Final WOTUS Rule a Blow to Housing Affordability
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.
Latest from NAHBNow
Apr 21, 2026
NAHB Publication Offers Housing Professionals Tools to Help Boost Customer Satisfaction and SalesBuilderBooks, the publishing arm of NAHB, released a new edition of its popular home buying resource, Buying Your New Home: A Guide to Home Buying, Second Edition.
Apr 20, 2026
Electrical Safety is Important to Everyone on a Home Building SiteElectrical safety on jobsites can often be overlooked by many workers whose primary jobs do not include electrical work. But all workers and visitors on a home building jobsite can be exposed to electric risk if proper safety procedures are not followed.
Latest Economic News
Apr 21, 2026
Population Growth and Housing Supply Dynamics at the County Level in 2025U.S. population growth slowed notably in the latest Vintage 2025 population estimates from the U.S. Census Bureau, with the nation expanding by just 0.5% in 2025, roughly half the pace of the prior year. The deceleration was primarily driven by a sharp decline in net international migration (NIM), which dropped from 2.7 million to 1.3 million, while natural change remained relatively stable.
Apr 20, 2026
Construction Workforce Shifts: Fewer Tradesmen, More White-Collar JobsThe long-running shift in the construction labor force away from construction trades and toward management, business, and technical roles is ongoing and gaining momentum, according to NAHB’s analysis of the latest 2024 data from the American Community Survey (ACS).
Apr 17, 2026
Count of Second Homes Declines in 2024In 2024, the number of second homes in the U.S. was 6.2 million, accounting for 4.3% of the nation’s housing stock, according to NAHB estimates. This reflects a modest decline from 2022, when the number reached 6.5 million. This decline suggests some cooling following the pandemic-era surge in second home demand.