April 18, 2011
Nation's Building News

The Official Online Newspaper of NAHB

NAHB Tells Federal Agencies of Urgent Need for Relief From Overly Burdensome Rules

NAHB has added the Environmental Protection Agency, the Occupational Safety and Health Administration, the Department of Energy and the Department of Commerce to its list of federal agencies to which it has submitted comments on the urgent need for relief from overly burdensome regulations.

The agencies are responding to an executive order issued in January by President Obama for them to periodically review their regulatory programs to make them more effective and less burdensome.

In addition, NAHB is encouraging leaders of state and local home builders associations to submit comments and to attend a series of Administration-sponsored listening sessions to ensure that regulators are aware of the regulatory burdens carried by home builders, remodelers and developers.

Last month, NAHB submitted comments to the Department of the Interior, focusing mainly on the agency’s enforcement of the Endangered Species Act as a good place to begin the reform process. (For a related story in the April 4 issue of NBN, click here.)

NAHB sent similar comments to the Commerce Department, which also enforces the ESA through the National Oceanic and Atmospheric Administration.

In all of its comments, NAHB has been pointing out that residential construction — one of the most heavily regulated industries in the U.S. — is trying to extricate itself from the most dire economic conditions since World War II.

Regulations are most effective when they take into account important factors, NAHB said in its comments letter:

  • Number of affected entities — including those who must comply with the regulation and those who must administer it. “The most heavily regulated sectors [should be] identified and the regulations affecting that sector reviewed and streamlined.”

  • Businesses of affected entities. “The agencies should consider affected industries’ sizes, locations and the number of people they employ, with an emphasis on improvements placed on those that have been particularly impacted by the economy or other mishap, and that have a proven track record of creating jobs.”

  • The cost/benefit ratio. Costs must include both compliance (for the affected business) and administration (for the government). “Each agency must be very clear in describing how the benefits were calculated and what assumptions or unknowns exist within the data. NAHB also believes that looking at the cost/benefit ratio can be a useful tool to prioritize projects.”

  • Risk. NAHB pointed to the wording in the executive order, which says, “in setting regulatory priorities, each agency shall consider, to the extent reasonable, the degree and nature of the risks posed by various substances or activities within its jurisdiction.”

  • Availability of new data or information. “Because new information can significantly impact the achievability, efficacy, cost or value of a regulation, its existence should be a key factor in determining which rules are to be examined.”

  • Duplication. Lack of coordination among and within agencies leads to regulatory overlap, NAHB said, pointing to two examples — the DOE and EPA versions of Energy Star programs and differences between state and federal endangered species protection regulations. The executive order specifically directs the agencies “to promote coordination, simplification and harmonization.”

  • Changes in technology, cost or best practices. “For example, in 2008, EPA finalized the Lead: Renovation, Repair and Painting Rule predicated on the development of new technology.” However, “the lead-based paint test kit integral to the cost-effectiveness of the rule was not developed as expected. As a result, regulated parties were left with significantly more expensive methods for lead paint testing than originally estimated,” which is a good reason for revisiting the rule. “In considering changes in technology, cost or best practices, the agencies are strongly urged to rely on the regulated community to help identify potential impacts,” NAHB said.

  • Impact of other/newer rules. “Sometimes new laws or rules are adopted that effectively supersede existing regulations, but the regulations may remain on the books. Likewise, new rules could obviate the need for, or benefit of, the target regulation.”

Agency by Agency

The NAHB comments to the EPA highlighted specific examples of regulations that are “ripe for immediate review.” Among them:

  • Confusing jurisdictional decisions on what constitutes a wetland

  • The continuing confusion over storm water management rules and their associated expenses

  • The lack of a sensible strategy for the regulation of renovation and repair work where lead paint might be present

Many of the attempts of government agencies to work with those required to comply with new regulations have been half-hearted at best, NAHB said:

  • For example, NAHB members on a review panel charged with providing a small business perspective on the impact of compliance with new EPA storm water management regulations were unable to estimate what it would cost them to comply because they were not provided with enough information on the upcoming rule.

  • OSHA implemented what it calls its “Multi-Employer Citation Policy” — “a policy that effectively expands the employers’ responsibilities” — before going through the proper procedures to establish its cost to businesses. Under this policy, OSHA inspectors are instructed to issue hazard citations to employers on the jobsite even if their own employees are not at risk and even if they did not create the alleged hazard.

  • Not only did attempts by the DOE to push ever higher thresholds for energy efficiency in new homes go beyond what Congress had intended, the data used in code hearings to justify the new thresholds had never been made available, despite repeated requests for it by NAHB.

In the coming weeks, NAHB will submit additional comment letters to the Department of Housing and Urban Development and other agencies charged with overseeing financial regulations that govern home builders.

For more information, email Susan Asmus at NAHB, or call her at 800-368-5242 x8583; or contact Michael Mittelholzer, x8660.

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