Transportation, Planning, & Development Committee – Agenda, UDO Presentation
My take:
Budget, Governance, & Intergovernmental Relations Committee – Agenda
Jobs & Economic Development Committee – Agenda, Eastland Presentation
Housing, Safety, & Community Committee – Agenda
My take: While it is a work in progress, Co-Chairs Justin Harlow and Kim Graham presented an update on the work of the Neighborhood Equity and Stabilization (NEST) Commission. Final recommendations are expected at the next committee meeting in August. IMPORTANT: There are three openings on the commission and the group is in need of representatives from the real estate and development industry. Information on NEST. Click here to apply.
In a move that represents a long-overdue and major WIN for NAHB, builders, developers and property owners, the Supreme Court on May 25 issued a unanimous decision in Sackett v. Environmental Protection Agency that will force the Biden administration to overhaul its “waters of the U.S.” (WOTUS) rule and ultimately provide builders and developers more certainty in the federal permitting process.
“The decision represents a victory against federal overreach and a win for common-sense regulations and housing affordability,” said NAHB Chairman Alicia Huey.
The Sackett case revolved around the government regulation of a wetland near a roadside ditch. The government believed that it had Clean Water Act (CWA) authority over the wetland because the government claimed that this wetland, in combination with other nearby wetlands, had a “significant nexus” to Priest Lake, Idaho.
The significant nexus test that establishes federal jurisdiction over minor waterbodies such as isolated wetlands or human-made ditches is a critical part of the Biden administration WOTUS rule.
The Supreme Court essentially rejected the significant nexus test and the EPA’s reasoning. Five justices joined the opinion of the court, which began its analysis by explaining that the CWA’s use of the term “waters” encompasses only relatively permanent, standing or continuously flowing bodies of water that form geographic features that are ordinarily described as streams, oceans, rivers and lakes.
With respect to wetlands, the Supreme Court explained that in order for a wetland to be regulated under the Clean Water Act, it must have “a continuous surface connection to bodies that are ‘waters of the United States’ in their own right, so that there is no clear demarcation between ‘waters’ and wetlands.” As a practical matter, the court found only wetlands that are indistinguishable from waters of the United States are covered by the CWA.
NAHB had filed a friend-of-the-court brief in the Sackett case, arguing that it does not make sense for isolated wetlands, isolated ponds or human-made ditches on private property to be subject to federal jurisdiction.
Although the Sackett case did not directly address the Biden administration’s newest rule defining “waters of the United States,” this decision has an enormous impact on that rule. The current Biden WOTUS rule is based on the significant nexus analysis the Supreme Court has clearly rejected. Therefore, the administration will have to make extensive changes to the rule.
It should also be noted that the Biden WOTUS rule is now in effect in only 23 states because three U.S. district courts (North Dakota, Kentucky and Texas) have decided that the rule cannot be implemented in 27 states as a result of legal challenges. NAHB was involved in the Texas and North Dakota cases, which covered 26 of the 27 states affected.
As a result, the WOTUS rule has reverted to a pre-2015 regulation in those 27 states. But the pre-2015 rule also relies on the significant nexus test.
What this means going forward is that EPA and the U.S. Army Corps of Engineers will most likely need to go back to the drawing board to craft a revised regulation applicable to all 50 states. This process is expected to take several months.
As the government moves to revamp its WOTUS rule, NAHB will be urging the federal agencies to implement a durable and practical definition of WOTUS that will truly protect our nation’s water resources without infringing on states’ authority and triggering additional expensive, time-consuming permitting and compliance requirements.
My take: This is a big deal. This case was originally filed in 2008 and wound its way through the federal court system for the next 14 years. It serves as a response to federal regulatory overreach and should result in a new wetlands rulemaking process.
Also of note, SB 582, The North Carolina Farm Act of 2023, currently working its way through the NC General Assembly, contains a provision applying consistency between the recent court ruling and state regulations. The state’s current standard exceeds that of the federal government which leads to confusion and uncertainty.
At NAHB’s urging, a bipartisan group of 47 Senate lawmakers has sent a letter to Sec. Jennifer Granholm urging the Department of Energy (DOE) not to move forward on its proposed rule to regulate energy conservation standards for distribution transformers because it will exacerbate an already acute supply chain shortage.
Senators said that between 2020 and 2022, average lead times to procure distribution transformers went from eight to 12 weeks to up to three years.
“This multi-fold increase is directly impacting the electric power industry’s grid modernization and reliability efforts, … posing challenges for communities that need to rebuild as well as new development,” the Senate letter stated. “We are committed to working with you to identify short and long-term solutions to the supply chain shortage of these critical grid components.”
At a time when the home building industry is facing a severe shortage of electrical transformers, the proposed rule would dictate that manufacturers increase the efficiency of distribution transformers by a mere tenth of a percentage point. In order to achieve this nominal increase in efficiency, the proposed rule would require manufacturers to transition to a different type of steel that would add months to a lengthy order cycle that already takes a minimum of 18 months to two years to produce and deploy new transformers.
House lawmakers have also registered their concerns with DOE over this proposal and this issue will be at the forefront when hundreds of residential construction industry workers trek to Capitol Hill on June 7 for NAHB’s Legislative Conference.
NAHB has also sent comments to DOE stating how this proposed rule will not only exacerbate the current nationwide shortage of electrical transformers, but also fuel delays in home construction projects across the country as well as aggravating the nation’s housing affordability crisis.
NAHB continues to work with House and Senate lawmakers to seek additional congressional funding aimed solely at boosting production of distribution transformers to ease shortages that are delaying home construction projects across the nation as well as aggravating the nation’s housing affordability crisis.
My take: These are the kinds of rules that are amplified to the point of being dangerously ridiculous when tone deaf politicians are placed in positions of authority within the government. Energy Secretary Granholm, who previously served as the governor of Michigan, once flippantly said following a cyberattack on a pipeline that crippled fuel delivery, that “if you drive an electric car, this would not be affecting you, clearly.” At the time, the average cost of a new electric vehicle was north of $62,000.
Rob Nanfelt
Executive Director, REBIC