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Bush Regulators Save Home Buyers From $3,500 Penalty

Thursday, 23 May 2002 12:00 AM

The EPA originally proposed a sweeping and restrictive new regulation for storm runoff at construction sites, estimated by the White House's Office of Management and Budget to cost $4.2 billion a year. It would have applied to all neighborhoods of 1 acre or more.

Translation: a huge bill for virtually every homeowner and small business. Renters would also suffer.

The EPA said the aim was to reduce the amount of sediment (mud) from stormwater drains by 80 percent. The tradeoffs, however, more than offset the perceived benefits.

OMB's Office of Information and Regulatory Affairs (OIRA), after running the proposal by agencies affected, estimated the cost of one provision at $3.3 billion annually, with estimated benefits of $1.1 billion. Yet another part of the proposal would cost about $859 million a year, as against a mere $37 million in "monetized benefits.”

EPA estimated saving $1.7 billion in infrastructure costs by building fewer or no sidewalks; narrower streets; fewer, shorter or no driveways; and open swales instead of underground storm sewers. Of course, the absence of sidewalks discourages pedestrians, though environmentalists say they want people to walk more and drive less.

The White House's OMB had a host of concerns about the idea, including the $3,500 additional cost of a home, which would price more than 1 million lower-income people completely out of the housing market. As always, increased costs would be passed on to renters as well.

Safety is also a concern. OIRA thinks there would be an increased "risk of accidental death to children due to fewer or no sidewalks and driveways, narrower streets, and permanent retention ponds that homeowners would be required to maintain."

Originally, it was estimated that the cost to each homeowner would be $2,200. Even that could make a significant difference for many home buyers. When you add the cost of building and maintaining the required retention ponds or silt traps, or other envisioned "permanent structures,” the cost would rise to $3,500, according to the economists at ORIA. That White House estimate had the support of the Department of Housing and Urban Development.

For every $1,000 increase in the price of a house, 300,000 less-affluent would-be home buyers are driven from the market, according to the National Association of Homebuilders. Regulators all too often fail to consider this reality.

Somebody in each locality would have to be hired to do the maintenance work, possibly in a pooling by homeowners in the neighborhood or a community association. They could either hire someone to do it, or they could do it themselves, which would still involve an extra cost, as well as raising questions of practicality and whether this amounted to punishing people for pursuing "the American dream” of owning their own homes.

Although it's easy and common for the media to attack bureaucrats, this is a story of how some smart and dedicated public servants, concerned about the impact of government on the people, stopped their well-intentioned but shortsighted brethren. After all, federal employees also prize home ownership, and some of them can spot the out-of-sight costs of regulations.

Actually, there are already stormwater regulations due to take effect in 2003, which caused the Small Business Administration to say, in effect, aren’t we jumping the gun here?

The original EPA plan, promoted by extremist "environmentalists” such as Natural Resources Defense Council, was widely seen as a huge unfunded mandate on a matter better addressed locally and regionally. After all, the runoff challenges found in the Arizona desert are different from those in the Mississippi Delta.

The Department of Transportation saw the proposed rule as impeding the construction of highways because of the limited amount of land available for rights of way.

The EPA, to its credit, accepted these and other concerns and reshaped the proposed rule to suggest options that should be considered, as it prepares to take public comment for four months. The rule signed by EPA Administration Christie Todd Whitman now offers alternatives, including no further regulations.

The bottom line for the Bush White House: Do we need Washington dictating to every neighborhood in every city and town in every state throughout America?

Consider if Al "Earth in the Balance” Gore had won the presidential election. What a price homeowners, small businesses and renters (i.e., everyone) would pay.

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The EPA originally proposed a sweeping and restrictive new regulation for storm runoff at construction sites, estimated by the White House's Office of Management and Budget to cost $4.2 billion a year. It would have applied to all neighborhoods of 1 acre or more....
Thursday, 23 May 2002 12:00 AM
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