After Firestone Explosion, Residents Worry About Home Values
When a home went up in flames on Twilight Avenue in April, in a subdivision north of Denver, two people died. Now, the investigation into what happened is underway, clean-up is ongoing, lawsuits are being filed and residents 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 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 her parents' place in Chicago. They got even more worried when a few weeks after the home blew up, state officials announced that they’d found another pocket of gas, this one right behind the Bullers house. That same day an oil tank exploded a few miles away, killing a worker.
Aimee Bullers wants to leave her neighborhood but doesn’t think her family can afford to move.
This part of Northern Colorado 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. The second somebody says, ‘Oh, Twilight,’ you’re like, yup. You’re the house that exploded,” Bullers said.
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. ... So if there is a theme to this case for me is, there are things that can interrupt the American dream. What will the law allow us to do to get them back to where they would have been but for the accident?” Kuykendall said.
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 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 all sorts of accidents from construction defects to oil and gas incidents. Residual stigma is a technical valuation 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."
In 2010, a natural gas utility pipeline exploded in San Bruno, Calif., 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. ... Stigma in particular is as much about fear as actual science,” Throupe said.
Throupe has found that stigma tends to stick around longer when there’s an investigation or multiple incidents, as is the case in Colorado. Still, there’s a lot of uncertainty about how the housing market in Firestone 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 is 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 that meeting about a potential lawsuit over home values. Lawyers say several more have expressed interest since.