WOTUS Rule Hurts Housing Affordability, Builders Tell Congress

The National Association of Home Builders (NAHB) told Congress today how the Biden administration's latest interpretation of the waters of the United States (WOTUS) rule has further muddied the regulatory process and exacerbated the housing affordability crisis.

The Supreme Court last year issued a decision in Sackett v. Environmental Protection Agency (EPA) that redefined the scope of the Clean Water Act and compelled the EPA and the U.S. Army Corps of Engineers to provide additional regulatory guidance for builders and developers.

"The federal agencies are not faithfully adhering to the Supreme Court's holdings, and the regulated public has been stiff-armed on implementation guidance," Vince Messerly, president of the Streams and Wetlands Foundation, a non-profit wetlands mitigation bank based in Ohio, testified before a congressional panel.

As a mitigation banker working in partnership with home builders to navigate the Clean Water Act's Section 404 permitting process, Messerly told lawmakers that uncertainties and delays in permitting are increasing housing costs and causing developers and builders to abandon projects at a time when more housing is desperately needed to address America's affordability challenges.

"The residential construction industry and others in the regulated community continue to experience prolonged and opaque permitting processes, which makes it more difficult for home builders to provide homes or apartments at a price point attainable for most households," said Messerly. "Consequently, this unpredictable regulatory environment that builders and developers are forced to operate under will make home building more inefficient and costly and ultimately worsen our nation's housing crisis."

The Supreme Court's Sackett decision made clear the federal government only has authority over relatively permanent waterbodies. But the Biden administration failed to provide a definition of a "relatively permanent" waterbody. Furthermore, the administration's revised WOTUS rule fails to exclude from federal jurisdiction all "ephemeral features," which only possess water following a rainfall event.

By using undefined regulatory terms such as "relatively permanent water body" and "continuous surface connection" to connect isolated wetlands to a WOTUS via ditches, swales and pipes, Messerly said "it is evident that the agencies are not faithfully implementing the Supreme Court's directives. If home builders and the residential construction industry cannot understand the regulatory framework under which to operate, how can we expect to achieve housing production to address our national affordability crisis?"

With the EPA and Army Corps of Engineers blatantly overstepping their federal authority regarding jurisdictional waters of the U.S., NAHB is urging Congress to consider the following improvements to the Clean Water Act Section 404 permitting process:

• If the agencies continue to refuse to provide regulatory definitions for either relatively permanent water or continuous surface connection, Congress must step in and define these terms. Or conversely, lawmakers should identify features that cannot by statute be considered either of those two terms, such as:
  • Ephemeral features that only flow in direct response to a rainfall event;
  • Man-made features (i.e. pipes, ditches, culverts, etc.) used to connect otherwise isolated wetlands to jurisdictional features; and
  • Groundwater, including shallow subsurface flow.
• Congress must ensure the agencies prioritize responding to jurisdictional determinations to process requested Clean Water Act Section 404 permits in a timely manner.
• Regulatory changes to the definition of WOTUS should not invalidate an approved jurisdictional determination during its lifespan. With each administration crafting their own WOTUS rule, home builders who may have held approved jurisdictional determinations from a prior administration have had their validity denied not because of changes in the environmental conditions found on their property, but rather due to court rulings or changes in a new administration's priorities.