Business has been slow lately for Earl E. "Gene" Preston Jr. In better times, the Fallston-based contractor said, he had about 15 workers servicing and installing septic systems for homes and businesses beyond the reach of public sewer in the Baltimore metropolitan area.
Lately, though, with the real estate slump dragging on and harsh winter weather hindering what little construction there is, Preston said, he has had to lay off five of his employees. He is worried he may have to let more go if legislation backed by Gov. Martin O'Malley passes that would either bar or raise the cost of building new homes on septic systems across Maryland.
The governor has called for a ban on new developments of five homes or more on septic systems. For single homes or smaller developments built off public sewers, he's also pushing for the use of more costly but less-polluting septic systems. The changes are needed, O'Malley says, to help restore the Chesapeake Bay and to slow the loss of the state's farmland.
But to Preston and others involved in building and selling homes in rural areas — and even in the outskirts of metropolitan areas like Baltimore — the push by the governor to clamp down on septic systems represents a threat to their livelihoods.
"It appears they want to just stop building," Preston said this week as he watched his workers filling in the trenches they'd dug for a new septic system to serve a five-bedroom home being built in northern Baltimore County. "We're a long way from the bay here."
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.
New housing starts likewise remain depressed. Tom Farasy, past president of the Maryland State Builders Association, told lawmakers Wednesday that there were just 8,400 single-family building permits issued statewide last year, off nearly half from the number of new homes built annually in the housing industry's heyday. Farasy, a Prince George's County builder, predicted that with foreclosures still depressing the real estate market, it may be two years yet before the industry rebounds.
Preston, who has been in the septic tank business for 40 years, said he's hanging on, but his business has changed over the years. His work has shifted from primarily installing new septic systems to repairing and servicing existing ones, he said.
"We're lucky enough to have some work," he said, but it's "certainly off what we normally do."
If a ban on major new housing developments passes, Preston said, it could reduce even further the septic installations he does in Harford, Baltimore, Cecil and Carroll counties. Major portions of those counties are not served by public water and sewer, and are unlikely to be.
"So [O'Malley's] going to keep everybody around Towson," Preston said of the governor's stance that large new housing developments should only be built on public sewer, or with special, shared waste-treatment systems that are approved and regulated by local and state government.
The governor insists he's not out to halt development in the state, but to make it more sustainable, environmentally and fiscally. Housing built on septic systems is a significant and growing source of pollution fouling the bay, he said.
"What good is a property if it sits on a dead river?" O'Malley asked Monday in defending his stance. "What good is a town on a river where fish no longer live? How valuable a state do we have if the bay dies?"
An estimated 430,000 septic systems already are in the ground across Maryland, and officials say that they are responsible for leaking 4 million pounds of water-fouling nitrogen annually into the state's streams, rivers and ultimately the bay. Officials project that as many as 145,000 more septic systems could be installed in the next 20 years, if home construction recovers to anything like what it used to be.
A septic system collects the solids from domestic sewage and kills disease-causing bacteria, but it allows much of the nitrogen in the treated wastewater to leach into nearby streams or ground water.
Households on conventional septic systems release up to 10 times as much of the pollutant into nearby waters as do households connected to much more efficient sewage treatment plants, state environmental officials say.
All the state's septic systems together account for about 8 percent of all the nitrogen getting into the bay and its tributaries, officials estimate. But their impact is greater in some areas where there's been a lot of waterfront and near-shore development. In Anne Arundel County, which with 43,000 septics, the most of any county in the state, they produce 35 percent to 40 percent of the nitrogen getting into local waters, Ronald Bowen, the county's public works director, told a House committee Wednesday.
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.
The bill backed by the governor is sponsored by Del. Stephen W. Lafferty, a Baltimore County Democrat, and by Sen. Paul G. Pinsky, a Prince George's County Democrat. Should it fail to overcome opposition from real estate interests and rural officials, there's a second measure pending. That bill, also sponsored by Lafferty and by Sen. Brian E. Frosh, a Montgomery County Democrat, would require less-polluting septic systems for all new homes built in the state, regardless of the size of the development.
Lawmakers narrowly agreed two years ago to require advanced septic systems on all new homes built near the bay, and whenever an existing home needs to replace a failing system. The advanced septic systems remove twice as much nitrogen as do conventional systems, but cost up to $13,000 to install — generally far more than what a conventional septic does. They also cost $200 or more a year to run and maintain.
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.
Something more has to be done to reduce the nitrogen leaking from all the existing septic systems, O'Malley administration officials and environmental advocates say. But in the meantime, they note, the bills being considered by lawmakers would at least minimize the growth in pollution from septic systems as more homes are built in years to come.
Del. Maggie McIntosh, chairwoman of the House Environmental Matters Committee, said Wednesday she'd learned that farming and fishing also account for about a fifth of the state's economy, on par with real estate. A Democrat from Baltimore City, where everyone is on public sewer, she suggested that legislators need to consider other sectors of society as well in weighing their shared responsibility for helping to clean up the bay.
"It's a delicate balancing act we have here," she said.