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In response to the Supreme Court decision in the Sackett v. EPA case, the U.S. Environmental Protection Agency (EPA) and Department of the Army announced a final rule amending the 2023 definition of “waters of the United States” (WOTUS), including the removal of the “significant nexus test.”

The agencies said the amended ruling only addresses parts of the 2023 rule that were determined invalid as a result of the Supreme Court’s decision in favor of the Sackett family.

The new rule removes the significant nexus test when identifying tributaries and other waters as federally protected. The significant nexus test required a federal regulator to determine whether a feature significantly impacted “the integrity of traditional navigable water.” While the significant nexus test was one major point of contention with the WOTUS definition from housing organizations, the NAHB said the new final rule still remains a challenge to housing affordability due to the regulatory burdens for builders and developers.

“The amended WOTUS rule represents a blow to housing affordability. It assures continued uncertainty regarding federal jurisdiction as established by the Supreme Court’s recent Sackett decision that made clear the federal government only has authority over relatively permanent water bodies,” NAHB chairman Alicia Huey said in a statement on behalf of the association.

The National Apartment Association (NAA) and the National Multifamily Housing Council (NMHC) also expressed disappointment with the final rule, stating it "will only serve to worsen housing affordability and increase costs for housing providers and residents." While expressing support for the protection of water resources, the two associations said the rule is "vague" and "creates uncertainty" for housing providers, while suggesting the new final rule is not in compliance with the Supreme Court decision from May.

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