Document Z4w2wQd3KGL5k6VZ4kdQvmVGV

National Wetlands Newsletter, Vol. 37, No. 4, Copyright 2015 Environmental Law Institute Washington, DC, USA Taking Notice of WOTUS: A Home Building Industry Perspective On June 29, 2 015, the U.S. Environmental Protection Agency and the U.S. Army Corps o fEngi neers published a fin a l rule that changes the regulatory definition o f "waters o f the United States" for the fir st time in nearly 3 0 years. The new rule expands federal jurisdiction under the Clean Water A ct an d introduces new concepts an d definitions that w ill be burdensome to home builders, decrease housing affordability, and do little to protect the environment. By O w en M cD onough T he Clean W ater Act of 1972 (CWA) gives the fed eral governm ent au thority to regulate "navigable waters," w hich are defined by the statute as simply "waters of the U nited States" (W O T U S ), U nfortunately, determ ining what constitutes W O TU S and in turn the scope of federal jurisdiction has not been easy or predictable. A nd while two U.S. Suprem e C o u rt cases, Solid Waste Agency of Northern (Sook County v. U.S. A rm y Corps o f Engineers1 and Rapanos v. U nited States,' have m ade it clear that there are lim its to federal au th o rity und er the CW A , perhaps the only th ing all parties agree on is th a t the 1986 regulatory defini tion of W O FUS is too vague. The result has been confusion, inconsistent application, questionable jurisdictional calls, and delayed decisionmaking. Since these Supreme C ourt decisions, the U.S. Envi ro nm en tal P rotection Agency (ERA) and the U.S. A rm y Corps of Fmgineers (the C orps)-- the federal agencies with joint authority to adm inister the CWA---have m ade several attem pts to address the confusion by issuing interim guid ance and agency directives. Unfortunately, the im plem enta tion of these interpretive tools has proven burdensom e and unpredictable. At the same time, the underlying uncertainty persists, leaving home builders, developers, and other stake holders at a loss for know ing w hether or not their land con tains federally protected areas. A fter publishing a proposed rule to redefine W O T U S in April 2014 and receiving over one m illion comments, the agencies published a final rule on June 29, 2015. The agencies claim the rule provides clarity and does not expand federal jurisdiction. Regrettably7, the rule misses the m ark. Under the new rule, all "tributaries' are categorically jurisdictional. The agencies have defined tributary broadly to include any feature th a t contributes flow, either directly or th ro u g h another water, to a dow nstream w ater an d is charac- ter7,ed by the presence o f the physical indicators o f a bed and banks and an ordinary7 high watermark (OfTW M ). Im por tantly, the new regulatory7 definition of tributary7 does not consider w hen a feature flows, how7 often it flow's, or w hat volum e of w7ater it contributes dow nstream . Rather, the rule regulates all features m eeting the tributary definition-- even those th at m ight flow7 as a trickle or only after a heavy7rain fall-- as jurisdictional by rule. W h a t's m ore, in the Suprem e C o u rt's Rapanos decision, ju stice A nthony K ennedy rejected the use of an O fT W M to determ ine jurisdiction.7 A nd, like the former W O TU S definition, there are no assurances that C orps regulators will interpret O f f WAT consistently. lb make m atters worse, the rule asserts categorical jurisdic tion over all "adjacent waters," w hich are defined based upon their distance to other jurisdictional waters, including tribu taries. W ith an expansive tributary definition that extends to m any ditches and well beyond headwaters to countless miles of ephemeral streams and conveyances, it becomes increas ingly more difficult to identify an otherwise isolated water feature that falls outside of the arbitrary7 "bright-line" dis tances established in the rule. A nd, even if a w ater is located beyond the established distance from an O H W M or high-tide line to m eet the "adjacency7" requirem ents, if it is w ith in 4 ,0 0 0 feet of a jurisdictional water, the agencies could perform a significant nexus analysis on it, either alone or in com b in atio n w'ith o ther sim ilarly situated waters, to d eterm in e if it is subject to federal law7. In its ow n econom ic analysis o f the final rule, EPA acknowledges the m eaninglessness of this 4,000-foot "bright line,' stating: The agencies have determined that the vast majority of the nation's water features are located within 4,000 feet o f a cov ered tributary, traditional navigable water, interstate water, or 10 NATIONAL W ETLANDS NEW SLETTER Sierra Club v. EPA 18cv3472 NDCA Tier 7 ED 002061 00065184-00001 National Wetlands Newsletter, Vol. 37, No. 4, Copyright 2015 Environmental Law Institute Washington, DC, USA territorial sea. We believe, therefore, that very lew waters will be located outside 4,000 feet [of a jurisdictional water].12*4 Equally problem atic, the threshold to satisfy the significant nexus test is set so low th a t a w ater could be found to have a significant nexus if it either stores runoff or contributes flow to a dow nstream water. W h en asked to nam e a water that does not either store water or contribute water downstream during a recent Environm ental Law Institute seminar, EPA and the Corps officials could n o t-- show ing just how easy it will be for the agencies to determ ine that a water has a sig nificant nexus to another w ater and is thereby jurisdictional. In the end, m any landscape features that exhibit few attri butes of "w aters" or th a t w ould historically have been con sidered "isolated" will be swept