21st Century ROAD Bill Ushers in Major Changes to Environmental Reviews
This is the fourth in our weeklong series analyzing in-depth the 21st Century ROAD to Housing Act, the most consequential federal housing law in years.
Monday: Policy reforms
Tuesday: New pilot programs
Wednesday: HOME program revisions
Today: Environmental regulatory relief
Friday: Federal studies, reports, and technical guidance
Stay tuned for a webinar series starting later this summer.
Among the most persistent barriers to affordable housing production often are well-intentioned regulatory requirements that add cost and/or delay project closings or construction schedules. House Housing and Insurance Subcommittee Chairman Mike Flood (R-NE) has characterized environmental review rules as one of the “four horsemen of the housing apocalypse” driving up housing costs (the others are Davis Bacon; Build America, Buy America; and Section 3).
The comprehensive housing legislation, the 21st Century ROAD to Housing Act (the Act), enacted earlier this month makes major changes to environmental review requirements under the National Environmental Policy Act (NEPA) with the goal of increasing efficiency and streamlining rules to remove these barriers.
Today’s blog post drills down on what those reforms are and how they will change the environmental review requirements for affordable housing.
Exemption on Construction or Modification of Residential Housing Located on an Infill Site (Section 103): Exempts most Rural Housing Service-funded projects from NEPA requirements related to the construction or modification of residential housing located on an infill site. The exemption is provided for housing financed under Sections 501, 502, 504, 515, 533, and 538 of the Housing Act of 1949. The Act requires the U.S. Department of Agriculture (USDA) to submit a report to the House Financial Services Committee and Senate Banking Committee evaluating the policy change within five years of the Act’s enactment.
Better Use of Intergovernmental and Local Development (BUILD) Housing Act (Section 205): Cuts red tape around environmental reviews, empowering state, local, and tribal governments to streamline reviews and increase housing development. Specifically, the Act allows HUD to designate certain housing assistance as “special projects” to simplify compliance with NEPA and allows HUD to delegate and coordinate certain housing reviews to states and localities.
Unlocking Housing Supply Through Streamlined and Modernized Reviews Act (Section 206): Right-sizes NEPA review for small-scale and infill housing projects to simplify the review process and get projects to construction faster. Specifically, the Act simplifies compliance with NEPA for the acquisition or repair of public facilities, such as water or sewer lines and curbs or sidewalks; new construction or rehabilitation of unit residential buildings and related infrastructure of one- to four-unit buildings; acquisition, disposition, or equity loans on an existing structure or acquisition of vacant land; acquisition of certain open spaces or residential property; conversion of existing office buildings to residential development; new construction, development, demolition, acquisition, or disposition of properties with five or more units (details differ based on number of units and placement of units); infill projects; and acquisition of properties in a floodway/floodplain or other areas designated to have been impacted by certain environmental threats. Further, the Act recategorizes as fully “exempt activities” from environmental review requirements tenant-based rental assistance; supportive services; operating costs; economic development activities; activities to assist home buyers purchase an existing home or a home under construction; predevelopment costs; approval of supplemental assistance, such as insurance; and emergency assistance to homeowners or renters for the repair or replacement of HVAC, hot water heaters, and other necessary utilities. These changes apply only to funds appropriated after the Act’s enactment.
HOME Investment Partnerships Reauthorization and Reform Act (Section 501): This section includes a categorical exclusion of certain activities carried out with HOME funds from the NEPA environmental review. These activities are new construction infill housing projects, acquisition of real property for affordable housing purposes, rehabilitation projects, and new construction of projects with 15 or fewer units. The Act also provides that, to the extent practical and permitted by law, properties that have undergone an environmental review are not subject to a duplicative environmental review solely because of the addition, substitution, or reallocation of other federal assistance so long as the project’s scope, scale, and location are unchanged since the previous review. Lastly, developments need to go through only a single environmental review if they receive funding from two separate entities.
Streamlining Rural Housing Act (Section 802): Directs HUD and USDA to coordinate by establishing a joint environmental review framework for housing projects funded by both agencies. The departments would need to enter into a memorandum of understanding within 180 days of the Act’s enactment to evaluate categorical exclusions, develop a process for streamlining adoption of environmental impact statements and environmental assessments approved by the other department, and evaluate the feasibility of a joint physical inspection process for jointly funded properties. The Act also calls on the agencies to submit a report to the House Financial Services Committee and Senate Banking Committee within a year of enactment with recommendations for legislative, regulatory, or administrative actions to further improve efficiency and effectiveness of programs.
