New storm water regulations would be too costly

February 24, 2010

The new state storm water regulations set to go into effect this spring, when applied to approved projects and to redevelopment properties, would have severe consequences, including a loss of density, that will cause a substantial increase to the costs and the value/economics of a project. Certain environmental interest groups are arguing that the several hundred developers who are protesting the regulations would actually save money. The fact is that the construction industry, which is in the best position to judge the impact of the new rules, clearly understands that costs will increase significantly -- in many cases to levels that will doom needed projects and the jobs they bring. Local governments have drawn similar conclusions.

Certain environmental interest groups have relied heavily on an EPA study that did not review Maryland's proposed regulations and, in fact, was done before Maryland even developed the regulations. When you look at the details of that study -- instead of the Chesapeake Bay Foundation's self-serving interpretation, you discover:

•  Many of the projects revealed significantly increased costs;

•  The bulk of the projects examined were greenfield development, not urban redevelopment;

•  Loss of density (sprawl) was not a consideration;

•  Numerous estimated savings were attributed to a reduction of road width, yet the fire marshalls and public works departments in Maryland would not permit this; and

•  Higher maintenance costs were not accounted for in these studies.

As a matter of fact, there were no case studies of private or public redevelopment of high-density, mixed use projects. So the EPA study does nothing to address our legitimate fears.

These environmental interest groups also suggest that Maryland's new regulations are similar to those already in place in Montgomery County and Philadelphia. Again, the facts, when examined objectively, show that is inaccurate. There are some common elements, but the differences are great enough to greatly reduce the cost impacts.

It is true that in Montgomery County there is a current requirement for a 100 percent reduction of impervious surfaces. However, Montgomery County allows many credits that Maryland's new regulations will forbid. To mention a few: Montgomery County allows a 100 percent credit for a green roof (Maryland does not); Montgomery County allows environmental site design to the maximum extent practicable for water quality (Maryland does not). These differences have huge impacts on cost and density in the real world.

CBF also cites Philadelphia as an area using similar standards -- yet upon looking at the facts, there are much bigger differences than similarities. Philadelphia requires a smaller reduction of impervious surfaces, allows a greater credit for green roofs and provides more alternatives and flexibility in meeting its goals.

The real facts are that every bit of hard evidence out there indicates that Maryland's regulations will greatly increase costs. EPA's hypothetical studies and the details of the Montgomery County and Philadelphia standards simply illustrate how extreme the new Maryland regulations are compared to reasonable standards. This problem is compounded by the state's insistence that the regulations apply retroactively to projects that are working their way through the long development pipeline.

There has been a suggestion that the new regulations will create more "green jobs" -- apparently referring to the additional huge costs that the counties and municipalities will incur in maintaining the new environmental site designs. That burden will, of course, fall on taxpayers, not developers and those jobs can only be created if the new regulations do not kill new development. We know that the new regulations will kill projects, and that is why we are certain that the regulations will directly cause the loss of jobs in the construction industry.

Recent articles have cited a 41 percent growth in impervious area with an 8 percent population increase, and that these hard surfaces have created the stormwater pollution problem. This data is factually inaccurate. Based on our consultant's analysis of the EPA Watershed Model 5.2, the EPA's data shows a Bay watershed population increase of 10.3 percent and an increase in impervious surfaces of 14.2 percent from 1990-2000. Further for the state of Maryland, from 1990-2000, the Maryland population increase was 10.7 percent while the impervious surface increase was 15.2 percent.

The Maryland Home Builders supported the 2007 storm water legislation, and we continue to support keeping the May 4, 2010 standards for new projects entering the long entitlement process. But the new stormwater regulations should not apply retroactively to projects that are working their way through the approval process.

Lastly, we think the dialogue stemming from the debate over these regulations is good because it is important this time around when bay clean up goals are set that they have a chance of being met. To be direct, development contributes 3 percent of the sediment pollution to the bay and minuscule amounts to the nitrogen and phosphorous pollutants. The development industry is prepared to do its part. Development cannot shoulder the pollutant burden by itself. It would be too costly (thus impacting affordability), and it would not happen and yet another goal would not be met.

So let's get all of the stakeholders at the table, and let's come up with revenue strategies, policies and programs that allow all of the pollutant sources to shoulder their proportionate responsibility. The development industry is ready.

Thomas M. Farasy

The writer is president of the Maryland State Builders Association.

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