Housing Groups Disappointed in New Clean Water Act Rule

Leading housing groups are disappointed in the Administration’s rulemaking that defines “waters of the United States” (WOTUS) under the Clean Water Act (CWA).

The rule was issued by the Environmental Protection Agency and the Army Corps of Engineers Dec. 30. It continues to rely on a legal theory of CWA federal jurisdiction known as the “significant nexus test” to potentially assert federal control over isolated wetlands, features that contain water only in response to rainfall events, and ephemeral streams impacting numerous activities, including home building.

National Association of Homebuilders (NAHB) called the nexus test, “confusing” and “flawed.”

The test’s results are determined by a federal regulator who decides whether a specific feature, along with similarly situated features located across an entire watershed, significantly affects the chemical, physical, or biological integrity of traditional navigable water, NAHB wrote in response.

“In practice, the significant nexus test has proven extremely difficult to apply consistently in the field, leaving developers and builders unable to discern for themselves which isolated wetlands, ephemeral streams, or even human-made drainage features, like roadside ditches, are federally jurisdictional under the CWA,” the NAHB said.

The new rule is scheduled to take effect in late February or early March and “radically” extends the areas in which home builders are required to get federal permits compared to the prior rule finalized during the Trump administration, according to NAHB.

It also perpetuates “regulatory barriers to affordable housing as single-family and multifamily developers struggle to find the developable land necessary to produce the new affordable housing units this nation desperately needs” as well as “generate bureaucratic and project delays, raising housing costs.”

The groups said that ideally, the Administration would wait for a ruling on the issue from the Supreme Court in the coming months. The case – Sackett v. EPA – is “squarely focused on the legality of the significant nexus test, which is a critical part of the final rule,” NAHB said.

Housing Groups Call It ‘Federal Overreach’

The National Multifamily Housing Council (NMHC) and the National Apartment Association (NAA) said in a release that, “while the apartment industry strongly supports protecting our water resources, we cannot support the changes issued by the EPA.

“This federal overreach will greatly expand the universe of properties, including many with only a tenuous relationship to a body of water, required to seek very expensive federal permits to develop or redevelop housing.

“Furthermore, [the regulatory hurdles it creates] are an expensive, but unnecessary overlay, given that states and localities have their own water protection rules,” NMHC and NAA said. “If the U.S. hopes to address our affordable housing crisis, we need smart regulation.”

Research by NMHC and NAHB finds that regulations account for 40% of multifamily development costs.