Court Sends WOTUS Rule Back to the EPA
In a victory for NAHB and the housing industry, the U.S. District Court for the Southern District of Texas declared that the Environmental Protection Agency (EPA) violated the Administrative Procedure Act when drafting the Obama-era ‘waters of the United States’ (WOTUS) rule in 2015.
In 2015, NAHB and the Texas Association of Builders, among others, filed a lawsuit in the Southern District of Texas challenging the definition of the 2015 WOTUS rule. The court has issued a partial decision on NAHB’s summary judgement motion by remanding the 2015 WOTUS rule back to the EPA. However, the court did not vacate the rule.
The court’s ruling addressed NAHB’s procedural challenges to the rule. The court found that when proposing the rule, the EPA and U.S. Army Corps of Engineers defined “adjacent waters” based on hydrology and ecology. But when issuing the final 2015 WOTUS rule, the agencies defined “adjacent waters” based on precise numerical distances.
This change did not provide the public with sufficient notice to comment on distances, and therefore, the court stated that the final rule was not a “logical outgrowth” of the proposal.
The second reason the court found fault with the rule is that the agencies relied (heavily) on the “Final Connectivity Report,” yet closed the notice and comment period before that report was final. Therefore, the court said the agencies did not give commenters the opportunity to refute the “most critical factual material used to support the Final Rule,” and failed to provide a meaningful opportunity to comment.
While the court remanded the 2015 WOTUS rule back to the EPA, it kept in place the injunction to keep the rule from taking effect in Texas, Mississippi and Louisiana. This is the first summary judgement decision from any court concerning the 2015 WOTUS rule and is important because it will provide momentum for the EPA to ultimately repeal it.
For more information, contact Tom Ward at 800-368-5242 x8230.
Latest from NAHBNow
On the latest episode of NAHB podcast Housing Developments, NAHB Chief Economist Dr. Robert Dietz joins CEO Jim Tobin and COO Paul Lopez to discuss the latest economic forecasts and how they have changed this year due to geopolitical turmoil.
The New American Remodel 2027 will be much more than a beautiful show home. It will highlight just how far building products and techniques have advanced in a relatively short period of time.
Latest Economic News
The share of new single-family homes built with individual wells and septic systems increased in 2025 compared to the previous year. According to NAHB’s analysis of the Census Bureau’s Survey of Construction (SOC), approximately 10% of single-family homes started in 2025 were served by individual (private) wells, and 17% relied on individual septic systems.
In the third quarter of 2026, the NAHB Remodeling Market Index (RMI) posted a reading of 62, up one point compared to the previous quarter. The RMI has remained within a narrow band between 59 and 70 for the past four years.
Mortgage application activity declined as the 30-year fixed mortgage rate rose sharply. The Mortgage Bankers Association’s (MBA) Market Composite Index, a measure of total mortgage application volume, decreased 7.7% month-over-month in September on a seasonally adjusted basis. Compared to a year ago, total mortgage applications were lower by 35.4%.