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Commercial Real Estate
Apr 15, 2015

'U.S. Waters' Rules Changes Would Cost N.C. Economy An Estimated $1.5 Billion

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

Back in October 2014, I wrote an Insights article entitled, "Can The New Definition Of 'U.S. Waters' Affect Local Property Investors?" The issue discussed in that article could have a major negative impact on homeowners, property and landowners, farmers and virtually everyone in North Carolina – not to mention most U.S. citizens in the other 49 states. I personally feel that this issue warrants more attention, which is why I’m writing this follow-up article and providing a status update.

Issue recap

In March 2014, the Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers (USACE) submitted a proposal to "more clearly define" the rules that currently regulate the two agencies’ authority over privately owned lands as defined under the Clean Water Act (CWA). The ultimate result of this proposal truly is that the definition of U.S. waters has become more hazy and murky than ever and has placed the determination of what U.S. waters are solely in the hands of the EPA and the USACE.
 
Among the most concerning provisions, the new rule would expand the definition of “navigable waters” to encompass ephemeral drains, ditches and so-called wetlands. If the rule is activated, farms, homes, 
commercial developments and countless other land uses in and around these areas will require a federal permit. These permits could take years to acquire, and may not be issued at all. Protesters are stating that the potential power that would be granted to the EPA and USACE is basically the same as complete federal zoning authority. The extremely vague, revised rule, if enacted, would give the agencies what amounts to unlimited regulatory authority to dictate, regulate and limit land use. In other words, field operatives from either agency will have virtually limitless power to tell landowners what they can and can’t do on their own private land.
 
Over a million complaints

Blow back to the proposed rules changes from local entities, such as the City of Wilmington and New Hanover County, to national trade groups and agencies, such as the federal Small Business Administration, was massive and far-reaching. Nearly 1 million formal complaints were filed (and countless not-so-formal complaints were verbalized). The voices of concern from all over the nation were heard in Washington D.C. as the House of Representatives passed a bill specifically aimed at stopping the changes. Unfortunately, the Senate did not take similar action.
 
The EPA and USACE announced that it expects to issue a final rule this May or June and implementation of the rule would begin in early 2016, although legal challenges could delay implementation for years. If Congress intends to pass legislature to stop the new rule, it would need to do so between the issuance of the final rule and its implementation.
 
What this means for North Carolina

While it’s very difficult to predict with any degree of accuracy what the true impact of the rule would have on North Carolina, most protesters agree that the impact will be immediate and substantial. Federal regulations over ditches, floodplains and rain-filled potholes will create immediate issues for farmers, landowners, local governments and homeowners associations, to name a few.
 
In February 2015, North Carolina Congressman David Rouzer, along with backing from the N.C. Farm Bureau Federation, the N.C. Association of Realtors and the Business Alliance for a Sound Economy (BASE), released a joint statement expressing disapproval for the rule change proposal. In the statement Rouzer wrote, “The new rule is so vague that it could require our farmers and property owners to get permission from a federal bureaucrat before acting on their own property. In talking with small business owners, farmers, realtors and home builders, it’s clear that the rule change could negatively affect every industry.” It may sound extreme that farmers could possibly face this kind of regulatory pressure from the EPA and the USACE while they are trying to produce food for our nation, but you must realize that this would not be the first time that the agricultural industry has been attacked by these two agencies. Farmers weren't attacked for their use of insecticide or fertilizer. Instead, the agencies began to pressure farmers on their need for water retention based on the dirt roads they used to get to their fields. It was determined that their dirt roads had become compacted to the point that they was no longer pervious, therefore requiring storm drainage systems to be created by the farmers.
 
According to Cady Thomas, chief lobbyist for the N.C. Association of Realtors, “A study by the Civitas Institute found that the new EPA rules will cost the N.C. economy more than $1.5 billion in the next 15 years and will cost the taxpayers greatly. The proposed rule provides essentially no limit to federal jurisdiction.”
 
Imagine you own and pay taxes on 100 acres of land. Now a USACE field agent comes to your property and arbitrarily decides that some puddles on your land (filled by rainwater) may be affecting larger bodies of water and therefore you are no longer allowed to use 50 acres of your land. The agency is not going to pay any compensation to you for the loss of use of your land and you will be required to continue to pay taxes on all 100 acres. This is not environmental regulation; this is a land grab and another excuse for power-hungry federal agencies to take control of more of our resources.
 
Sometimes I like to simplify things to where the situation hits home. Just imagine that you go buy a brand-new Buick. Its a four-door and will seat five very comfortably. The seats are made with leather and are very comfortable, especially in the winter; they can each be heated to match your exact comfort level. The car is beautiful and has everything in it – XM Radio, navigation system, entertainment center, cup holders that actually keep your drink cool while you are driving, and so on. You may have paid a dollar or two more for this car, but it was worth it. You love your new car. Your family of four gets in the car for the ride home and you are excited. You hope the neighbors are going to be home so they can see it (not that you want to brag or anything). You drive out of the dealership and down Main Street. After four or five blocks a policeman pulls you over. What for? "Did I forget something?" you ask yourself. Did the dealer put on the new tags? 
 
The policeman comes to your window and ask for you license and registration. You answer politely, hand him your license and registration, and then ask, "Did I do anything wrong, officer?" The officer ask you to remain in the car while he runs your license. You wait anxiously, wondering where this exciting trip for your family went wrong. The policeman returns to your car and informs you that the kids in the back seat are going to have to get out of the car. The backseat has been judged, in the officer's sole opinion, to be off limits for private use. Your children can walk home or you may come back and pick them up one at a time after the front seat is made available for them. HAVE A NICE DAY.
 
That is what it is like when someone has autonomous control over your land, and furthermore, your life.
 
I invite you to write your senators, representatives and elected leaders of any kind and make them aware of what our country is facing.
 
If you want to learn more or want to get involved, check out this website: http://ditchtherule.fb.org/

 
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 specializes 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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