NAHB Provides Analysis on New EPA Water Rule
The Environmental Protection Agency (EPA) and U.S. Army Corps of Engineers (Corps) announced a new “waters of the United States” (WOTUS) regulation on Jan. 23, at the International Builders’ Show in Las Vegas. The new regulation, the Navigable Waters Protection Rule (NWPR), redefines the federal definition of WOTUS under the Clean Water Act (CWA).
The NWPR addresses many of the concerns NAHB had with prior rules, including uncertainty over where federal jurisdiction begins and ends. Improvements compared to the prior rule include:
Eliminates “significant nexus” test:
The onerous significant nexus test is no longer relevant due to the NWPR’s focus on features that maintain a surface connection to traditional navigable waters.
Encompasses fewer adjacent wetlands:
Because the NWPR only asserts federal authority over wetlands that have a surface connection to other jurisdictional waters in a typical year, it does not encompass the “neighboring” and “similarly situated” waters covered by the 2015 rule.
Excludes ephemeral waters:
The NWPR does not extend federal jurisdiction to waters that form only in response to rainfall. The 2015 rule included many ephemeral features.
Narrows federal jurisdiction over tributaries:
Because the NWPR requires tributaries to maintain intermittent or perennial flow, it does not depend on physical observations of “bed and banks and an ordinary high-water mark” that could form during ephemeral flow and last long after that flow ceased. Such physical features established jurisdiction under the 2015 rule.
Excludes more ditches:
The NWPR excludes all ditches unless they satisfy the conditions of a traditional navigable water or tributary. In comparison, the 2015 rule regulated all ditches unless they met narrow exemptions.
In general, compared to prior rules, the NWPR subjects less area to federal oversight, eliminates ambiguous tests and provides landowners with greater certainty, and focuses on conditions that are more easily observable, making it easier to implement in the field.
To help builders and developers better navigate these changes, NAHB has issued a full analysis of the NWPR.
For more information, visit nahb.org or contact Evan Branosky at 800-368-5242 x8662.
NAHB Formally Challenges Some Recent Building Codes Vote Results
NAHB sent a letter Feb. 14 to International Codes Council (ICC) President Dominic Sims urging the building codes body to carefully reevaluate the validity of many approved voting officials, to reject two specific proposals as not meeting the intent of the energy code, and to reform some of its voting processes while retroactively reconsidering proposals that should not have been on the final ballot.
The results from the 2019 Online Governmental Consensus Vote, to determine 2021 building codes proposals, included several irregularities and discrepancies, specifically proposals for the International Energy Conservation Code (IECC).
Some aggressive energy efficiency proposals that had been defeated at prior committee hearings and public comment hearings were approved in the online vote. When proposals are defeated at hearings, they must get a two-thirds majority to overturn past results. It’s a bar so high, no previous proposal had ever met the threshold with the online vote. But in this code cycle, 20 IECC proposals cleared the hurdle and came back to life.
NAHB is asking the ICC to set aside the results for these 20 proposals and to revise its code adoption process to clarify that the Public Comment Hearing results are considered the Final Action for proposals that were disapproved at both the Committee Action Hearings and the Public Comment Hearings.
Two of the 20 proposals were also, in NAHB’s view, clearly outside the intent of the IECC. These proposals require the addition of electric vehicle charging outlets and the installation of electric outlets where gas appliances are installed that can be used for future electric appliance replacement. Neither proposal increases energy efficiency. NAHB is asking that they be rejected regardless of the outcome of the previous request.
The 20 IECC proposals that were approved after being previously defeated appeared to have been overturned with significant support from hundreds of new voters in the online vote. And the new voters were added late in the code cycle.
In 2019, only minor updates occurred to the ICC Member Directory after two deadlines on March 29 and Sept. 23. At some point between late October and Dec. 19, 2019, however, there was a major update that added roughly 209 newly validated Governmental Members to the roster, totaling about 1,345 new Voting Representatives.
NAHB is concerned about the eligibility of many of the new Governmental Members. The letter to ICC includes an attachment with names of specific local government agencies and departments whom NAHB is asking the ICC to re-evaluate. Once that reassessment is completed, the online vote results should be retallied, excluding and the votes of any GMVRs who do not meet the current bylaws.
As a leading participant in crafting the I-Codes, NAHB and its members have a significant interest in retaining the rigor, credibility and legitimacy of the code development process in order to create building codes that are enforceable and provide safe, energy-efficient and affordable homes. The ICC must acknowledge the irregularities of the most recent online vote and take steps to remedy the results and ensure the validity of the process.
How the Hidden Costs of Housing Affect Affordability
Rising home prices continue to put homeownership out of reach for many Americans. TheHill.TV reported in a recent episode that the median home price has jumped from $220,000 in 2010 to $331,000 in 2020. According to recent economic analysis by NAHB, more than half of U.S. households are unable to afford a $250,000 home, let alone a $331,000 home.
What factors are contributing to these rising prices? The Joint Center for Housing Studies’ “The State of the Nation’s Housing 2019” report points to the shortage of housing as a key factor putting pressure on prices and rents, especially for modest-income Americans. Builders are struggling to meet demand for new housing because of regulatory burdens, land and material costs, and labor shortages.
“Essentially you have three buckets of costs. One is land, one is soft costs, and one is what’s known as hard costs,” explained Andy Winkler, associate director of housing and infrastructure issues at the Bipartisan Policy Center, with hard costs reflecting labor and construction costs, such as the price of materials, and soft costs reflecting components such as fees, taxes, consultants and financing. “All of those things combine together to give you the price of an apartment or a house.”
Impact fees can be particularly cumbersome, observed Peter Van Doren, senior fellow and editor of Regulation journal at the Cato Institute.
“Some jurisdictions have impact fees — literally payments you make to the jurisdiction in return for the right to develop,” he noted. “If you want to build, you not only need the permission of the zoning board, for every unit you build, you need to pay the jurisdiction this much money. And again that raises the price.”
A 2017 Cato Institute study found that rising land-use regulations contributed to increases in home prices in 44 states, and zoning regulations contributed to home price increases in 36 states. NAHB estimates approximately 25% of the cost of a new single-family home and 32% of the cost of a multifamily development are attributed to regulatory costs.
Permits are another regulatory burden that can add to the price of a home. What used to take a few business days can now take weeks, sometimes even months, to obtain, builders noted, and cost up to $60,000 or more, depending on scope and complexity of the project. And that’s before anything has even been done on site.
This has made it harder to bring lower-priced homes to market, and is disproportionally affecting home-price appreciation, noted Frank Nothaft, executive, chief economist at CoreLogic.
“What we’ve seen when we’ve looked at price growth by price tier — comparing lower-priced homes with higher-priced homes — is price growth has actually been slower for the higher-priced homes,” he explained. “Higher-priced homes are seeing slower appreciation than lower-priced homes in part because there is new supply. And we’re seeing very little new construction adding to the supply of lower-priced homes.”
Young prospective home buyers in particular are having a hard time breaking into the market.
“It’s just becoming more and more difficult because, as home prices rise, you’ve got to save up for a down payment and the closing costs,” he said. “That can easily amount to 10% or more of what the price of the home is. That’s a lot of cash, especially when young families have a lot of other expenses as well, such as student debt and auto debt.”
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