into the federal regulatory net unnecessarily. Indeed, the rule only creates clarity and certainty by illegally asserting jurisdiction over nearly every possible wet feature. The sheer scope of these new definitions and the vast acre age they will bring under federal scrutiny raise significant con cerns for the hom e building industry7. By their very nature, land development and home building involve substantial earth-m oving activities. Because CW A 404 requires a perm it for the discharge of dredged or fill m aterial into W O T U S , builders and developers m ust often obtain CW A perm its to com plete their projects. As the definition of W O T U S expands, more activities will trigger CWA 404. Linder the new rule, activities discharging into features such as isolated w etlands, m an-m ade ditches and conveyances, and channels that only flow when it rains will require a federal permit. O b ta in in g these perm its is no sm all task, as the process causes delay7*, additional scrutiny', possible project redesign, and increased costs. A 2002 study, for example, found that it takes an average o f 788 day's and $271,596 to o b tain an individual CW A 404 perm it and 313 days and $28,915 for a "stream lin ed " nationw ide p erm it.56Im portantly, these values do not take into account the cost of mitigation, which can add up quickly. Perhaps even m ore costly, however, cart be discharging into a W O TIJS w ithout a CW A perm it-- a viola tion th a t can cost $37,500 per day. U ltim ately, these costs will be passed on to the hom e buyer, decreasing housing affordability. A 2011 study' by the N ational Association of H om e Builders (NAHB) Economics and H o u sin g Policy' G roup estim ated the im pact o f regula tions on the price of a new' home and found that, on average, regulations im posed by' all levels o f governm ent account for 25% of the final price of a new single-family' hom e.0 Nearly' tw o-th ird s o f th is -- 6.4% o f the final hom e price---is a ttrib uted to the higher price for finished lots resulting from regu lations im posed during the lots development. W hile these regulations are largely invisible to the home buyer, the public, and even the regulators themselves, the com pounding of the myriad local, state, and federal requirem ents has a profound im pact on housing affordability' and homeownership. Evert m oderate cost increases can have significant negative m arket im pacts. This is o f p articular concern in the afford able housing sector where relatively' small price increases can have an im m ediate im pact on low'- to m oderate-incom e hom e buyers who are more susceptible to being priced out of the m arket. As the price of a hom e increases, those who are on the verge of qualifying for that new hom e will no longer be able to afford its purchase. A n analysis done by' N A H B illus trates the num ber of households priced out of the m arket for a m edian-priced new home due to a $1,000 price increase. Nationally', this price difference m eans th a t w hen a m edian new home price increases from $275,000 to $276,000, over 2 0 0 ,0 0 0 households can no longer afford th a t hom e.7 This is n o t a good outcom e for anyone. As our n ation slowly recovers following the Great Recession, regulatory' burdens placed on hom e builders should be reduced, not increased. Finally', the added costs of this regulation w ill com e at little to no benefit to the environm ent. Indeed, m any of the newly m inted W O T U S are already regulated at the state and/or local levels. A nd, if they are no t regulated by the states, in m any cases, this is because the states have deter m ined that certain features simply do not w arrant regu lation. Clearly', EPA and the C orps have disregarded th at notion, not to m ention the intent of the U.S. Congress and the opinion o f the Suprem e C o u rt. A n d w ith a rule so expansive and u n w arran ted , it is likely only a m atter o f tim e u n til the courts w'eigh in on W O T U S again. O O E ndnotes 1. Solid. W aste Agency of N o rthern C o o k Cry. v. Army C orps oi: Engineers, 53 1 U.S. 159 (2001). 2. R apanos v. U n ited States, 547 U .S. 71 5 (2006). 3- hi. at 781 (Justice K ennedy noted th a t the reliance on O H W M to determ ine ju risdiction oi: the C lean W ater A ct 'leaves w ide room For regulation o f drains, ditches, and streams remote from any navigable-in-ract water and carry only m inor watervolum es tow ards it" an d p re c lu d e s its adoption. . . ). 4 . E c o n o m ic A nalysis o f t h e E P A -A rm y C lea n W afer R ule 11 (20 i 5), available a t http://www2.epa.gOv/.sites/production/hle.s/20 ] 5-05 /d oclam ents/bnaldeanjw ater_ruie_econ.om.ic_analysis_5-i 5_2.pdf. 5- D avid Sunding 2% D avid Ziiberm art, The kconomics of Environm ental Regulation by Licensing; A n Assessment o f Recent Changes to the W etland P erm itting Process, 4 2( i ; N at. R esources ]. 60 (2002). 6. Paul E m rath, H ow G overnm ent Regulations A ffect the Price o f a N ew H om e, N ational A ssociation o f H orne B uilders Econom ics a n d H o u sin g Policy G roup Special Study (2 0 1 1), available a t htrp://w rw w .nahb.org/en/research/nahb-priorifies/code-developm ent/IC C -codes/ "/m edia/A FB B 688D 7P E E 44E 9A 221F49B9B0i:.23.E8.ashx. 7. N atalia Siniavskaia, State a n d M etro Airea House Prices: The `Priced G u t Effect, N a tional A ssociation o f H orne Builders Econom ics an d .Housing Policy G roup Special Study (2014), available a t h ttp ://wwnv.nahb.org/en./research./.housing-economics/ special-studies/state-and-rnetro-area-house-prices-the-priced-out.-eifect-20l4.a.spx. JULY-AUGUST 2015 Sierra Club v. EPA 18cv3472 NDCA Tier 7 ED 002061 00065184-00002