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States Take on Wetland Regulation: What Developers Need to Know



Last year, the Supreme Court ruling in Sackett v EPA led to changes in the regulations that govern the "navigable" waters of the United States (“WOTUS”). The regulation does not clarify what constitutes a "relatively permanent" body of water, prompting states to legislate what classifies as wetlands, isolated swamps, bogs, and other peripheral areas.


Regulations that protect only minor or isolated wetlands that offer no real ecological benefits often drive-up housing costs. Several states have taken action to remedy this problem. In Oregon, Governor Tina Kotek and state legislators have established a housing council to tackle the state’s housing crisis, and among various advisory proposal, one suggestion is to temporarily reduce the state's extensive wetlands permit program for five years to spur economic development. North Carolina recently enacted legislation that permits less stringent development regulations of isolated wetlands not linked to other water bodies. Indiana has also passed a law that downgrades certain high-quality Class III wetlands to lower-priority Class II wetlands, thereby lowering the development costs associated with these lower quality wetlands. The Tennessee legislature is reviewing a bill that would prevent the state from designating "real property" as a wetland unless it is already covered by the federal Clean Water Act. Similarly, Missouri is evaluating a bill that would reduce state protections for small streams and major aquifers, potentially affecting wetlands.


On the other hand, some states are enhancing their regulatory frameworks. Overall, twenty-four states maintain some form of wetland regulations, with Wisconsin, Florida, and Virginia implementing some of the most rigorous. Earlier this year, Wisconsin’s Governor signed a bill establishing a grant program to assist local governments in restoring wetlands, thus reinforcing the state's robust wetland protections that have been in place since the 1990s.  


As state legislatures and governors leverage their newfound autonomy in the era following Sackett, more legislation over wetland regulations will be forthcoming.  Navigating the complex interplay of housing affordability and environmental protection—issues that frequently conflict—is sure to spark further debate.

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