In a move championed by NAHB, the Environmental Protection Agency and U.S. Army Corps of Engineers have announced a proposed updated definition of “waters of the United States” (WOTUS) that would provide builders much-needed clarity by defining which waters are subject to federal jurisdiction under the Clean Water Act while continuing to protect our nation’s vital waterways. The proposed rule was published on Nov. 20 in the Federal Register for a 45-day comment period.

The proposed rule:

• Limits federal jurisdiction under the Clean Water Act to traditional navigable waters and the relatively permanent waters that flow from them, such as year-round or seasonally flowing lakes, streams and rivers, and wetlands that directly abut those waters,
• Defines key terms including “relatively permanent” and “continuous surface connection,”
• Removes interstate waters as a separate jurisdictional category, and
• Reaffirms exclusions for most ditches, prior-converted cropland and waste treatment systems.

This rule corrects the overreach of the 2023 conforming rule, which had broadly interpreted “relatively permanent” and allowed wetlands connected by swales, pipes or man-made drainage to be considered jurisdictional.

A March 2025 EPA and Corps guidance clarified that only wetlands physically abutting a jurisdictional water, without intervening upland, berm or dike, meet the continuous surface connection test. This change aligns federal jurisdiction more closely with the Supreme Court’s Sackett v. EPA and Rapanos v. United States decisions.

For home builders, the proposed rule provides greater regulatory certainty. Unclear jurisdictional boundaries have long caused project delays, added costs, and unpredictable permitting. Further, in states that regulate beyond the federal definition of WOTUS, vague federal requirements have caused confusion regarding the permitting authority for dredge and fill projects. By clarifying which waters are jurisdictional, this rule offers a more predictable permitting process, reducing administrative burdens and supporting housing production and affordability.

NAHB has been actively engaged in this rulemaking process, participating in listening sessions and providing written feedback on how federal regulation affects development practices.

State and local home builder associations are encouraged to submit letters of support for the proposed rule to highlight its benefits for regulatory clarity and responsible housing production. Contact Evan Branosky, Senior Program Manager of Environmental Policy, at ebrа[email protected] for a template letter.