The Biden administration’s far-reaching “waters of the United States” (WOTUS) rule is one of the key regulatory issues that NAHB addressed in 2023 — and will continue to fight for on behalf of members in 2024.

The rule — issued by the U.S. Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (Corps) — included the problematic significant nexus test to establish federal jurisdiction over minor waterbodies such as isolated wetlands, human-made ditches or features that contain water only in response to rainfall events.

The rule would have made it nearly impossible for developers and home builders to know the jurisdictional status of certain features without having federal regulators perform significant nexus tests on each requested jurisdictional determination, which would have resulted in further regulatory delays and increased costs for new single-family and multifamily housing at a time when housing affordability is at a more than 10-year low.

A Focus on Housing Affordability

As advocates for housing affordability, NAHB Chairman Alicia Huey testified in February 2023 that: “If the administration is truly interested in knocking down barriers to affordable housing, it will direct the EPA and Corps to keep from implementing this rule until the Supreme Court issues its ruling in the Sackett [v. EPA] case. Second, because this rule is fatally flawed, Congress should direct the agencies to implement a durable and practical definition of WOTUS that will truly protect our nation’s water resources without infringing on states’ rights and triggering additional expensive, time-consuming permitting and regulatory requirements.”

Legal Victories in States and SCOTUS

While awaiting the Sackett ruling, NAHB continued to oppose the Biden WOTUS rule and achieved legal victories in North Dakota and Texas to bar implementation of the rule in 26 states.

In May 2023, the U.S. Supreme Court dealt a significant blow to the Biden WOTUS rule with its highly anticipated Sackett ruling, in which it unanimously rejected the significant nexus test and the EPA’s reasoning and required the administration to make extensive changes to the rule.

New Rule Generates More Uncertainty, Delays

Uncertainty and delays followed as the administration worked to finalize a revised rule and halted approved jurisdictional determinations (AJDs) nationwide until a final rule was available. Finally, in September 2023, a new rule — the baseline for which was based upon the previous rule invalidated by the Supreme Court — was issued that fails to clarify the definition of “relatively permanent” and “continuous surface connection,” and allows continued uncertainty, delays and federal overreach during the wetlands permitting process.

“It will directly result in continued regulatory barriers to affordable housing as single-family and multifamily developers struggle to find the developable land necessary to produce the new affordable housing units this nation desperately needs,” Huey stated in conjunction with the announcement of the rule.

Making matters even more confusing, several federal district courts had already issued a preliminary injunction against the Biden WOTUS rule released in January, which prevents the agencies from implementing the WOTUS amendments. This means the revised WOTUS definition only applies in 23 states, the District of Columbia and the U.S. Territories.

Legal Battles Seek Clarification, Regulatory Certainty

Since the rule’s official publication in the Federal Register, NAHB has been proactively participating in the litigation in the remaining 27 states to encourage the agencies to, among other things, define a clear definition of a relatively permanent waterbody to provide regulatory certainty to the home building industry. NAHB continues to meet with federal officials to air our concerns with the new rule, offer pragmatic changes that maintain environmental protection of our nation’s waterways, and restore common sense and predictability to the federal wetlands permitting process.

Updates for NAHB members can be found on the WOTUS page. Recent resources added include:

Evan Loukadakis, NAHB federal legislative manager, provides an update on the Biden administration’s WOTUS rule in the video below: