Baltimore Sun Article Examines Economic Impact of Proposed Septic Ban

A reoccurring topic being addressed during the 2011 General Assembly is the state’s septic systems and its  impact on the health of the Chesapeake Bay Watershed.  Septic systems, which collect solids from domestic sewage and kill disease-causing bacteria, contribute 8% of all nitrogen found in the Bay and its tributaries.  Legislation sponsored by Delegate Stephen W. Lafferty and Senator Paul G. Pinsky and backed by Governor O’Malley, would raise the cost or bar building new homes on septic systems.  While many debate the environmental implications of septic systems, Timothy Wheeler of the Baltimore Sun considers the economic impact the proposed legislation would have on the state’s struggling real estate market.

The prospects of a septic crackdown by the General Assembly are particularly chilling for an industry that has yet to recover from the real estate collapse that drove Maryland and the rest of the nation into recession.

“That industry’s hurting right now,” says Anirban Basu, chief executive of Sage Policy Group, a Baltimore economic consulting firm. As much as 20 percent of the state’s economy is tied to real estate, construction and related financial activity, he estimates.

Nearly 36,000 people were employed in Maryland in construction alone at the end of last year, according to the Bureau of Labor Statistics. That’s nearly 8 percent more jobs than the year before but still nearly 16 percent below the number in construction at the end of 2007. Specialty trade contractors are off 26 percent from three years ago, and real estate sales and leasing jobs also are down.

Though weakened economically, the real estate industry has wielded substantial political clout in Annapolis in years past. Twelve years ago, a bill pushed by then-Gov. Parris N. Glendening to require less-polluting septic systems died without even coming to a vote.

Builders, real estate agents and local officials also object to mandating advanced septic systems statewide. They warn that the added costs could make houses less affordable.

The state has a fund, financed by annual $30 payments from every homeowner on septic systems, to help homeowners pay the extra upfront cost of putting in an advanced system. But the fund is only enough for about 600 systems a year, many of them emergency replacements of failing septics that are backing up untreated sewage in people’s yards.

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