Administration Acts on 3 Key NAHB Deregulatory Priorities

Two regulations will become effective under the Endangered Species Act (ESA) on Aug. 20. These ESA rules are jointly administered by two federal agencies — the U.S. Fish and Wildlife Service (FWS) and the National Oceanic and Atmospheric Administration (NOAA) — hereafter referred to as “the Service.”

A third final rule rescinding the ESA’s 45-year-old “harm” regulatory definition becomes effective next month.

Key Provisions for ESA Rulemakings

Last year, NAHB submitted regulatory comments supporting each of these three ESA rulemakings. In addition, each of these three final rulemakings were in a letter sent to the then incoming Trump administration.

These three ESA rulemakings include:

1. Expanding potential exclusions for areas impacted by final critical habitat designations.
(Effective date: Aug. 20, 2026)

• Requires the Service to exclude areas from a final critical habitat designation when presented with credible information (i.e., reasonably reliable information showing a meaningful economic impact) supporting an exclusion.
  
  
• Withdraws regulatory change prohibiting the Service from publicizing potential economic impacts resulting from a species listing and critical habitat designation.

Impact on NAHB members

NAHB members are the most likely sectors of the U.S. economy to benefit from the Service’s rule change. Prior economic analyses performed by the Service of proposed critical habitat have shown that when areas planned for future housing developments are designated as critical habitat, most of the economic costs resulting from added regulatory and permitting costs are borne by the housing sector.

Under this final rule, when presented with credible information of potential economic harm, the Service would now be compelled to use their discretionary statutory authority under the ESA to exclude those areas from a final critical habitat designation.

2. Rescinds “blanket rule” allowing the Service to extend identical federal protections under the ESA to threatened and endangered species.
(Effective date: Aug. 20, 2026)

• Restores Congress’ directive to the Service under the ESA Section 4(d) special rules, directing the agencies to issue concurrently with listing a threatened species allowing landowners to “take” a threatened species.
  
  
• Responds to the U.S. Supreme Court’s (2024) Loper Bright Enterprises v. Raimondo ruling, which ended Chevron deference and requires federal regulations to adhere to the best reading of the underlying federal statute.

Impact on NAHB Members

Under the final rule, when listing a species under the ESA as “threatened,” the Services concurrently promulgate species-specific 4(d) special rules authorizing the lawful “take” of a threatened species when the rule’s conservation measures are followed. NAHB members benefit from species-specific 4(d) special rules, allowing land development and construction activities that comply with proscribed species conservation measures.

3. Rescinds ESA’s regulatory definition of “harm.” 
(Effective date: Sept. 14, 2026)

ESA’s Section 9 prohibits any activity — private or public — resulting in the “take” of an endangered or threatened species. The ESA statute defines the term “take” to include actions such as “harass, harm, pursue, hunt, shoot, wound, kills, trap, or capturing species.”

In 1981, the Service finalized a controversial regulatory definition for the term “harm” that includes activities that result in “significant habitat modification or degradation where it actually kills or injures a listed species.” In 1995, NAHB joined a legal coalition of timber companies and private landowners from Oregon who challenged the Service’s “harm” regulatory definition before the U.S. Supreme Court because the regulatory definition could prohibit activities such as residential land development simply because it results in habitat modification.

In Babitt v. Sweet Home Chapter of Communities for a Great Oregon, a majority of the Supreme Court deferred to the Service’s “harm” regulatory definition by applying the legal concept of Chevron deference — which allows federal courts to defer to a federal agency’s reasonable interpretation of a federal statute — even if not the best interpretation of the statute. However, in 2024, the Supreme Court abandoned the Chevron deference in its Loper Bright ruling.

The Trump administration’s ongoing deregulatory efforts has seized upon the Loper Bright ruling to rescind federal regulations, such as the Service’s “harm” regulatory definition, that do not reflect the single best reading of the ESA’s statutory definition of “take.”

Impact on NAHB Members

The impact of the Service’s rescinding the “harm” regulatory definition will be most impactful for those NAHB members seeking ESA Section 10 incidental take permits, because routine activities such as land clearing activities may not trigger the ESA’s statutory “take” definition.