2027 IBS Registration Open
 
Register by Sept. 30 to lock in the best deals: Register now
 

Final WOTUS Rule a Blow to Housing Affordability

Environmental Issues
Published
Contact: Michael Mittelholzer
[email protected]
AVP, Environmental Policy
(202) 266-8660

In a blow to housing affordability and regulatory certainty for builders and other stakeholders, today the Biden administration established final regulations that will dramatically expand the definition of “waters of the United States” (WOTUS) under the Clean Water Act (CWA), even as the U.S. Supreme Court has yet to decide on the legality of key aspects of the rule.

“Rather than providing clarity and certainty for home builders and other affected stakeholders, this definition of WOTUS adds uncertainty and confusion to the regulatory process, raises housing costs and drastically increases federal overreach in the process,” said NAHB Chairman Jerry Konter.

Regrettably, the final rule continues to rely upon a confusing and legally flawed theory of CWA federal jurisdiction known as the “significant nexus test” to potentially assert federal control over most isolated wetlands and ephemeral streams impacting numerous activities, including home building.

In practice, the significant nexus test has proven extremely difficult to apply consistently in the field, leaving developers and builders unable to discern for themselves which isolated wetlands, ephemeral streams, or even human-made drainage features, like roadside ditches, are federally jurisdictional under the CWA.

NAHB believes the decision by the U.S. Environmental Protection Agency (EPA) and the Army Corps of Engineers (Corps) to finalize today’s WOTUS definition is counterproductive and shortsighted, especially since the Supreme Court’s upcoming ruling under Sackett v. EPA is squarely focused on the legality of the significant nexus test, which is a critical part of the final rule.

The new WOTUS rule radically extends the areas in which home builders are required to get federal permits will 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. In short, the rule will generate bureaucratic and project delays, and raise housing costs at a time when the nation is already experiencing a housing affordability crisis.

Moreover, the final rule’s continued reliance upon the significant nexus test when determining CWA jurisdiction over otherwise isolated and ephemeral features prevents states and local governments from acting as co-regulators, as intended by Congress when the CWA was drafted more than 40 years ago. And not only does the significant nexus test go well beyond the limits of federal jurisdiction set forth previously by the Supreme Court, it also results in duplicative and even conflicting wetlands requirements at the federal, state and local levels of government.

“The Biden administration has declared a housing affordability crisis, but 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 case,” said Konter.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

Workforce Development
Sep 02, 2026
Florida HBA Opens New 43,000-Square-Foot Workforce Education Center

The Northeast Florida Builders Association debuted its new 43,000-square-foot Workforce Education Center and headquarters with a ribbon-cutting ceremony on Aug. 13.

Advocacy
Sep 02, 2026
New York Housing Leader Warns Congress Gas Bans Undermine Affordability

Michael Fazio, executive director of the New York State Builders Association, told Congress today that energy mandates are driving up construction costs and deepening the housing affordability crisis.

View all

Latest Economic News

Economics
Sep 02, 2026
House Price Appreciation by State and Metro Area in the Second Quarter of 2026

U.S. house prices continued to rise in the second quarter of 2026, with most states and metropolitan areas recording annual gains. Elevated borrowing costs and affordability constraints remained important headwinds, while limited housing supply continued to support prices in many markets, particularly across parts of the Midwest and Northeast.

Economics
Sep 01, 2026
Number of Open Construction Sector Positions Rising

The number of open positions in the construction sector increased in July per the Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS). The current level of open jobs is down from three years ago due to declines in construction activity, particularly in housing.

Economics
Sep 01, 2026
HBGI Q2 2026: Single-Family Construction Contracts Broadly While Multifamily Expands

Home building trends diverged across geographies in the second quarter of 2026. According to the Home Building Geography Index (HBGI), single-family construction declined in nearly all geographic categories, although the contraction eased in most markets from the first quarter.