Citing “baseless” claims of environmental impact, the NAHB celebrated a June decision by the U.S. Supreme Court that will grant Clean Water Act permitting authority to Arizona's state government.

Until June, the EPA was in charge of reviewing all stormwater discharge permits filed by builders and developers in Arizona, the most common environmental permit sought, says Duane Desiderio, NAHB staff vice president for Legal Affairs. Builders often faced long delays and sometimes additional costs due to the EPA reviews, which included studying impacts on endangered species, Desiderio says.

After the cactus ferruginous pygmy owl was removed from the federal list of endangered species in April 2006, the EPA decided to shift Clean Water Act permitting authority to Arizona, making it the 45th state to take over that permitting activity.

BUILDERS 1, OWLS 0: Builders rejoiced following a U.S. Supreme Court ruling that removed the EPA  from Clean Water Act permitting in Arizona.
BUILDERS 1, OWLS 0: Builders rejoiced following a U.S. Supreme Court ruling that removed the EPA from Clean Water Act permitting in Arizona.

But Defenders of Wildlife, a Washington-based environmental group, filed suit trying to force the EPA to maintain control of permitting, saying that the government should never have given the state that authority, because the EPA had not done an impact study on the effects of development on endangered species, such as the pygmy owl.

The NAHB joined the suit on the EPA's behalf, arguing that the Clean Water Act is separate from the Endangered Species Act, and that as long as Arizona met the nine criteria required to take over permitting authority, it should be given that authority.

“If you look at the requirements set forth in the Clean Water Act, endangered species concerns are not a prerequisite,” Desiderio says. “The point of the Clean Water Act is to protect and preserve water quality. Endangered species concerns are not listed among those.”

The Clean Water Act does take into account species living in water, such as fish, but not species that may require access to water, but are not living in it. The environmental groups argued those species, such as the pygmy owl, should be taken into account and that the EPA was the organization to run the permitting program. But the Supreme Court disagreed, ruling in favor of the EPA and the NAHB.

For builders, the decision clears up “significant concerns about how the stormwater program was being administered by EPA,” says Tim White, general counsel and executive vice president for Meritage Homes Corp., based in Scottsdale, Ariz. Meritage, which ranks No. 12 on the 2006 BUILDER 100, builds in multiple Arizona markets.

“The EPA was often times unable or unwilling to timely process and respond to requests for stormwater permits and often times extracted or sought to extract unreasonable concessions from builders,” White says in an e-mail to BUILDER.

The decision to put permitting in the hands of state officials should avoid unnecessary delays and costs, which builders had been dealing with, White says. In turn, the expedited permitting will “assist home builders in efforts to control the cost of housing,” White says.

In a statement heralding the decision, the NAHB quotes a U.S. Fish and Wildlife Service report that estimates Endangered Species Act consultations for the pygmy owl could delay development five to 18 months and cost between $1.7 and $2.7 million for onsite mitigation and project modifications. The study was released in 2002, and its cost estimates likely overstate the impact on builders, Fish and Wildlife Service public outreach specialist Jeff Humphrey says.

Still, the hassle builders faced from intensive environmental surveys meant to protect the pygmy owl and other at-risk species in Arizona, particularly the Southern parts of the state, was well known and much lamented. Now, those surveys will no longer be mandated by the EPA. But there are still protections in place geared towards animal species, Desiderio says.

“If you are dealing with a species in a wetlands and you need a permit from the Army Corps of Engineers to impact that wetland, there will be a consultation between the Army Corps of Engineers and the federal wildlife agencies over the impact on species living in that wetlands,” Desiderio says. “That still exists.”

Learn more about markets featured in this article: Phoenix, AZ.