The EPA's new definition will likely cause additional development costs and delays.
On March 20, 2023, the Environmental Protection Agency’s (EPA or the Agency) new Revised Definition of ‘Waters of the United States’” (WOTUS) rule when into effect. These changes, governed by the Clean Water Act, significantly expand the scope of development activity regulated by the EPA and will likely cause additional costs and delays in multifamily development.
The definition of WOTUS was previously revised in 2020 to give the EPA authority over waters and wetlands that “maintain a sufficient surface water connection to traditional navigable waters and territorial seas.” That version of the rulemaking struck a better balance of strong protections for our natural environment and understandable regulations for development.
The new definition of WOTUS largely reverts the Agency’s jurisdiction to what it was before 2015, encompassing half a century of layered rulemaking and Supreme Court decisions. The new rule not only increases the number of properties governed by the Clean Water Act, but also provides less clarity for those who must comply.
As of the time of writing, the new WOTUS definition is only in effect in half of the states because ongoing litigation, to which the National Apartment Association (NAA) is a party, has prevented its implementation in the other half. As of April 12, 2023, the Rule has been blocked in 26 states by the U.S. District Court of North Dakota and U.S. District Court of Southern Texas.
In West Virginia, State of et al v. U.S. Environmental Protection Agency et al, U.S. District Judge Daniel Hovland found that the “new 2023 Rule is neither understandable nor ‘intelligible,’ and its boundaries are unlimited,” and that “it is doubtful Congress endorsed the current efforts to expand the limits of the Clean Water Act…”
The plaintiffs in the above case sought a preliminary injunction prohibiting the EPA (and other defendants in the case) from enforcing or implementing the WOTUS Rule. Meanwhile a decision in Sackett v. EPA, a key Supreme Court case examining the proper test for evaluating whether the EPA has jurisdiction to regulate wetlands, is still pending. Judge Hovland wrote that the “2023 Rule’s “significant-nexus” standard poses important due process concerns which may not be clarified until the United States Supreme Court issues a decision in Sackett.” The Supreme Court is expected to rule on Sackett before its term ends in June.
In addition to the Constitutional concerns raised by the Court, a bipartisan bill passed the U.S. Senate on March 29, 2023, to rescind the EPA’s new definition.
Meanwhile, the House and Senate have each passed an NAA-supported, bipartisan joint resolution of disapproval under the Congressional Review Act which would overturn the Biden Administration’s WOTUS rule. President Biden however, as expected, recently vetoed the resolution.
NAA is monitoring the movement of these cases and legislation and will continue to defend the rental industry from regulatory overreach and misguided policy.