On June 23, 2014 the U.S. Supreme Court ruled that the Environmental Protection Agency (EPA) “does not have the authority to require multifamily builders to apply for costly pre-construction permits for greenhouse gases that may come from buildings they construct.”

The case against the EPA revolved around whether the agency has the power under the Clean Air Act to regulate greenhouse gas emissions from stationary sources that could include everything from factories, refineries and power plants to apartment and commercial buildings.

Kevin Kelly, chairman of the National Association of Home Builders (NAHB) and a home builder and developer from Wilmington, DE, stated that he’s pleased with the U.S. Supreme Court’s decision.

Because of the way the EPA interpreted the statute, the agency sought to treat apartment complexes as if they are power plants. That makes absolutely no sense and would have dealt a major setback to the housing recovery. Today’s verdict strikes an important blow against federal agencies overreaching their authority.

If the EPA had completely won the case, the expensive pre-construction permit for greenhouse gas emissions many builders and developers would be forced to obtain would have severely affected apartment and mixed-use development. Additionally, some single-family and potentially even master-planned community development could also have been affected. This ruling against the EPA represents a significant win not only for multifamily builders, but for all builders that deal with excessive and unlawful EPA rules.

While KWA still considers the ruling an especially big win to not add additional costs to our clients, overall construction costs continue to rise. Stay tuned for our next post where we discuss factors that significantly impact construction budgets.

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