Builders: What are the real facts?

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By Thomas M. Farasy
President, Maryland State Builders Association

I read with great interest the recent OP ED by the Chesapeake Bay Foundation’s entitled “New Stormwater Rules won’t increase costs.” The editorial rightly calls for the "facts" and we totally agree, so here they are.

Apparently CBF believes that the several hundred developers who are protesting the regulations don’t like to save money. The fact is that the construction industry, who 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. The local jurisdictions have made similar conclusions.

CBF’s op-ed 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.

CBF’s op-ed also suggests 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% 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% 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.................Maryland's New Regulations
Reduction of Impervious.........................20%...........................................50%
Green Roof Credit.................................100%...........................................40%
Credit for Water Quality..........................Yes.............................................No
Use of Channel Protection Volume.............Yes.............................................No
Alternatives for not complying with
Impervious Reduction.........................Yes, Upfront.........Happens at back end of process
Use of Structures for Water Quality........Yes, at reduced rates.................No, not permitted

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.

CBF also suggests 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.

CBF has also cited a 41% growth in impervious area and that these hard surfaces have created the stormwater pollution problem. Impervious surface data is often used as a proxy for predicting water quality impairments. The statistics quoted are commonly derived from satellite imagery and a regression analysis that is designed to account for tree cover -- a methodology that is still undergoing validation by its authors. More important, the data does not account for the presence of stormwater management devices that reduce the effect of impervious surfaces on stormwater runoff making the gross rate of impervious surface a misleading indicator of water quality degradation.

It is also important to point out that almost all of Maryland's designated growth areas are on schedule to reach build out during the next 15 to 20 years drawing into question whether extrapolating past growth in impervious surface is a useful way to accurately predict the amount of future impervious surface or water quality.

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

Lastly, we think the op-ed pieces are 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% 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), 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 should their proportionate responsibility. The development industry is ready.

Thomas M. Farasy is President of the Maryland State Builders Association.

Read a previous op-ed by Thomas M. Farasy
Are jobs really a priority?

Read an op-ed response by the Chesapeake Bay Foundation.
New stormwater rules won't increase costs
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