Clean Water Act and Real Estate
by Bryce Linden, Attorney at Cook & James
This blog is a forum to curate expert commentary, opinion and thought leadership resources. Today, our own Bryce Linden, who clerked for the EPA, continues his mini-series examining topics in environmental real estate law transactions. Previously, he wrote about flood insurance; now, he outlines the history, issues and current status of the Clean Air Act and how real estate is affected.
The Clean Water Act, passed by Congress in 1972, has been the subject of much debate since it was enacted. Revised over its nearly four decades, most recently in the fall of 2019 the EPA relaxed some requirements to continue to protect “the nation’s navigable waters from pollution” while also resulting “in economic growth across the country.”
In all its revisions, environmentalists, builders, developers and others in the real estate industry agree on one thing: water needs to be protected. But the method -- how strict the regulations should be -- remains hotly debated by the parties.
For now, the recent relaxed rule helps builders since less regulation means there is more time, money and freedom to do their job of new construction without the worry of civil or criminal liability. The topic will continue to be top-of-mind in the real estate industry and this blog post explains some of the basics.
A central component of the Clean Water Act known as Waters of the United States (WOTUS) has been through the “judicial ringer,” specifically, how WOTUS is defined through a judiciary lens. Many provisions in the Clean Water Act depend on that particular definition and exactly how people discharge pollutants from a particular point source[1] into a body of water[2].
A chief complaint from many in the real estate industry were the burdensome restrictions that were adopted by previous executive branch administrations. Specifically, a permit was previously required if the construction project would cause a discharge into a water defined under WOTUS; however, due to the expansive definition of WOTUS (i.e., groundwater, ditches, artificial lakes, etc.) many permits were required.
Last fall’s revision by the United States Environmental Protection Agency in conjunction with the United States Army Corp of Engineers drafted a new rule on how WOTUS should be defined. This was welcome news to many realtor and homebuilding advocacy groups, including The National Association of REALTORS® and the National Association of Homebuilders. NAR is in favor of any pragmatic repeal that would “…reinject certainty and consistency in the construction permitting and development process while protecting water quality and property rights.”
The recent change in the WOTUS definition will impact developers and construction companies including when and where they’ll need to obtain a discharge permit. For example, the final rule excludes groundwater, ditches, artificial lakes and ponds[3] in the definition of WOTUS. Under the previous rule, discharge into water, ditches, artificial lakes and ponds, etc. would have required a discharge permit under the Clean Water Act and discharging without a permit would have resulted in high civil penalties and potential criminal penalties. The National Association of Home Builders states that, “…builders and developers should require fewer Clean Water Act permits. It will also allow many builders and developers to determine for themselves whether they will need federal permits for construction activities.”[4]
A long-term question that will eventually be asked is how much real estate entities actually benefitted from this recent less restrictive rule. What is crystal clear is that the Clean Water Act and its interpretation will continue to the be the subject of controversy in Congress, the judicial system, and in the eyes of the real estate industry.
Bryce Linden holds a law degree from Georgia’s Mercer University and an LL.M in environmental law from George Washington University in Washington, DC. While in our nation’s capital, he clerked for the EPA, specializing in hazardous waste, chemical clean-up and other environmental hazards as they pertain to real estate transactions. Linden brings his eco-expertise to Cook & James and will work on residential resale transactions as well as with home builders. This is the second in a series planned to cover various real estate law and environmental issues.
[1] The term point source means, “any discernible, confined and discrete conveyance, including but not limited to any pipe, ditch, channel, tunnel, conduit, well, discrete fissure, container, rolling stock, concentrated animal feeding operation, or vessel or other floating craft, from which pollutants are or may be discharged. 33 U.S.C.A. § 1362 (14)
[2] The newest finalized rule separates Waters into three jurisdictional groups – waters that are categorically jurisdictional (e.g., interstate waters); those that require a case-specific showing of their significant nexus to traditionally covered waters (e.g., waters lying in the flood plain of interstate waters); and those categorically excluded from jurisdiction (e.g., swimming pools and puddles).
[3] This includes artificial lakes and ponds, including water storage reservoirs and farm, irrigation, stock watering, etc.
[4] http://nahbnow.com/2020/01/in-a-big-splash-for-housing-epa-chief-announces-new-water-rule-at-ibs/