Water Works Home builders looking for clarity regarding Clean Water Act regulations got a step closer March 8 when the 9th Circuit U.S. Court of Appeals reversed a lower court ruling in San Francisco Baykeeper vs. Cargill Salt Division, and decided that a pond is not subject to the Act. The NAHB submitted an amicus brief in the case, and NAHB president Brian Catalde cheered the decision. “These regulatory burdens translate into expenses that increase the price of homes. We need to stop this bureaucratic expansion on behalf of our home buyers,” Catalde says. In Baykeeper, the district court had ruled in 2006 that a holding pond used to deposit waste saltwater from Cargill's salt-making business was subject to regulation under the Act because it is next to Mowry Slough, a navigable tributary of the San Francisco Bay. However, an earthen berm separates the pond from Mowry Slough. “We conclude that mere adjacency provides a basis for [Clean Water Act jurisdiction] only when the relevant water body is a ‘wetland,'” Judge William C. Canby Jr. says.
Rental Revival The rental apartment market shows signs of rebounding following the condo construction and conversion exuberance of recent years. The return of developers to the market-rate apartment sector—the low-rent government subsidized apartment sector never really faltered—is being fueled by increased household demand for rental units and depleted supply due to the earlier conversion of rental apartment buildings to condominium ownership. “We are forecasting that the rental and for-sale sectors of the multifamily market will rebalance during the next two years, with about one-third of multifamily starts representing condos and nearly two-thirds representing rentals by the end of 2007,” says David Seiders, the NAHB's chief economist. “Last year, the for-sale market had grown to represent nearly half of all multifamily starts, a record share, and a correction now is under way.”
Good Signs Condo builders reported somewhat better market conditions in the fourth quarter of 2006 than in the previous quarter, according to the latest results of the NAHB's Multifamily Condo Market Index released in early March. The current-conditions index remained substantially lower than it was at the same time last year, but builders and developers are more optimistic about what they think the condo market will be doing six months out. Traffic of prospective buyers also rose slightly from the previous quarter. “The condo market is coming back toward balance following the previous four quarters when the pendulum swung from red-hot to seriously cold,” says NAHB chief economist David Seiders. “What we are looking for—and likely to find in 2007—is a healthy and sustainable level of condo production.”