Jim Stewart was about to sell his house in East Palestine, Ohio, and retire. Then came the derailment of a Norfolk Southern train on February 3, releasing toxic chemicals into the air and nearby water, and he fears that his home’s value will plummet.
He and his wife were hoping to put their three-bedroom home on the market this spring as prices were still high and inventory low. Alternatively, they talked about her son’s family buying a house that was on the market down the street from Stewart.
But even if state officials say the water is safe to drink, convincing potential buyers otherwise is an uphill battle.
“Since the derailment, I’ve lost all those options,” he said. “Who is going to buy contaminated land? The elderly are ready to stay and live. The younger group, they are smarter. They think of their families. I wouldn’t want my grandchildren to be here. We don’t know if the soil will be good enough to grow grass. There are too many unknowns. »
Stewart, 65, recently expressed his fury and sadness over what he lost to Norfolk Southern CEO Alan Shaw during a Feb. 22 town hall over the derailment on CNN.
“You burned me,” he told Shaw. “We were going to sell our house. Our value has freaked out,” pointing his hands down.
Another resident asked Shaw point-blank if Norfolk Southern was ready to buy Stewart’s house, he simply replied, “We’re going to do what’s right for this community.” It wasn’t satisfying for Stewart or many of the other town hall attendees.
“I’ve lost everything now,” Stewart told Shaw.
Stewart works as a manager in a commercial bakery business.
“I worked hard. I’m still working,” he told Shaw. “I am in the 44th year at my job. I wanted to go out. Now I’m just stuck.
Stewart fears he’s lost a huge chunk of the value of his home, which he bought in 2016 for $85,000.
The property was worth around $135,000 a month ago, according to an estimate by Zillow. The lack of transactions since then makes a current estimate difficult.
“I will never get that. I’ll be lucky to get what I paid for it, if that,” he said of the estimate. Plus, Stewart thinks it would be very expensive to do the repairs and testing to make sure the house 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 everything is okay?”
Stewart isn’t alone in being angry with Shaw and Norfolk Southern for the railroad’s refusal to offer to compensate the community for the value of property that was destroyed by the derailment.
During Thursday’s Senate hearing into the crash, Sen. Ed Markey, a Democrat from Massachusetts, asked Shaw four times to pledge to indemnify the owners, only to hear Shaw respond repeatedly: ” Senator, I pledge to do what is right.”
Markey said that was not an acceptable answer.
“Will you commit to ensuring that these families, these innocent families do not lose their life savings in their homes and small businesses? The right thing to do is to say, “Yes, we will.” “Markey told Shaw. “These families want to know in the long term if they are just going to be left behind. Once the cameras are on, once the national attention fades, where will those families be? I think they’re going to be in the crosshairs of the Norfolk Southern accountants saying, ‘We’re not going to pay the full compensation.
Paying owners and businesses would not necessarily be difficult for Norfolk Southern.
With a population of around 5,000 people, there are around 2,600 residential properties in eastern Palestine according to Attom, a property data provider. The average property value there in January of this year, before the derailment, was $146,000, according to Attom.
Taken together, the value of all residential real estate in the city is approximately $380 million, including single-family homes and multi-family properties.
These values represent only a fraction of the money that Norfolk Southern earns. Last year, it reported record operating profit of $4.8 billion and net profit of $3.3 billion, up about 9% from a year earlier. It had $456 million in cash on its books as of December 31.
He returned much of that profit to shareholders, repurchasing $3.1 billion in stock last year and spending $1.2 billion on dividends. And he announced a 9% increase in dividends days before the crash.
A year ago, its board approved a $10 billion share buyback plan, and it had the authority to buy $7.5 billion of what remained on the plan as of Dec. 31. .
Asked by Sen. Jeff Merkley, a Democrat from Oregon, during Thursday’s hearing, “will you commit to not repurchasing any more stock until a series of security measures have been taken to reduce the risk of future derailments and accidents,” Shaw again dodged the question, answering only, “I am committed to continuing to invest in safety.”
And the company also invests a lot of money in lobbying, spending $1.8 billion on lobbying in 2022, according to OpenSecrets.org, which tracks spending on lobbying and political contributions.
These lobbying expenses were also attacked by senators during the hearing, especially since Shaw would not commit to supporting the bipartisan bill introduced in the Senate since the derailment to improve rail safety. When asked whether he would support or oppose the legislation, Shaw would not approve of all provisions of the bill, but he replied “we are committed to the legislative intent to make rail safer “.
A big payout probably isn’t what many are looking for in eastern Palestine, said Jim Warren, director and co-owner of Kelly Warren and Associates Real Estate Solutions, in Boardman, about 15 miles from eastern Palestine. They just want a home that’s safe to live in and that’s worth it, he said.
“People here don’t want much,” he says. “We don’t chase flashy items like 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.
This area, like the rest of the country, has seen the real estate market heat up over the past few years with multiple offers of homes and properties selling above asking price. But, Warren said, unlike other parts of the country, the market remains fairly stable in this part of Ohio.
“Our area doesn’t go up as much and it doesn’t go down as much,” he said. “We don’t have the big swings.”
Warren’s business currently has two listings in the city.
“It’s neither more nor less than usual,” he said. There are only about ten properties on the market there, he said.
But, he added, “if your property is contaminated, that’s a concern for you and for any buyer.”
As with any real estate purchase, valuation and security testing should be carried out for homes in Eastern Palestine. But like Stewart, Warren said it was not yet clear who would pay for the additional water and soil contamination testing for that peace of mind.
“As far as we know, the county could cover it, 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, we expect steady growth,” he said. “After all the hype is gone, we still live here. We’re going to have to figure it out because it’s our home.