Background. Local Law 38, which went into effect November 12, 1999, was the product of a long and at times contentious legislative process to develop an alternative to the statutory framework established by Local Law 1 of 1982. New York courts had interpreted Local Law 1 as requiring the complete removal or encapsulation of lead paint in any multiple dwelling unit occupied by a child under the age of seven. The state of scientific knowledge, however, had evolved to the point of a broad consensus that improper removal of lead paint could create a substantial hazard to the health of young children. Rather than complete removal of all intact lead paint-particularly where young children or pregnant women are in residence-a better solution is removal of lead paint from high-risk surfaces (such as windowsills) and the maintenance in good condition of other lead-painted surfaces and underlying structures.
Out of concerns about the health hazards of improper abatement and the burdensome costs to landlords of the law's requirements, the city had not enforced Local Law 1 until 1998, when the New York County Supreme Court ordered the city to begin implementing the law or to develop an alternative. Ultimately an alternative bill introduced by the Giuliani administration, with Council amendments, was adopted as Local Law 38.
Local Law 38 imposes new requirements on landlords, the Department of Housing Preservation and Development (HPD), and the Department of Health (DOH). Under the law, landlords in pre-1960 multiple dwellings must make a good faith effort to determine if a child six years old or younger lives in a unit, and if so, to annually inspect the unit for peeling paint and correct any lead paint hazards. If a tenant makes a complaint to HPD about a possible lead paint hazard, Local Law 38 imposes specific inspection requirements on HPD. If a lead paint hazard is found, the landlord must correct it within a specified timeframe and certify to HPD that the violation has been corrected. False self-certification is subject to a penalty of $25,000. If the landlord fails to correct a lead paint hazard violation, HPD will refer the violation to its emergency repair bureau and charge the landlord for the cost of the work.
DOH was given responsibility for promulgating work practices for removal of lead-based paint and for publishing a pamphlet to explain the health hazards associated with lead-based paint; the pamphlet includes a contact number for securing medical assistance and reporting unsafe work practices. DOH must refer any uninsured or underinsured child to a medical provider if assistance is requested with obtaining a blood lead screening, test, diagnosis, or treatment.
Budget Impact on HPD. Above and beyond what had already been budgeted for lead paint remediation, HPD has received an additional $6.0 million in fiscal year 2000 for the implementation of Local Law 38; the Mayor's preliminary budget proposes another $13.0 million annually beginning in 2001. These funds include money for emergency repair contracts and for 80 new employees, including code inspectors, in-house emergency repair personnel, and contract monitors.
HPD already had two lead paint hazard reduction programs underway prior to passage of Local Law 38. One program, which uses Community Development Block Grant (CDBG) funds, is principally for emergency lead treatment in private buildings in response to complaints and violations, and for lead remediation in properties taken by the city through the "in-rem" process. HPD and DOH have also received federal grants totaling $8.3 million since 1994 to conduct lead paint hazard reduction activities, mainly through HPD's Primary Prevention Program, and for public education and research. These funds are nearly exhausted, and HPD and DOH will apply for further funding this year.
In FY 1999, HPD had a total expense budget of $13.0 million for lead activities, including $10.4 million in CDBG funds, and spent $8.1 million. In FY 2000, HPD has a budget of $18.1 million ($11.7 million from CDBG), including the $6.0 million in city funds added specifically for Local Law 38 implementation. As of the end of February, with two-thirds of the fiscal year completed, it has spent $6.6 million. The total proposed HPD lead budget for FY 2001, including the $13.0 million added for Local Law 38 implementation, is $26.9 million. The budget proposes shifting funding for implementation of Local Law 38 from city funds to CDBG funds in 2001 as other demands on CDBG funds decline due to the shrinking inventory of city-owned in-rem properties.
HPD also has a lead paint abatement program as part of its capital budget, with $10.0 million available for this year, $14.1 million planned for 2001, and $8.0 million in subsequent years. A portion of the capital program is used as matching funds for the federal lead grant program to treat lead paint hazards in targeted areas of the Bronx, Brooklyn, and Manhattan, primarily by providing forgivable loans of approximately $7,500 per unit to landlords. Capital funds are also used for lead hazard treatment in city-owned properties.
Budget Impact on DOH. The Department of Health has an existing Lead Poisoning Prevention Program funded this fiscal year at $7.3 million (of which roughly $2.0 million has been spent so far). The DOH capital plan also earmarks $2.3 million over the next two years for the purchase of new equipment, including x-ray fluorescence (XRF) lead paint analyzers.
Local Law 38's direct budgetary impact on DOH is slight. The law's requirements on DOH-medical referrals, the lead hazard pamphlet, and promulgation of work practices-have been implemented. However, to address Councilmembers' concerns, the City Council and the Mayor agreed at the time of the law's passage that the city would undertake several additional health-related measures, including creating up to 10 new lead safe houses throughout central Brooklyn, northern Manhattan, and the South Bronx, hiring 51 new employees (some of whom will work in affected communities), and purchasing up to six new mobile outreach vans to provide assistance to families.
To accomplish these measures, the city appropriated an additional $6.1 million for this year and $5.2 million annually for fiscal years 2001 to 2004 in the DOH budget. The budget for fiscal year 2000 initially provided $2.0 million, matched by the state with an additional $1.1 million. In November, the budget was modified to add another $3.0 million for the current fiscal year, and an additional $2.2 million per year ($1.3 million in city funds and $0.8 million in state money) beginning in FY 2001.
It is unlikely, however, that most of these funds will be spent by the end of this year. These measures have not been fully implemented because the City Council and DOH are still in negotiations over several issues, including the use and location of HPD-owned buildings for safe houses. DOH has said that plans are currently being drafted and that requests for proposals will be issued in the near future.
For more information on HPD please contact Preston Niblack, a Senior Budget and Policy Analyst, at (212) 442-0220, and for more information on DOH please contact Rebecca Hernandez, a Budget and Policy Analyst, at (212) 442-8619.