Even as an impeachment trial moves forward in the U.S. Senate, official Washington remains at work. Policymakers are issuing decisions and lawmakers are taking actions that will have ramifications for commercial real estate. Already in 2020, for example, the Senate has voted overwhelmingly to approve the U.S.-Mexico-Canada Agreement; NAIOP lobbied in favor of the USMCA, which is expected to boost economic growth and create American jobs.
Another example of ongoing activity is the Trump administration’s proposed reform of the 50-year-old National Environmental Policy Act. NEPA applies to any major infrastructure project that requires federal funding or permitting. That includes new roads and bridges, as well as expansion and repair of existing infrastructure. Providing a streamlined and transparent regulatory environment for infrastructure projects is a priority issue for NAIOP.
The Trump administration says an average of 170 projects each year require an Environmental Impact Statement under NEPA. A major problem is that getting an EIS involves vast amounts of paperwork and introduces long delays to the process. The administration’s Council on Economic Quality reports that the average EIS takes more than four years to complete and runs almost 700 pages.
Time is money, and these delays have real costs. In a September 2015 report, the think tank Common Good issued a report estimating that “a six-year delay in starting construction on public projects costs the nation over $3.7 trillion, including the costs of prolonged inefficiencies and unnecessary pollution. This is more than double the $1.7 trillion needed through the end of this decade to modernize America’s infrastructure.” The group proposes trimming the permitting process down to two years.
President Donald Trump also wants federal agencies to reduce costs, as well as the time necessary to complete an EIS. The administration began by issuing Executive Order 13807, signed by Trump in August 2017.
“For each major infrastructure project, agencies will work together to develop a single Permitting Timetable for the necessary environmental review and authorization decisions, prepare a single environmental impact statement (EIS), sign a single record of decision (ROD), and issue all necessary authorization decisions within 90 days of issuance of the ROD, subject to limited exceptions,” the administration wrote in that EO.
To follow up on that order, the Council on Economic Quality (CEQ) this month issued a proposed rule to demand that an EIS must be issued within two years “unless a senior agency official of the lead agency approves a longer period in writing and establishes a new time limit.” This would significantly speed up the approval process, and limit the paperwork required to no more than 300 pages for a complete EIS.
Another change that CEQ wants to implement with this rule is limiting the consideration of potential environmental effects of a project. The proposal says environmental effects shouldn’t be counted if they are: “remote in time, geographically remote, or the product of a lengthy causal chain.” That could serve to limit the importance of climate change concerns, for example, when it comes to permitting.
Mandy Gunasekara, a former administration EPA official, told Bloomberg that the reform will streamline permitting “so agencies are not drawn into a black hole of perpetual analysis, which has been the main source of stalled or canceled projects.” Gunasekara now runs a group that stumps for Trump’s energy policies.
For their part, many environmentalists oppose the proposed change. “That puts the company in the driver’s seat in choosing what will be reviewed and what type of information they will provide,” Christy Goldfuss told Bloomberg. She ran CEQ under President Barack Obama and now works at the Center for American Progress.
The changes wouldn’t go into effect right away. For example, Politico reports the changes “would not apply to existing projects in the pipeline and would not force the government to consider projects it deems to lack a ‘reasonable expectation’ of funding.” That means that even if the NEPA reform goes into effect this year, ongoing projects such as the Gateway Project near New York City would still need to comply with current regulations.