing Finance Board News (Table 2), Apr. 18, 1990. Among other things, Table 2 lists the monthly loan amounts of conventional mortgages from March through December 1989. Based on these figures, the 10-month arithmetic mean loan amount is approximately $104,380.

To calculate the approximate number of 1989 mortgage originations, the annual gross flow of conventional mortgages was divided by the 10-month arithmetic mean to determine the approximate number of conventional mortgages ($307,186,000,000 divided by $104,380 is approximately equal to 2,942,958). Assuming that 2,942,958 conventional mortgages comprise 87.3 percent of the primary market, the total number of mortgages originated is approximately 3,371,086 (2,942,958/87.3 percent = x/100 percent).

66. Pittman Economic and Regulatory Developments Affecting Mortgage Related Securities, 64 NOTRE DAME L. REV. 497, 501 (1989).

67. The primary mortgage market "refers to transactions between mortgage lenders and homeowners or builders." Pittman, supra note 66, at 498 n.9.

68. In contrast to the home buyer and mortgage institution, the seller's interest runs against the disclosure of negative or unfavorable information about the home (e.g., high levels of radon) because such information may make the home more difficult to sell. Thus, radon test results compiled by a seller specifically for use in a home sale transaction should be confirmed by another test or test conducted by a neutral third party, preferably a professional radon tester.

69. Boothe. What Every Banker Should Know About Radon, Independent Banker 20 (May 1989). Boothe, President of Western National Bank of Texas, states: "What does [radon] mean for banking? It means that the economic value and marketability of many real estate properties, used as collateral, could be affected by the presence of a previously unknown or ignored substance, radon." Id.

70. 12 U.S.C. § 2604(a), (e). The Secretary of Housing and Urban Development is required to prepare and distribute the booklets to all lenders making federally related mortgage loans. 12 U.S.C. § 2604(a).

71. Fannie Mae was created by Congress in 1968. It is a congressionally chartered privately owned corporation that purchases FHA insured and VA-guaranteed residential mortgages and conventional home mortgages. FNMA GUIDE, supra note 64, at 40-41. Ginnie Mae also was created in 1968. Among other things, it guarantees securities backed by pools of mortgages created by private originators. Pittman, supra note 66, at 499 n.12. Freddie Mac was created by Congress in 1970. It purchases mortgages in the secondary mortgage market and sells mortgage participation certificates secured by pools of conventional mortgage loans. FNMA GUIDE, supra note 64, at 9, 40.

72. "Creditor" is defined in 15 U.S.C. § 1602(f). For purposes of RESPA, it does not include any agent or instrumentality of any state. 12 U.S.C. § 2602(B)(iv).

73. 12 U.S.C. § 2602(1); see also 24 C.F.R. § 3500.5 (1989).

74. Supra note 3.

75. Supra note 33.

76. K. LORE, MORTGAGE BACKED SECURITIES: DEVELOPMENTS AND TRENDS IN THE SECONDARY MORTGAGE MARKET § 1.01 (1989).

77. Pittman, supra note 66, at 499 n. 9.

Although a nongovernmental private sector secondary market exists, Freddie Mac, Ginnie Mae, and Fannie Mae dominate the secondary market. K. LORE, supra note 76, at §§ 1.01- .03. Freddie Mac serves as a conduit for the secondary market by linking investors and lenders. FNMA GUIDE, supra note 64, at 45. Ginnie Mae guarantees securities backed by pools of mortgages created by private originators. Pittman, supra note 66, at 499, n.12. Fannie Mae issues mortgage-backed securities through two programs: a "cash" program and a "swap" program. Id. at 500 n.14.

For a fascinating look at how a home mortgage makes its way through the primary and secondary mortgage markets, see G. Anders, A Loan's Odyssey: How a Home Mortgage Got Into a Large Pool That Lured Investors, Wall St. J., Aug. 17, 1988.

78. FNMA GUIDE, supra note 64, at 5.

79. The private secondary mortgage market does not require that its loans follow Freddie Mac and Fannie Mae underwriting procedures, but these federal underwriting guidelines are used by rating agencies such as Standard & Poors to determine the quality of an underlying mortgage pool. SHEARSON LEHMAN HUTTON, UNDERSTANDING THE PRIVATE-LABEL PASS-THROUGH MARKET 8, 12 (1990). Thus, the private secondary market may be strongly influenced by any changes to the federal underwriting standards. Additionally, because private mortgage-backed securities are not insured or guaranteed by the federal government, they are more dependent on the underlying value of the loan collateral. Accordingly, issues regarding radon contamination should be carefully considered by prudent underwriters who review loan files.

80. FNMA GUIDE, supra note 64, at 17.

81. "Underwriting" is the analysis of a real estate loan for the purpose of determining the amount of risk involved in the loan. It includes a review of the borrower's credit, an evaluation of the secured property, and a review of certain legal documents. Id. at 46.

82. Because this proposed strategy is presented descriptively and no detailed legislative language has been suggested here, this Article does not discuss the potential legal issues associated with adopting legislation that embodies the strategy. Certain constitutional issues (commerce clause, the Fifth Amendment "takings clause," and the Tenth Amendment) are discussed generally in Appendix IV of PROMOTING EFFECTIVE RADON MITIGATION, supra note 17.

83. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 10.

84. Radon mitigation generally costs between a few hundred dollars and several thousand dollars. RADON: RISK, REALITY AND REASON, supra note 2, at 27. EPA's Radon Reduction Methods lists nine mitigation methods. Block-wall ventilation, the most expensive method, is estimated to cost between $2,500 and $5,000. Id. at 18. In contrast, during the first 10 months of 1989, the average loan amount of a conventional home mortgage was approximately $104,380. Supra note 65.

85. New Jersey real estate agents have developed an escrow procedure whereby the seller tests for radon before the closing and the buyer tests after closing. If remediation is necessary, it is funded by an escrow account created before closing by the buyer and seller. Moore, supra note 60, at 58.

86. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 9.

87. Id. at 10-11. The results of the Boulder, Colorado, study indicate that negotiations result in remediation of high radon levels, not compensation for the acceptance of increased radon risk.

88. In fact, several authors have criticized EPA's concern over radon. See, e.g., Brookes, $1 Trillion Radon Rip-Off, Wash. Times, June 25, 1990. The strategy suggested here would permit radon skeptics to purchase and occupy homes contaminated with radon without reducing the levels to which they are exposed.

89. PROMOTING EFFECTIVE RADON MITIGATION, supra note 17, at 11, 105-06.

90. Id. at 10. For suggested strategies that are applicable to public buildings, see id. at 113.

91. Id. at 10.

92. Congress could soften this inequity by passing legislation that provides tax incentives or low- or no-interest loans to this class of home owner. Similar legislation has been introduced in Congress and at least one state legislature. See Jackowitz, Radon's Radioactive Ramifications: How Federal and State Governments Should Address the Problem, 16 J. OF ENVTL. AFF. 372 n.264 (Pennsylvania Loan Program) and 265 (federal legislation) (1988).

93. REPORT TO CONGRESS ON INDOOR AIR QUALITY, supra note 9, at 30-31. Capacity building is one of the four major elements of the Agency's Radon Action Program. See infra at 4-5.