Many American cities, especially those in the Upper Midwest, are facing an impending financial problem hiding beneath their streets: Aging water service lines made of lead are running into houses and apartment buildings. New state and federal laws encouraging or mandating more rapid replacement of lead service lines (LSLs) rarely include sufficient funding to accomplish the work. Cities will likely have to pay for a significant chunk of costs that experts have told us may total between $45 billion and $100 billion nationwide.
Despite evidence that there is no safe amount of lead exposure in drinking water, there’s still work to be done to replace lead service lines (LSLs) in many American communities. What holds back progress, and what will it take to remove all LSLs? Staff at the Chicago Fed found two common barriers: the split ownership structure of LSLs and the resulting coordination challenges, and a lack of clear financial benefits for those who have the power to replace LSLs. Cities with full LSL replacement programs (Flint, MI, Benton Harbor, MI, Madison, WI, Galesburg, IL, Newark, NJ) offer lessons on how to overcome these barriers and enable a faster pace of replacement.
An estimated to 12 million lead service lines (LSLs) supply water to homes in the United States, potentially exposing people to lead and endangering their health. For children, the consequences are even worse. Although the only way to eliminate lead exposure from LSLs is to replace them with new pipes, replacement has been slow, sporadic, and typically occurred in response to a lead-contamination crisis. New funding and recent changes to laws may spur proactive rapid replacement, presenting new economic and financial challenges. Given the critical nature of this issue, especially in the Upper Midwest, staff at the Federal Reserve Bank of Chicago are working to advance understanding, as well as analyze potential solutions.