A home went up in flames in April on Twilight Avenue north of Denver, killing two people. Now, the investigation into what happened is underway, clean-up is ongoing, lawsuits are being filed and people who live in that small community are worried- not only about their safety but about the value of their homes.
The explosion was caused by a small pipeline leaking gas into the home, owned by oil and gas giant Anadarko. In this part of Colorado, energy infrastructure like that is everywhere.
“I don’t want to live there anymore. I have two kids,” Aimee Bullers said, through tears, at a recent meeting between residents and lawyers about a potential lawsuit over loss in home values.
The Bullers pulled their kids out of school after the accident and Aimee took them to stay with her parents in Chicago. They became even more worried a few weeks after the home blew up when state officials announced that they’d found another pocket of gas – right behind the Bullers house. That same day, an oil tank explosion killed a worked a few miles away.
Aimee Bullers wants to leave her neighborhood, but doesn’t think her family can afford to move. This part of northern CO is one of the fastest growing metro areas in the country. Home values have gone up 11 percent over the past year alone, and the Bullers don’t think they’d be able to sell their home right now anyway.
“We live on Twilight… there’s a stigma,” Bullers said. “You’re the house that exploded.”
Rick Kuykendall, a Miami-based attorney specializing in environmental litigation, led the meeting. Years ago, he represented Gulf Coast homeowners after the BP oil spill.
“If one thing came out of that meeting tonight, it was this: people are afraid. And they’re unsure and they’re uncertain, and that is a bad place to be,” Kuykendall said. “What will the law allow us to do to get them back to where they would have been but for the accident?”
A 2013 study by Ron Throupe, a University of Denver real estate professor, found that just living near oil and gas development can bring down home values. He found the values dropped anywhere from five percent in Texas, up to 15 percent in Florida, depending on proximity to and familiarity with drilling.
Throupe also assesses damage related to accidents from construction defects to oil and gas incidents. “Residual stigma“ is technical term that describes “an additional loss, over and above actual clean-up costs, which a property suffers as a result of risks and other residual characteristics.”
For example, in 2010, a natural gas utility pipeline exploded in San Bruno, CA, killing eight people. The real estate market there froze, as one agent put it. Data shows that sales fell and listings expired.
“What it comes down to is even after clean up, cure, the prices do not come back fully to market expectations,” Throupe said. “Stigma in particular is as much about fear as actual science.”
He found that stigma tends to stick around longer when there’s an investigation or multiple incidents, as is the case in Colorado. Bill Mundy, a valuation expert, and Ron Throupe’s mentor, lays out specific criteria for ‘stigma’:
Although the home explosion in Firestone fits into most of these categories, there is still a lot of uncertainty about how the housing market there will react. Operators have been drilling in the area for a long time, but it’s new for so many people to be living so close to oil and gas.
Greg Zadel of Zadel Realty has lived and worked in Firestone for his whole life. In fact, he’s in the process of selling a home in Oak Meadows right now. So, he won’t predict the future but notes that inventory is low– there aren’t many homes for sale – and there is a lot of demand.
“Every home comes down to a very emotional purchase for most every buyer. They all have their own hot buttons as to what they want, what they don’t want, and what they feel comfortable with,” Zadel said.
Meanwhile, current residents are installing gas monitors and waiting for answers. Around 30 people showed up to the meeting about a potential lawsuit over home values. Lawyers say several more have expressed interest.
- How did this happen? Check out Inside Energy’s timeline of events.
- Stay tuned for more on this story from Inside Energy in collaboration with the PBS Newshour.