The U.S. Environmental Protection Agency (EPA) is reviewing the definition of “Waters of the United States” (WOTUS) under the Clean Water Act (CWA) in an effort to reduce permitting costs for developers. The announcement came as part of a series of regulatory updates made by the EPA last week, with Administrator Lee Zeldin emphasizing the goal to streamline processes for developers seeking to build on land covered by WOTUS regulations.

The revision aims to cut down on the expenses developers face when navigating the permitting process for projects on land that falls under these rules. Zeldin explained the agency’s intention in a news release: “We want clean water for all Americans supported by clear and consistent rules for all states, farmers, and small businesses.” He also noted that the current WOTUS definition, under the Biden administration, has driven up business costs.

Industry reactions have been positive, especially from multifamily housing organizations that have been impacted by regulatory burdens. The National Apartment Association (NAA) was among those who praised the EPA's move.

“Boosting the nation’s housing supply has simply never been more important than it is today, especially as multifamily permits and starts are dropping across the country,” said Nicole Upano, assistant vice president of housing policy and regulatory affairs for the NAA, speaking with Multifamily Dive.

The National Multifamily Housing Council (NMHC) also expressed optimism about the potential benefits of the review. “This issue has long been an unnecessary barrier to new development and we are optimistic that EPA’s work will increase certainty for property owners and decrease compliance costs – ultimately lowering housing costs for rental housing providers and residents,” said Colin Dunn, NMHC’s vice president of public affairs and communications, in a statement to Multifamily Dive.

EPA’s Efforts to Align with the Supreme Court’s Ruling

The revision of the WOTUS definition is expected to align with the Supreme Court’s May 2023 ruling in Sackett v. Environmental Protection Agency. In this decision, the Court clarified that the term “waters” under the Clean Water Act applies only to permanent, standing, or continuously flowing bodies of water such as streams, rivers, oceans, and lakes. The Court also determined that wetlands would only be protected if they have a continuous surface connection to these other protected bodies of water.

In the wake of this ruling, the EPA intends to revise its rules to reflect this interpretation. This review could provide more clarity and certainty for developers and property owners who have faced challenges with inconsistent interpretations of WOTUS regulations.

Impact on Housing Development

Housing organizations have long expressed concerns about the impact of environmental regulations, including the WOTUS definition, on the affordability and availability of housing. Recently, several housing groups called on Congress and the White House to review various regulations that affect the industry. This includes addressing issues related to the Clean Water Act and the WOTUS definition, which have raised concerns about rising development costs.

The National Association of Home Builders (NAHB) also voiced concerns during a Senate Committee on Environment & Public Works hearing on February 25, where they testified about how environmental regulations contribute to increased permitting and housing costs. In response, the NAA and NMHC have urged federal agencies to reconsider several rules, including those related to the Clean Water Act, that may be hindering housing development.

Future Implications for Development

The potential revision of the WOTUS definition could have wide-reaching implications for developers and builders across the country. By reducing regulatory burdens and providing clearer guidelines, the EPA aims to foster an environment more conducive to housing development, which is crucial as the nation faces an ongoing housing shortage.

The EPA’s review of the WOTUS definition signals a shift in how the federal government may approach environmental regulations, particularly with respect to the impact on the development sector. If successful, the revision could lead to lower costs for housing developers and, ultimately, reduced housing prices for consumers. As the review progresses, many in the housing industry will be watching closely to see how the agency moves forward and what changes may be implemented.

Originally reported by Mary Salmonson in Construction Dive.