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Commercial Real Estate
Oct 1, 2014

Can The New Definition Of “U.S. Waters” Affect Local Property Investors?

Sponsored Content provided by W. Grayson Powell - Broker, Managing Partner, Coldwell Banker Commercial SunCoast

Spoiler Alert: The answer is “yes”

On March 25, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) released a proposal to revise the rules that regulate the two agencies’ authority as described under the Clean Water Act (CWA). The revised rule, if activated, would greatly expand their collective regulatory authority to dictate, regulate and limit land-use decisions. In other words, field operatives from either agency will have much more power to tell landowners what they can and can’t do on their land.

A Little CWA History

To provide some context, here’s a brief history of how the CWA came about. In 1972, Congress passed the CWA, which made it illegal to discharge pollutants from a single, identifiable source into navigable waters without a federal permit.
The CWA also gave federal agencies, primarily the EPA and USACE, the authority to regulate navigable waters, such as lakes and interstate rivers. The legislation refers to the bodies of water that are subject to the CWA as “waters of the U.S.” Congress intentionally and clearly decreed that state and local governments should maintain jurisdiction over smaller, more localized waters, such as ponds, ditches, isolated wetlands and ephemerals (small streams that appear during rainfall), because state and local governments are more aware of local environmental and economic circumstances, and more accountable to their communities. Ever since the CWA was enacted, the EPA and USACE have pushed these jurisdictional limits by attempting to invoke regulatory enforcement actions based on ever-widening interpretations of the phrase “waters of the U.S.” So far, in at least two rulings, the Supreme Court has upheld the authoritative limits that Congress intended when including the phrase “navigable waters.”

Less Clarity – More Federal Control

However, the revisions proposed by the EPA and USACE will effectively remove the word “navigable” from the definition of “waters of the U.S.,” placing previously excluded features such as drainage streams, ponds, ditches, flood plains, seeps, puddles and other areas that are only occasionally wet under federal jurisdiction.

The EPA has publicly claimed that the proposed revisions are intended to clarify the scope of the CWA. However, the rule creates increased levels of ambiguity, expands on the types of waters (and lands) that will require federal permitting, and add limits to land use.

Bad for Business

The EPA has also suggested that the new version of the CWA will be good for business because it will make it easier to determine if a body of water is actually U.S. waters. I suppose that if every puddle and stream and drop of water within the 50 states is defined as U.S. waters, then determining federal boundaries is simpler … because there simply are none.

That kind of simplification doesn’t help anyone – on the contrary, increased regulations of this kind will result in increased permit requirements, environmental impact analyses, and property-owner lawsuits. If the rule is allowed to pass, every American will feel the impact either directly or indirectly, including countless small business and property owners ill-equipped to absorb the costs. The EPA and USACE have either not considered, or not addressed, the negative impact the revised rule will likely have on a wide variety of economic factors, as well as the potential strain on state and federal resources for expanded requirements like permitting, oversight and enforcement.

It’s difficult to predict if the rule will be adopted and how it will actually affect individuals and businesses, but my advice is to be aware of the potential for more federal control over your property. Stay informed. Use professionals who can help you wade through these potentially costly decisions. Whether you are buying, selling or developing, think ahead about how a new CWA could affect your property investments, and consider the proactive steps you may be able to take to protect property – and your right to use it how you see fit.

Grayson Powell is a Managing Partner at Coldwell Banker Commercial Sun Coast Partners (CBCSCP). CBCSCP leverages the vast experience of highly-skilled real estate professionals and developers and specialize in selling, leasing and managing retail, commercial, and investment property. To learn more about CBCSCP, visit www.cbcwilmington.com or call 910-350-1200.

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