Peter Miller on Real Estate: What are Extreme Environmental Regulations Good For?

Rampant environmental conservatism may hurt humans more than help them.

October 1, 1999

It's been a busy few weeks on the environmental front.

In California, a fly is holding up development worth more than $500 million.

Meanwhile important research "proving" that power lines cause cancer is bogus, the government alleges in a recent complaint against a researcher.

You wouldn't think that EMFs would be much of a problem. When the American Physical Society, a group that includes 45,000 physicists, reviewed 1,000 scientific papers on the subject, it found no link between electromagnetic fields and cancer. (See "Cancer Fear Is Unfounded, Physicists Say," The New York Times, May 14, 1995.)

But doubts persisted, because, after all, there were government studies that showed a correlation between EMFs and cancer. In fact, the U.S. Department of Health and Human Services noted that because EMFs are associated with such things as power lines, home wiring, and household appliances, there has been "public concern" regarding their potential health effects.

As a result, properties near high-tension power lines and electrical substations have lost value. Environmental attorney Stuart Lieberman estimates that values of impacted properties have tumbled five to 15 percent.

Now—long after real estate equity has been devalued—studies are being questioned. One key researcher's claims, says the government, "were potentially very important when published in 1992" because they supposedly showed a link between EMF and cancer. The research cost $3.3 million, according to the San Francisco Examiner("U.S. Says Fake Data Tied Cancer, Power Lines, Berkeley researcher denies wrongdoing," July 23, 1999) and was "significant at the time because [it] purported to show the first plausible biological mechanism linking electromagnetic fields exposure to cancer and other diseases including childhood leukemia."

But, the Health and Human Services department of Office of Research Integrity in a final finding of scientific misconduct, alleges that the researcher "intentionally falsified and fabricated data and claims about the purported cellular effects of electromagnetic fields that were reported in two scientific papers." The researcher denies ORI's finding. So much for multimillion-dollar credible government research.

Will the property sellers who lost equity because of well-publicized, but unwarranted EMF fears get a check from the government?

There should be a balance between costs and benefits—how much benefit we get for each dollar expended—of abating environmental problems, a requirement omitted from most environmental research and rules, including the Endangered Species Act. For instance, with pure intentions and good hearts we've placed the loathsome but declining Delhi Sands flower-loving fly on the endangered species list. The law requires this because the fly isn't breeding with the times.

This would be amusing if the financial consequences weren't so dear. In California, the Associated Press reports that bonds worth $42 million may go into default because work on $500 million residential and commercial projects where the fly breeds are being delayed. And since the owners can't build, they have no money to pay the taxes that would be used to pay off the bonds.

Let's agree that we want to save various insects, plants, and animals because bio-diversity is a positive concept. But must we save them all?

Most species which have existed on this planet are long gone—about 98 percent by some estimates. If we agree that flies in general should be saved because they clean up after the rest of us, must we also agree to protect each and every species? How much good can the Delhi Sands fly do if only a few thousand remain? Rather than saying all flies now living should be protected, wouldn't it make more sense to apply a cost-benefit analysis to a particular species survival?

Consider a cleanliness analogy: Should we wash our hands several times a day? Most of us would say yes. But if the question is, Should we wash our hands every four minutes? we know the idea is absurd.

Those who benefit from the quest for environmental perfection must justify the costs they impose on the rest of us. And the government should think about writing a few checks, not only to those who study EMFs and flies, but also to those who've suffered unwarranted property losses as a result of research the government funded, promoted, and now says is fake.

We've reached a point with environmental regulations where there should be a reasoned balance between costs and benefits. It's time to say that extremism and absolutism don't work.

Peter G. Miller, OurBroker®, also writes a column that appears in Realty Times each Tuesday, and is the author of The Common Sense Mortgage, the best-selling guide to real estate finance. He's the original creator and host of the Real Estate Center with America Online and maintains a consumer information site at

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