Citing “baseless” claims of environmental impact, the NAHB celebrated a June decision by the U.S. Supreme Court that will grant Clean Water Act permitting authority to Arizona's state government.
Until June, the EPA was in charge of reviewing all stormwater discharge permits filed by builders and developers in Arizona, the most common environmental permit sought, says Duane Desiderio, NAHB staff vice president for Legal Affairs. Builders often faced long delays and sometimes additional costs due to the EPA reviews, which included studying impacts on endangered species, Desiderio says.
After the cactus ferruginous pygmy owl was removed from the federal list of endangered species in April 2006, the EPA decided to shift Clean Water Act permitting authority to Arizona, making it the 45th state to take over that permitting activity.
BUILDERS 1, OWLS 0: Builders rejoiced following a U.S. Supreme Court ruling that removed the EPA from Clean Water Act permitting in Arizona.
But Defenders of Wildlife, a Washington-based environmental group, filed suit trying to force the EPA to maintain control of permitting, saying that the government should never have given the state that authority, because the EPA had not done an impact study on the effects of development on endangered species, such as the pygmy owl.
The NAHB joined the suit on the EPA's behalf, arguing that the Clean Water Act is separate from the Endangered Species Act, and that as long as Arizona met the nine criteria required to take over permitting authority, it should be given that authority.
“If you look at the requirements set forth in the Clean Water Act, endangered species concerns are not a prerequisite,” Desiderio says. “The point of the Clean Water Act is to protect and preserve water quality. Endangered species concerns are not listed among those.”
The Clean Water Act does take into account species living in water, such as fish, but not species that may require access to water, but are not living in it. The environmental groups argued those species, such as the pygmy owl, should be taken into account and that the EPA was the organization to run the permitting program. But the Supreme Court disagreed, ruling in favor of the EPA and the NAHB.
For builders, the decision clears up “significant concerns about how the stormwater program was being administered by EPA,” says Tim White, general counsel and executive vice president for Meritage Homes Corp., based in Scottsdale, Ariz. Meritage, which ranks No. 12 on the 2006 BUILDER 100, builds in multiple Arizona markets.
“The EPA was often times unable or unwilling to timely process and respond to requests for stormwater permits and often times extracted or sought to extract unreasonable concessions from builders,” White says in an e-mail to BUILDER.
The decision to put permitting in the hands of state officials should avoid unnecessary delays and costs, which builders had been dealing with, White says. In turn, the expedited permitting will “assist home builders in efforts to control the cost of housing,” White says.
In a statement heralding the decision, the NAHB quotes a U.S. Fish and Wildlife Service report that estimates Endangered Species Act consultations for the pygmy owl could delay development five to 18 months and cost between $1.7 and $2.7 million for onsite mitigation and project modifications. The study was released in 2002, and its cost estimates likely overstate the impact on builders, Fish and Wildlife Service public outreach specialist Jeff Humphrey says.
Still, the hassle builders faced from intensive environmental surveys meant to protect the pygmy owl and other at-risk species in Arizona, particularly the Southern parts of the state, was well known and much lamented. Now, those surveys will no longer be mandated by the EPA. But there are still protections in place geared towards animal species, Desiderio says.
“If you are dealing with a species in a wetlands and you need a permit from the Army Corps of Engineers to impact that wetland, there will be a consultation between the Army Corps of Engineers and the federal wildlife agencies over the impact on species living in that wetlands,” Desiderio says. “That still exists.”
Over Heated
Rinnai shows Californians how much energy they waste.
Motorists along California's highway 405 now have something else to look at: a billboard displaying the millions of dollars wasted each day by California homes and businesses that use traditional hot water tanks.
According to tankless water heater manufacturer Rinnai—the company responsible for the billboard—Californians with traditional hot water tanks are wasting approximately $5.1 million a day to heat their water.
“California has always been a trend-setting state when it comes to adopting energy-efficient technologies,” says Ervin Cash, Rinnai's senior vice president. “Our hope is that the nearly 200,000 drivers who go past our billboard each day will recognize the positive economic impact of going tankless and decide to make the move to tankless water heating.”
Rinnai says the billboard is meant to educate residents that the 13 million single-family homes in California waste about $1.9 billion a year, or more than $3,500 a minute. Traditional tanks store a limited amount of water and constantly heat and reheat it, whether or not it is needed. A tankless system only heats water that runs through the unit's heat exchanger, thus saving money and energy. - N.F. Maynard
Asset Allocation
A Colorado builder applies for a bank charter as a way to grow its mortgage business.
Sometime soon, the executive team running Colorado Springs, Colo.–based Classic Homes hopes to buy or start up a bank, through which Classic would expand its mortgage and title businesses.
Last year, Classic merged its title and mortgage companies with The Corundum Group, a financial consulting and investment services firm. That merger created Central Bancorp, a holding company that is 51 percent owned by Classic's principals—Chairman Jeff Smith, CEO Doug Stimple, CFO George Lentz, and Executive Vice President of Marketing Dan Winter. Bancorp has applied for a bank charter and has hired Scott Yeoman, a 25-year commercial banking veteran, who is the proposed president of Central Bank & Trust.
Classic's management team declined BUILDER's interview requests. But Yeoman notes that Smith and Lentz came from the banking industry and confirms a report in the Colorado Springs Gazette that the owners want to use the bank to boost Classic's mortgage operations—which made $225 million in loans in 2006—to more than $1 billion in annual loans within a decade and to expand the bank itself to five branches over that period.
However, the bank won't do any direct business with the home builder because, Yeoman explains, regulators frown upon lending institutions engaging in activities with insiders. - J. Caulfield