Home Builders Tell Congress How Permitting Roadblocks Raise Housing Costs

The National Association of Home Builders (NAHB) told Congress today that federal permitting inefficiencies delay housing projects, raise construction costs and exacerbate the nation’s housing affordability crisis.

Testifying before the Senate Environment and Public Works Committee, NAHB Chairman Carl Harris, a custom home builder from Wichita, Kan., told lawmakers that “most land developers have been forced to step away from particular parcels of land due to the uncertainty of being able to obtain the necessary permits.”

On this issue, Harris noted that the Clean Water Act (CWA) stands out among the regulated community because it is unclear which parts of the land parcel may be considered “waters of the United States” (WOTUS) and therefore require a federal wetland permit.

“Obtaining a CWA Section 404 permit takes upwards of one year, and completing an Endangered Species Act (ESA) consultation when required can take several more,” said Harris. “When considering these implications, it’s clear why we need to make the unwieldy permitting process more straightforward for home builders.”

According to a 2021 NAHB study, regulatory costs at the federal, state and local levels account for 24% of the final price of a new single-family home built for sale. Achieving predictability and certainty in the federal permitting process will help reduce the overall cost of construction, which will help increase the nation’s housing supply.

With the EPA and Army Corps of Engineers blatantly overstepping their federal authority regarding jurisdictional waters of the U.S., NAHB is urging Congress to consider the following improvements:

• If the agencies continue to refuse to provide regulatory definitions for “relatively permanent” water flow or what constitutes a “continuous surface connection,” Congress must step in and define these terms. Or conversely, lawmakers should identify features that cannot by statute be considered WOTUS.
• Congress must ensure the agencies prioritize responding to requested jurisdictional determinations and processing CWA Section 404 permits in a timely manner.
• Regulatory changes to the definition of WOTUS should not invalidate prior approved jurisdictional determinations.

Like the CWA, the ESA’s Section7 consultation process requires builders to first consult with the U.S. Fish and Wildlife Service or the National Oceanographic and Atmospheric Administration before they can start construction if their project may impact endangered species. This process usually results in permitting delays, project reconfiguration, and possibly the loss of buildable lots.

Regulatory changes that establish clear timeframes for the agencies to complete the Section 7 consultation process, as well as expanded use of programmatic Section 7 consultations, would help ensure ESA consultations are completed in a timely manner and eliminate some of the uncertainties and permitting delays that have plagued the Section 7 consultation process since its inception.

“Enacting common sense regulatory reforms that will make compliance more efficient and less onerous will help home builders to better safeguard the environment and expand the availability of attainable, affordable housing for all Americans,” said Harris.