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SBA Office Understands Builders' Need for Economic Analysis Under ESA

By Marty Mitchell

Unlike many federal agencies that turn a deaf ear to concerns over the cost of their regulations on industry, the Small Business Administration’s Office of Advocacy listened, and responded, when NAHB told it that critical habitat designations for the cactus ferruginous pygmy owl would have a damaging impact on builders and other small businesses in the Tucson metropolitan area.

On behalf of builders in Arizona, NAHB has met with the office several times in recent months to bring to its attention a habitat designation by the U.S. Fish and Wildlife Service that will regulate more than 1.2 million acres of the state’s Pima and Pinal Counties at a cost of $108 million to businesses over a 10-year period.

The Office of Advocacy, which is responsible for representing the interests of small businesses in the regulatory process, on June 27 urged the Fish and Wildlife Service to take these actions immediately:

  • Conduct vitally important outreach to the small businesses that will be affected by the land-use restrictions for the pygmy owl


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  • Put together and publish an analysis of what the critical habitat rule would cost small businesses
  • Consider alternatives that would prove less costly to small businesses

The Office of Advocacy is also charged with seeing that other federal agencies comply with the Regulatory Flexibility Act. That law requires the agencies to explain the fiscal impact of their proposed rules on small businesses, unless they “certify” that the rule will not have a significant effect on them.

In the case of the pygmy owl, the service went the certification route, and to that the Office of Advocacy took exception.

“The Fish and Wildlife Service is incorrectly measuring the impacts of the rule on small business,” the office said in its comments last month on the habitat designation. Furthermore, “the Fish and Wildlife Service has not explained to the public what benefit the proposed rule would provide for the pygmy owl.”

For years, NAHB has insisted that environmental regulations such as those used to establish habitat under the Endangered Species Act must be clearly justified by good scientific data and formulated with a consideration of their impact on the local economy.

It is refreshing, encouraging and about time to hear that same argument come from an agency of our federal government.

For more information on the Office of Advocacy and its work representing the interests of small businesses in the regulatory process, click here.

For more information on NAHB’s work with SBA's Office of Advocacy, e-mail Bruce Lundegren or call him at 800-368-5242 x8305.

For more information on the pygmy owl critical habitat designation, e-mail Christopher Galick or call him at x8663.

Marty Mitchell is chair of the NAHB Environmental Issues Committee.

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