Norfolk Southern announces details of plan to pay for lost home values because of Ohio derailment

Norfolk Southern announced new details Monday about its plan to compensate East Palestine residents for lost home values since the fiery derailment disrupted life in the eastern Ohio town in February.

The railroad's program will no doubt be welcomed by some people who want to sell their homes and move away from the town rather than deal with the lingering health worries. But some critics say the railroad should be doing more to address those health concerns instead of worrying so much about economic recovery in the area.

And the details are still tentative because the Ohio Attorney General's office is still negotiating an agreement that will create a long-term fund to compensate homeowners along with two other funds to pay for any Health problems or water contamination issues that crop up down the road. The Attorney General's office said it's not clear when those funds will be finalized because of all the unanswered questions at this stage.

Already, the railroad estimates that the cleanup will cost more than $800 million, which includes $74 million that Norfolk Southern has pledged to East Palestine to help the town recover. That total will continue to grow as the cleanup continues, the funds are finalized and various lawsuits move forward. The railroad will also get compensation from its insurers and likely other companies involved in the derailment.

“This is another step in fulfilling our promise to East Palestine to make it right. Norfolk Southern is steadfast in keeping our commitments, including protecting the home values of the community,” said CEO Alan Shaw, who is working to improve safety on the railroad. “This program aims to give homeowners the reassurance they need.”

The new program will pay homeowners in East Palestine and the surrounding area about five miles around the derailment the difference between the appraised market value of their homes and the sale price. But accepting compensation through the program will require homeowners to forego property damage claims they might eventually collect as part of one of the lawsuits against the railroad.

Texas Sen. Ted Cruz, a Republican, praised the railroad for following through on the commitment it made in the spring. “I intend to keep the pressure on Norfolk Southern to make things right for the community,” he said.

JD Vance, one of Ohio's U.S. Senators who proposed a package of railroad safety reforms after the derailment that is still awaiting a vote, said he remains skeptical of Norfolk Southern.

“My expectations that they will deliver on their promises are low,” said Vance, a Republican. “I will continue to hold the railroad and its backers in Congress accountable for the promises they made to Ohioans."

Longtime East Palestine resident Jami Wallace, who still hasn't moved back home since the derailment, said she and the Unity Council group she helps lead are much more focused on residents' health instead of things like home values, even though the government and railroad continue to insist that ongoing tests of the air and water in the area don't show concerning levels of chemicals.

Plus, she said “a lot of our most vulnerable are the people that rent,” so this program to help homeowners won't do much for them.

“Human health should just come first,” Wallace said.

And getting answers to the community's questions about potential Health problems is the priority for Wallace, who is frustrated that she has been unable to persuade the EPA to conduct detailed testing inside her home's basement.

Besides, people who have lived in town for generations aren't eager to sell their homes anyway. They just want to know if their homes are safe.

“It’s not just about selling the house and being able to move to another house. We don’t want to move," Wallace said.