The Law & You: More Wetlands Permits Loom in Developers' Future

Army Corps of Engineers plans to expand permit types.

November 1, 1998

Practitioners working to balance protection of environmentally sensitive areas with preservation of private property rights warn that a more involved wetlands permitting process lies ahead.

The Army Corps of Engineers plans to make sweeping changes to several of its streamlined nationwide permit processes for development on wetlands. The most common of those processes, and the one that will be changed the most, is called nationwide permit 26 (NWP 26).

The corps says it needs to revise the permitting process to better protect sensitive wetlands and to allocate staff resources more efficiently.

In a victory for property owners, the corps has moved back its planned effective date for the changes from December 1998 to March 1999. That will help ensure the transition is smooth, NAR analysts say.

More preliminary reviews

Under the change to NWP 26, the corps will replace the current single permit with several new permits.

The existing permit process enables developers of certain projects to avoid having to apply for an individual permit, a detailed and time-consuming process that can raise development costs and force developers to scale back project plans, ultimately impacting buyers.

Under the current process, projects impacting three acres of wetlands or fewer are eligible for streamlined processing under NWP 26. That streamlined process isn’t entirely free of review, however. Projects must still pass certain tests. For example, projects in spawning areas must be cleared to ensure the impact to the area will be minimal.

Under the proposed changes, projects that are now eligible for preliminary review under NWP 26 will instead be reviewed on the basis of the project's nature or the kind of impact the project is likely to have.

“This type of activity-based system rightly places the focus on the activity within a wetland, instead of on the wetland itself,” says Mike Ford of NAR’s Land Use, Property Rights, and Environment Forum. Ford is president of the New Jersey Association of REALTORS®.

NAR supports the activity-based permits but has concerns with other aspects of the proposed process.

Mitigation may increase

The failure of the current NWP 26 process to distinguish between different types of activity has been a problem for property owners and developers required to mitigate impacts to wetlands, say practitioners close to the issue. For example, mitigation for installing utility lines in a wetlands or developing housing units in or near a wetlands area shouldn't be the same as for more disruptive projects.

NAR supports mitigation banks and hopes the new process will pave the way for their increased use. Mitigation banks allow property owners or developers to contribute to the cost of creating manmade wetlands elsewhere, usually nearby, to mitigate the impact of the lost wetlands.

NAR wants the corps to specify that in the new process the mitigation banks are a viable technique.

Also under the new review process, the corps would expand its authority to review other types of aquatic areas, an expansion that NAR says raises jurisdictional concerns.

“NAR is concerned that the corps is overreaching its regulatory authority,” says Ford, broker-owner of Mike Ford Agency, Clark, N.J.

“This is a much broader extension than simply permitting impacts to wetlands.”

In another change, the corps would give its regional engineers and other public agencies more discretion in setting region-specific permit requirements or banning nationwide permits in certain regions altogether.

That means for areas deemed particularly sensitive, projects would have to apply for an individual permit.

Impact on practitioners

“The tougher process could ultimately make real estate practitioners’ job more difficult,” says Peggy Ann McConnochie, chair of NAR’s Land Use, Property Rights, and Environment Committee. She's with Alaska Coastal Homes in Juneau.

Some developers may opt not to develop a project, reducing sales opportunities. Projects that proceed with development may become more expensive, making them a harder sell.

McConnochie says the real issue isn’t the increased number of reviews, but making sure the corps doesn’t impose a permit requirement on a project in a nonvital area.

Alaska is 98 percent wetlands, so making finer distinctions about what constitutes an environmentally sensitive wetland and what’s merely a puddle isn’t an academic issue. “We deal with wetlands problems every day,” McConnochie says. “More regulation isn’t the way to go.”

NAR participated in hearings this fall on the corps’ proposed changes and continues to work with the corps and other interested groups.

“We recognize that some restrictions serve the interests of all, but owners should have confidence that the value of their property won't be unduly diminished by government action,” says Ford.

Property Interests Win Small Wetlands Battle

Property owners won a small victory this summer. A federal appeals court ruled that the U.S. Army Corps of Engineers acted improperly when it regulated dredging activity the same way it regulates activity that adds fill material to navigable waters, including wetlands.

The decision means the federal government can’t holdproperty owners to certain permit requirements when they remove soil from wetlands as part of development activity. It also helps lighten the burden for utility and other projects that support housing development.

The case was decided June 19 by the U.S. Court of Appeals, District of Columbia Circuit.

National Mining v. U.S. Army Corps, Nos. 97-5099 and 97-5112

Robert Freedman

Robert Freedman is the former director of multimedia communications at NAR.

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