by
Washington, D.C
CNN
—
Jim Stewart was preparing to sell his home in East Palestine, Ohio and retire. Then, on February 3, a Norfolk-Southern train derailed, releasing toxic chemicals into the air and nearby water, and he fears it will destroy the value of his home.
He and his wife hoped to put their three-bedroom home on the market this spring as prices were still high and inventory low. Alternatively, they spoke of his son’s family buying a house that was in the market down the road from Stewart.
But even though state officials say the water is safe to drink, convincing potential homebuyers otherwise is an uphill battle.
“Since the derailment, I’ve lost all those options,” he said. “Who will buy contaminated land? The older people are willing to stay and live it out. The younger bunch, they’re smarter. They think of their families. I wouldn’t want my grandchildren here. We don’t know if the soil will be good enough for grass to grow. There are too many unknowns.”
Stewart, 65, recently expressed his anger and sadness at what he lost to Norfolk Southern CEO Alan Shaw on February 22 at a town hall over the gaffe on CNN.
“You burned me,” he said to Shaw. “We wanted to sell our house. Our value has come to nothing,” and pointed his hands down.
When Shaw was asked directly by another resident if Norfolk Southern was willing to buy Stewart’s home, all he replied was, “We’re going to do what’s right for this community.” That wasn’t for Stewart, nor for many of the other attendees in the Town Hall satisfactory.
“I’ve lost everything now,” Stewart says of telling Shaw.
Stewart works as a manager at a commercial baking company.
“I’ve worked hard. I’m still working,” he told Shaw. “I am in my 44th year at my job. I wanted out. Now I’m just stuck.”
Stewart fears he’s lost tremendous value from his home, which he bought for $85,000 in 2016.
The property was worth about $135,000 a month ago, according to an estimate by Zillow. The lack of transactions since then makes it difficult to make an up-to-date assessment.
“I’ll never be able to do that. I’m lucky to get what I paid for it, if anything,” he said of the appraisal. Additionally, Stewart believes it would cost a lot to do the repairs and testing to ensure the home is safe.
“At whose expense? That’s the biggest problem right now,” Stewart said. “At whose expense are we going to do things to make sure it’s okay?”
Stewart isn’t the only one who was furious with Shaw and Norfolk Southern for the railroad’s refusal to offer the community compensation for the property value destroyed by the derailment.
At Thursday’s Senate hearing on the crash, Sen. Ed Markey, a Massachusetts Democrat, asked Shaw four times to commit to homeowner compensation, only to hear Shaw repeatedly respond, “Senator, I am committed to doing the right thing .”
Markey said that was not an acceptable answer.
“Are you committed to making sure these families, these innocent families, don’t lose their life savings in their homes and small businesses? The right thing to say is, ‘Yeah, we will.'” Markey told Shaw. “These families want to know in the long term whether they will simply be left behind. Once the cameras move on, once the national attention fades, where will these families be? I think they’re going to be in the crosshairs of the Norfolk Southern accountants and they’re going to say, ‘We’re not going to pay full compensation.'”
Paying homeowners and businesses would not necessarily be difficult for Norfolk Southern.
With a population of about 5,000 people, there are about 2,600 residential properties in East Palestine, according to Attom, a provider of real estate data. According to Attom, the average value of a property there in January this year before the derailment was $146,000.
The combined value of all residential real estate in the city, including single-family and multi-family homes, is approximately $380 million.
These values are just a fraction of the money Norfolk Southern makes. Last year, it reported record operating income of $4.8 billion and net income of $3.3 billion, up about 9% year over year. As of December 31, the company had $456 million in cash on its books.
The company has returned much of that profit to shareholders, repurchasing $3.1 billion of stock last year and spending $1.2 billion in dividends. And it announced a 9% dividend increase just days before the accident.
A year ago, the board approved a $10 billion share buyback plan.
When asked by Senator Jeff Merkley, an Oregon Democrat, at Thursday’s hearing, “Will you commit to no further share buybacks until a series of safety measures are completed to reduce the risk of derailments and accidents in the future?” , Shaw again dodged the question by simply replying, “I will commit to continuing to invest in safety.”
And the company also invests heavily in lobbying, spending $1.8 billion on lobbying in 2022, according to OpenSecrets.org, which tracks spending on lobbying and political contributions.
That lobbying expense was also attacked by senators at the hearing, especially since Shaw would not commit to supporting the bipartisan railroad safety bill that had been tabled in the Senate since the derailment. When asked whether he would support or oppose the legislation, Shaw would not support all of the bill’s provisions, but he replied, “We are committed to the legislature’s intent to make the railroad safer.”
A big payout probably isn’t what many in East Palestine are looking for, said Jim Warren, manager and co-owner of Kelly Warren and Associates Real Estate Solutions in Boardman, about 15 miles from East Palestine. They just want a house that is safe to live in and made complete for its value, he said.
“People here don’t want much,” he said. “We don’t hunt the conspicuous items like we do in other places in the world. We want to grow up, raise our kids, make a living and have a nice place to live, that’s all we want.”
In this area, as in the rest of the country, the real estate market has heated up in recent years with several listings for homes and land selling above asking price. But, Warren said, unlike other parts of the country, the market in this part of Ohio remains fairly stable.
“Our area isn’t moving up as much and it’s not moving down as much,” he said. “We don’t have big fluctuations.”
Warren’s company currently has two entries in the city.
“It’s neither more nor less than usual,” he said. There are always only about ten properties on the market, he said.
But, he added, “if your property is contaminated, that’s a problem for you and any buyer.”
As with any real estate purchase, houses in East Palestine would need to be assessed and safety tested. But like Stewart, Warren said it’s not yet clear who will pay for the additional water and soil pollution testing for that peace of mind.
“As far as we know, it could be up to the county or the EPA or the Ohio state government.” That remains to be seen,” he said.
Overall, Warren said he expects homes to continue to be bought and sold in eastern Palestine.
“We don’t expect the market to collapse, but expect steady growth,” he said. “After all the hype is gone, we still live here. We will have to find out because this is our home.”
