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
Mar 12, 2026
Statement from NAHB Chairman Bill Owens on Passage of Senate Housing BillNAHB Chairman Bill Owens issued the following statement after the Senate passed the 21st Century ROAD to Housing Act.
Mar 12, 2026
Single-Family Starts Remain Soft in January on Affordability ConcernsOverall housing starts increased 7.2% in January to a seasonally adjusted annual rate of 1.49 million units, according to a report from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau.
Latest Economic News
Mar 12, 2026
Single-Family Starts Remain Soft in January on Affordability ConcernsElevated construction costs and constrained affordability conditions led to a reduction in single-family housing starts in January.
Mar 11, 2026
Inflation Steady Before WarAfter months of downward trend, inflation held steady at an eight-month low in February. This report does not reflect the recent surge in oil prices due to Iran conflict beginning February 28. Higher oil prices will likely translate into higher gasoline costs and impact other sectors associated with transportation including airline tickets.
Mar 11, 2026
Single-Family Permits End 2025 on a Soft NoteSingle-family permitting softened over the course of 2025 and finished the year weaker than the prior year. After showing some resilience in 2024, permitting activity gradually lost momentum as elevated mortgage rates and ongoing affordability constraints weighed on buyer demand.