EPA’s WOTUS Revision: What It Means for Multifamily Housing & Developers
The U.S. Environmental Protection Agency (EPA) made a major announcement last week which is a regulatory shift, with the administrator Lee Zeldin has confirmed that the agency will review and update on the definition of “Waters of the United States (WOTUS)" under the Clean Water Act (CWA).
The goal of this is to reduce the permitting costs and regulatory hurdles that are currently slowing down the housing and commercial development.
"We want clean water for all Americans supported by clear and consistent rules for all states, farmers, and small businesses," Zeldin stated. He emphasized that the Biden administration’s WOTUS definition drove up costs, creating unnecessary burdens for developers.
Why Does This Matter for Housing Supply?
The already struggling multifamily housing industry is welcoming the announcement. The Multifamily housing industry is already struggling with rising costs, regulatory overreach, and a historically low housing supply.
"Boosting the nation’s housing supply has simply never been more important than it is today, especially as multifamily permits and starts are dropping across the country," said Nicole Upano, assistant vice president of housing policy and regulatory affairs for the National Apartment Association (NAA).
The National Multifamily Housing Council (NMHC) also praised the move.
"This issue has long been an unnecessary barrier to new development, and we are optimistic that EPA’s work will increase certainty for property owners and decrease compliance costs—ultimately lowering housing costs for rental housing providers and residents," said Colin Dunn, NMHC vice president of public affairs and communications.
What Changed?
This revision from EPA is in response to the finding of Supreme Court’s May 2023 ruling in Sackett v. EPA has clarified that the Clean Water Act is only applicable to permanent, standing, or continuously flowing bodies of water—such as streams, rivers, lakes, and oceans.
Wetlands are only covered if they have a direct surface connection to those bodies of water. This ruling significantly narrows the reach of WOTUS, reducing federal overreach on private land.
What It Means for Multifamily Housing?
Multifamily developers and operators can breath a bit easy and look forward to new opportunities. The previous broad WOTUS definition created major barriers for land development, requiring costly and time-consuming environmental permits for areas that arguably had little to do with water protection. This was a major cause of slowing down projects while increasing costs, which leads to higher rents for residents.
With a narrower WOTUS scope, developers will face fewer regulatory obstacles, making it easier to bring new multifamily housing to market. This could help ease some of the supply shortages that have driven up housing costs nationwide. Additionally, with lower compliance costs, investors may find new construction projects more attractive, leading to increased development in high-demand markets.
A Step Toward Smarter Development
This is a long overdue and much-needed correction for the industry. For too long, vague and overly broad regulations have increased compliance costs, delayed projects, and reduced the supply of desperately needed housing. It’s simple: excessive regulation makes housing more expensive.
The multifamily industry has been pushing for regulatory relief for a while now. In February, the National Association of Home Builders (NAHB) testified before the Senate Committee on Environment & Public Works about the impact of environmental regulations on housing costs. Shortly after that, NAA and NMHC had a word with federal agencies about housing costs and to roll back rules that hinder and delay development.
Bottom Line
Developers and investors should see this as a step in the right direction. When permitting is easier and costs are lower, more housing gets built. And in today’s market—where affordability and supply challenges dominate—that’s exactly what’s needed.
At Amenify, we’re committed to helping property owners and operators optimize their assets. Smarter regulations mean better margins, increased supply, and a healthier market. The EPA’s move is a win—not just for developers, but for the entire rental housing ecosystem.
