By Bill Adams, Founder, Adams Realtors & Adams Commercial Real Estate
Those outside the realm of commercial real estate may not realize that bodies of water found on a property – such as wetlands, rivers, streams and ponds – can profoundly impact how the property can be developed and used. However, there has been considerable confusion over what waters can be regulated and protected under federal law.
Waters of the United States (WOTUS) regulations originated with the Clean Water Act in 1972. The Clean Water Act (CWA) is based on “cooperative federalism”, where the federal government and the state governments work together. From the beginning, landowners, developers and governments at all levels encountered challenges with the WOTUS regulations because Congress left it up to the newly formed Environmental Protection Agency (EPA) and the U.S. Army Corps of Engineers to establish and enforce the regulations and define the type of “waters” that were covered in the rules. What ought to have been clearly defined regulations promulgated by the legislative branch of the Federal government instead became an ebb and flow (pun intended) of regulations under the purview of the executive branch with the judicial branch playing the role of the traffic cop.
In the years since the Clean Water Act was signed into law, the definition of WOTUS has expanded. At least three times, the U.S. Supreme Court has stepped in to reign in the EPA. In May, the Supreme Court ruled that the CWA only applies to wetlands with a surface connection to a navigable body of water. Wetlands that do not have a surface connection could still fall under local or state environmental regulations.
Over the last 8+ years the definition of WOTUS changed depending on whether the executive branch was led by a Democrat or a Republican. In 2015, the Obama administration expanded the definition of WOTUS to include all streams, including intermittent streams on normally dry land. This expansion of the regulations was stopped by the courts and was never implemented. In 2020, the Trump administration devised the Navigable Waters Protection Rule (NWPR) to define the categories of jurisdictional waters and provide some level of certainty to all the stakeholders. Then, in 2021, the Biden administration rescinded the NWPR and appears to be headed in the direction of a broader and more uncertain definition of WOTUS.
With a clear definition of WOTUS, the value and marketability of commercial real estate with bodies of water would be less volatile, permitting and compliance would not be as ambiguous and there would be fewer legal challenges and litigation over conflicting interpretations of the Clean Water Act’s scope. It is over 50 years too late, and the federal legislative branch is dysfunctional, however, it is time for Congress to provide clarity and structure to the Clean Water Act and explicitly define what is and is not covered by Waters of the United States regulations.
Some of the information in this blog was taken from an article on WOTUS in the Winter 2023 edition of the Realtors Land Institute (RLI) magazine, Terra Firma. The article was written by Russell Riggs, RLI’s Advocacy Liaison for the National Association of Realtors (NAR).