Stormwater sector pushes back as Washington targets permits: rules and affordable housing can coexist

On Friday, March 13, President Trump signed an executive order titled "Removing Regulatory Barriers to Affordable Home Construction" that focuses on addressing the affordable housing crisis. One element of the order is "reducing regulatory barriers to housing development," with stormwater permits listed first among the regulatory programs targeted for review. This comes on the heels of Senate passage of the 21st Century ROAD to Housing Act, one of the most significant pieces of housing legislation in a decade. Again, regulations tied to housing development were targeted.

It is noteworthy that both actions were preceded by the release of a report by the Manhattan Institute titled "The High Cost of Stormwater Regulations," posted online Feb. 5, 2026, and an opinion piece by the same author titled "Building a new house? This little-known rule could cost you thousands," published in The Washington Post on Feb. 4, 2026. Both pieces focus on stormwater regulations with the premise that "one federal regulation, about a seemingly mundane matter, is making nearly all housing and construction more expensive: rules governing stormwater."

Significant momentum has developed in Washington to address the affordable housing crisis. This is a good thing. However, in efforts to identify factors affecting housing construction, including land use ordinances, affordable housing and land development policies, and environmental protection rules, there has been little recognition of the costs of stormwater requirements relative to other construction and development costs, or of the benefits of stormwater programs. This suggests policymakers, in their efforts to reduce the cost of housing construction, may effectively throw the baby out with the bathwater. Modern stormwater management provides many benefits, including water quality improvements, reduced flood risk, increased water supply and urban greening.

Response by the Stormwater Sector

On Feb. 19, 2026, the National Municipal Stormwater Alliance penned a letter to the editor in response to the Washington Post op-ed. The letter notes that "the reality is people want safe, reliable housing that isn't going to jeopardize the health and safety of their family when severe weather hits," and that "many studies show that the economic and environmental benefits of sound stormwater management offset a portion, and sometimes all, of the costs for stormwater infrastructure for residential development."

The letter points out that upfront investment in stormwater management "actually saves communities money in deferred damage costs," citing an American Society of Civil Engineers journal article. The piece concludes that erosion due to poor or ineffective stormwater management leads to damage totaling billions of dollars each year to critical infrastructure at water crossings, including local streets, interstate highways, and sanitation and wastewater infrastructure. Sound stormwater management further protects housing, commercial and industrial structures from these same impacts.

The letter also highlights that "strained supply chains and inflationary cost increases to building materials are a much larger source of housing cost increases," backed by data from the National Association of Home Builders. An NAHB blog post from January 2025 states that "broad inflation in the global economy since 2022, particularly in building material prices, is largely to blame for the increased construction costs." Other building industry groups have raised similar concerns about tariffs and their downstream impacts. A South Texas homebuilding group recently met with the Trump administration amid concerns about labor shortages tied to immigration policy, stating that "South Texas will never be red again."

NMSA's letter argues that stormwater management offers a pay-me-now-or-pay-me-later value proposition: whether communities invest in resources to address the problem upfront, or suffer flooding, pollution, reduced property values and infrastructure failure later. Scaling back stormwater management in response to overstated concerns about compliance costs could force communities to make the wrong choices now and bear the consequences later.

Questioning the Value of Stormwater Management

While the data and arguments in the Manhattan Institute report and associated Washington Post op-ed are dubious at best and inaccurate at worst, the stormwater sector needs to recognize that it has failed to effectively articulate the value of investing in stormwater programs and infrastructure. That failure has left the sector vulnerable to campaigns that, however spurious, question the value of stormwater management. The sector must do better in demonstrating the multiple benefits of sound stormwater management and showing that permitting authorities and municipalities are striving to ensure stormwater requirements are cost-effective. To better understand how concerns about stormwater compliance costs are affecting housing development, NMSA is inviting MS4 managers and permitting authorities to share specific stories about the stormwater-housing nexus in their communities through an online portal.

The federal MS4 stormwater program was established in 1990, when stormwater regulation was virtually nonexistent. Since then, communities have completed multiple MS4 permit cycles, researchers have explored the nuances of stormwater pollution, technologists have developed new approaches to addressing stormwater quality and quantity challenges, and consultants have worked with stormwater program staff to meet community goals and requirements.

Through more than three decades of experience, the understanding of stormwater has grown significantly, yet the MS4 program remains fixed in a paradigm reflecting earlier understandings and practices. There are ways to gain cost efficiencies and embrace new approaches to managing stormwater quantity and quality that provide both cost savings and increased benefits. Market-based approaches, for instance, have the potential to unlock economic cost efficiencies, particularly for post-construction requirements, and more aggressive source control could reduce stormwater treatment while yielding greater water quality benefits. Aspects of MS4 permits could be reconsidered with an eye toward regulatory flexibility, allowing communities to prioritize efforts and investments for more holistic and cost-efficient outcomes. NMSA has identified nine specific priority areas for permit improvement and is seeking input from the stormwater sector.

Moving Forward

The current perceived tension between accelerating housing development and addressing stormwater problems should be seen as a galvanizing call to action for the stormwater sector. NMSA and American Rivers recently established the National Stormwater Leadership Coalition, formed to provide shared focus and direction for stormwater regulation and management at this critical time. The organization brings together municipal and NGO groups to develop an action-oriented national stormwater agenda, including identifying effective permit improvement opportunities and communicating the social, environmental and economic value of stormwater investments to policymakers and the public.

Practitioners, builders, NGOs, municipal groups, researchers, permitting authorities, consultants, legal professionals, policy groups and others must come together to clearly articulate the value of stormwater to the public, decision-makers and other key stakeholders. By developing and delivering a shared message, the sector can not only debunk arguments questioning the value of stormwater management but build capacity to explain proactively why effective stormwater regulations are both necessary and open to improvement, without throwing the baby out with the bathwater. Accurately assessing the relatively limited role of stormwater requirements in housing costs can also demonstrate that communities do not need to choose between strong stormwater management and affordable housing.