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The NAHB, National Apartment Association (NAA), and National Multifamily Housing Council (NMHC) expressed disappointment with the U.S. Environmental Protection Agency (EPA) and the U.S. Department of the Army’s decision to redefine and expand the definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA). According to the EPA, the definition helps restore “essential water protections that were in place prior to 2015” under the CWA. The EPA says the updated regulation will strengthen fundamental protections for waters that are sources of drinking water “while supporting agriculture, local economies, and downstream communities.”

The EPA says the final rule establishing a durable definition of WOTUS returns to “a reasonable and familiar framework” founded in the pre-2015 definition, with updates to reflect existing Supreme Court decisions, the latest science, and the U.S. Department of the Army’s technical expertise. The rule establishes limits “that appropriately draw the boundary of waters subject to federal protection.”

The CWA prohibits the discharge of pollutants from a point source into “navigable waters” unless otherwise authorized. WOTUS is a threshold term establishing geographic scope of federal jurisdiction under the CWA.

The NAHB called the expanded definition of WOTUS under the CWA “a blow to affordability and regulatory certainty” for builders and other stakeholders. The NAHB opposes the final rule’s continued reliance on the federal jurisdiction known as the “significant nexus test” to potentially assert federal control over isolated wetlands and ephemeral streams impacting numerous activities, including home building. The NAHB said the “significant nexus test” has proven “extremely difficult to apply consistently in the field,” leaving builders and developers unable to determine which isolated wetlands, ephemeral streams, or human-made drainage features are federally jurisdictional under the CWA.

“Rather than providing clarity and certainty for home builders and other affected stakeholders, this definition of WOTUS adds uncertainty and confusion to the regulatory process, raises housing costs, and drastically increases federal overreach in the process,” NAHB chairman Jerry Konter said in a statement published by the NAHB.

The NAHB said the new WOTUS rule “radically extends” the areas in which home builders are required to get federal permits and will result in continued regulatory barriers to affordable housing.

In a joint statement, the NAA and NMHC said the expanded definition represents a “federal overreach” that will “greatly expand the universe of properties, including many with only a tenuous relation to a body of water, required to seek very expensive federal permits to develop or redevelop housing.” The NAA and NMHC noted the additional hurdles will create permitting delays, add development costs, and create additional legal risks that “will exacerbate the nation’s housing affordability crisis.”

“Simply determining whether a property needs a federal permit is an expensive endeavor,” the NAA and NMHC said in the associations’ joint statement. “Furthermore, they are an expensive, but unnecessary overlay given that states and localities have their own protection rules.”

The NAA, NMHC, and NAHB cited an upcoming Supreme Court ruling under Sackett v. EPA that is focused on the legality of the significant nexus test, which is a critical part of the final rule. The NAA and NMHC said the timing of the new ruling will require businesses to spend “significant time and resources to comply with a rule that may be inconsistent with the Supreme Court’s decision expected in a matter of months.”

“The new rule will go into effect in late February or early March, and the Sackett verdict could be issued before the rule is even implemented or a few short weeks thereafter,” the NAHB said in its statement. “A victory for Sackett would force the EPA and [the U.S. Department of the Army] to go back to the drawing board on WOTUS.”