State official: Real estate in Eastern N.C. will lose value under new EPA water regulations

RALEIGH – North Carolina’s chief environmental regulator, Donald van der Vaart, said Wednesday that virtually all real estate in North Carolina east of Interstate 95 would lose value under the Environmental Protection Agency’s new water regulation plan. Van der Vaart, secretary of the N.C. Department of Environment and Natural Resources, was a guest on Tyler Cralle’s talk radio program on WAAV-AM in Wilmington.

“It’s essentially the taking over of much of North Carolina’s land, especially east of I-95, to be regulated by the EPA and its sister agency, the Army Corps of Engineers,” van der Vaart said of the expansion of regulation called Waters of the United States, which as a federal agency rule does not need Congressional approval.

Van der Vaart said that the mere fact that EPA and the Corps of Engineers could regulate a landowner’s property will affect real estate values.

“A lot of our farming community depends on the equity in their land to develop their businesses and expand their businesses – that would take an immediate shot,” van der Vaart said. “Your bank, your lenders, are not going to be as certain about what they can do with that land now that it’s regulated.”

 

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Farmers and rural advocates nationwide have loudly opposed the rules, most notably through the U.S. Farm Bureau’s “Ditch the Rule” campaign. The EPA has responded with a public relations campaign of its own entitled “Ditch the Myth,” which aims to convince Americans that federal intervention is needed to protect the nation’s waterways and that the rule is not the overreach many in the agricultural community worry it is.

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Is uncertainty ending or just beginning?

The North Carolina chapter of the Sierra Club declined a request to comment on the issue of land value, but the national organization has praised the Obama administration for issuing the rule, releasing a statement that said that the “new rule will finally restore protections, as originally intended, to almost all of the nation’s fresh waters,” and that polluters had “exploited the uncertainty” about what waters are subject to regulations.

But Anne Coan, director of environmental affairs for the N.C. Farm Bureau Federation, says that the rule adds an entirely new level of uncertainty to what wetlands and streams can be regulated.

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Anne Coan, director of environmental affairs for the N.C. Farm Bureau Federation

“Now there are lands that will be automatically jurisdictional that include things like ephemeral streams – water is only there for a couple of hours after it rains – and they have indicators that [experts] can say ‘well this is a stream,’ but the average person is not going to know,” said Coan, who has been researching environmental issues for the N.C. Farm Bureau for more than 36 years. “That is going to put a chill on what people feel they are able to do with their property.”

Tyler Newman, a lobbyist with the Business Alliance for a Sound Economy in Wilmington, said that the case-by-case nature of the new rules will add due diligence costs and possibly reduce property values, but he also said that much about the new rules was unclear.

“There is no size threshold. Say you want to expand your driveway and you’re next to a creek that runs into the waterway – do you have to go to the Corps to get a permit for that? I think that’s an unknown,” Tyler said. BASE represents real estate agents, home builders and others in Southeastern North Carolina.

According to Newman, part of the cost of the new rules will be property owners and potential buyers having to hire professionals to visit a site to determine whether wetlands or ephemeral streams are on site. Coan agreed with Newman the impact of due diligence costs, but also said that the WOTUS rules will undoubtedly lead to lost land value in many cases.

“When you look at the fair market value of land, that’s based on willing buyers and willing sellers. And when someone chooses to sell their property, the buyer is going to look at whatever obstacles might be in place to use that property,” Coan said. “The obstacles in this instance will be additional permit requirements, more areas on the property that have to be avoided because they are now going to be regulated under this new rule.”

Real estate agents contacted for this article were not sure of the effect of the new rules on property values. Bobbi Bell, a real estate agent with Century 21 Sweyer & Associates in Burgaw, was unfamiliar with the changed rules. She said she thought the “mini-estate” properties she mostly deals with in rural Pender County would probably not be affected, since most buyers were looking for acreage to buy to leave it natural, other than building one home on a lot.

Maps of changes hard to come by

Uncertainty about what the new rule covers is a theme that runs through many of the reactions to the WOTUS rule. And the Obama administration has not done much to quell the ambiguous nature of the rule. In its public statements, it has claimed that the rules are very necessary to protect clean water, but it also claims that the rule does not expand the EPA’s jurisdiction.

This map shows the percentage of the population of each county that gets drinking water from surface sources, such as streams and reservoirs. Most of eastern North Carolina gets its drinking water from groundwater sources such as aquifers. Source: EPA.

This map shows the percentage of the population of each county that gets drinking water from surface sources, such as streams and reservoirs. Source: EPA.

 

“The rule does not protect any new types of waters, regulate most ditches, apply to groundwater, create any new permitting requirements for agriculture, or address land use or private property rights,” the EPA’s website says. What the agency apparently means is that the Clean Water Act always meant for these newly regulated wetlands and streams to be included, so any new regulatory requirements would just be correcting what has not been regulated properly for the past forty years.

EPA Region 4 spokeswoman Davina Marraccini did not respond to requests for maps of expanded regulation, only saying that “it is estimated that under the Clean Water Rule there will only be a 3 percent increase nationwide in the water bodies found to be protected.” Other groups have had trouble getting well-defined answers on how regulation will change as well.

This map, prepared by N.C. State University soil scientists, shows hydric soils in the state. Areas with hydric soils can be considered wetlands under the new WOTUS rule.

This map, prepared by the U.S. Dept. of Agriculture’s NRCS, shows hydric soils in the state. Areas with hydric soils might be considered wetlands under the new WOTUS rule. Darker shading indicates a higher percentage of hydric soils for an area.

 

“In our attempts to educate folks we had reached out to the Corps, to get them to come speak, but they were hesitant to do so. So a lot of this unclear, without the maps.” Newman contrasted those efforts with online flood maps, which allow property owners, real estate agents or anyone else to see property characteristics.

Legal foundation uncertain for WOTUS

Not only is the extend of regulatory expansion unclear, the future of the rule itself is uncertain. A federal judge in North Dakota blocked the EPA from enforcing the new rule in August, just one day before is was set to take effect, citing concerns about its legality under the Clean Water Act. But shortly after the injunction was announced, the EPA issued a statement saying the agency would continue to apply the new WOTUS rule in all parts of the country except those in the Sixth Circuit, the federal circuit that includes North Dakota and nearby states.

The North Dakota judge ruled that the Obama administration likely overstepped its legal authority in issuing the rule and likely failed to comply with requirements when promulgating the rule. This ruling came on the heels of another federal court in Georgia denying a petition for injunction by several other states and North Carolina’s Department of Environment and Natural Resources.