Document ID: EPA-HQ-OW-2002-0030-0012
Agency: epa
Document Type: Supporting & Related Material
Title: 
Posted Date: 2002-06-24T04:00Z

Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
EXECUTIVE
SUMMARY
ES.
1
INTRODUCTION
The
deposition
of
sediment
from
construction
site
runoff
has
contributed
to
the
loss
of
capacity
in
small
streams,
lakes,
and
reservoirs,
leading
to
the
necessity
for
mitigation
efforts
such
as
dredging
or
replacement.
In
response,
the
U.
S.
Environmental
Protection
Agency
(
EPA)
is
proposing
several
options
to
address
storm
water
discharges
from
construction
sites.
As
one
option,
EPA
would
establish
inspection
and
certification
requirements
that
would
be
incorporated
into
the
storm
water
permits
issued
by
EPA
and
States,
with
other
permit
requirements
based
on
the
best
professional
judgement
of
the
permit
authority.
As
another
option,
EPA
would
establish
technology­
based
effluent
limitation
guidelines
and
standards
(
ELGs)
for
storm
water
discharges
from
construction
sites
required
to
obtain
National
Pollutant
Discharge
Elimination
System
(
NPDES)
permits.
The
final
option
would
involve
no
incremental
regulation.
EPA
would
allow
technology­
based
permit
requirements
to
continue
to
be
established
based
upon
the
best
professional
judgment
of
the
permit
authority.

This
Economic
Analysis
(
EA)
summarizes
EPA
 
s
analysis
of
the
estimated
compliance
costs
and
the
economic
impacts
that
may
be
incurred
by
regulated
entities
within
the
construction
and
development
(
C&
D)
industry
as
a
result
of
the
proposed
regulations.
The
EA
describes
the
proposed
regulatory
options
considered
by
EPA.
Financial
impacts
to
establishments
in
the
C&
D
industry,
potential
impacts
on
consumers
of
C&
D
industry
output,
and
market
and
other
secondary
impacts
such
as
industry
employment
are
also
covered
here.
This
EA
also
responds
to
requirements
for
small
business
analyses
under
the
Regulatory
Flexibility
Act
(
RFA)
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
(
SBREFA)
and
for
cost­
benefit
analyses
under
Executive
Order
12866
and
the
Unfunded
Mandates
Reform
Act
(
UMRA)
.

ES­
1
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
2
INDUSTRY
PROFILE
ES.
2.1
Data
Sources
EPA
relied
on
existing
data
sources,
including
academic
literature,
industry
trade
associations,
and
government
data
such
as
that
provided
by
the
U.
S.
Census
Bureau.
Major
data
sources
are
discussed
in
more
detail
where
they
are
used
to
support
sections
of
this
analysis.

Of
primary
importance
in
the
early
development
of
this
EA
was
the
1997
Census
of
Construction,

conducted
by
the
U.
S.
Census
Bureau.
The
Census
provided
information
on
the
industry
sectors
potentially
affected
by
the
proposed
rule,
as
well
as
characteristics
of
each
sector
such
as
employment
and
revenue
levels.
EPA
used
other
reports
from
the
Census
Bureau,
including:

 
Report
C25
 
Characteristics
of
New
Housing
 
Report
C40
 
Building
Permits
 
Report
C20
 
Housing
Starts
 
Report
C30
 
Value
Put
in
Place
These
reports
were
used
to
develop
and
support
the
various
economic
models
used
in
this
analysis.

Other
data
sources
used
to
create
a
profile
of
the
C&
D
industry
included
focus
group
sessions
with
the
National
Association
of
Home
Builders
(
NAHB)
and
various
NAHB
publications,
the
Economic
Analysis
for
the
Final
Phase
II
NPDES
Storm
Water
Regulations,
and
a
report
on
the
remodeling
industry
by
the
Joint
Center
for
Housing
Studies
at
Harvard
University,
in
addition
to
a
variety
of
academic
literature.

ES­
2
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
2.2
Industry
Description
The
construction
industry
plays
an
integral
role
in
the
nation
 
s
economy,
contributing
approximately
five
percent
of
the
Gross
Domestic
Product.
Establishments
in
this
industry
are
involved
in
a
wide
variety
of
activities,
from
land
development
and
subdivision
to
homebuilding,
construction
of
nonresidential
buildings
and
other
structures,
heavy
construction
work
(
including
roadways
and
bridges)
,

and
a
myriad
of
special
trades
such
as
plumbing,
roofing,
electrical,
excavation,
and
demolition
work.

C&
D
activity
affecting
water
quality
typically
involves
site
selection
and
planning,
and
land­
disturbing
tasks
during
construction
such
as
clearing,
excavating
and
grading.
Disturbed
soil,
if
not
managed
properly,
can
be
easily
washed
off­
site
during
storm
events.
Storm
water
discharges
generated
during
construction
activities
can
cause
an
array
of
physical,
chemical
and
biological
impacts.

Several
characteristics
of
the
construction
industry
affect
the
structure
of
this
economic
analysis:

 
Individuals
(
e.
g.
,
homebuyers)
are
often
the
direct
customers
of
the
construction
industry.
With
individuals
as
the
direct
consumer
it
is
necessary
to
address
issues
such
as
cost
pass
through
and
the
impacts
of
regulations
on
housing
affordability.

 
The
construction
industry
is
dominated
by
small
businesses.
As
a
result,
EPA
carefully
considered
the
impacts
on
small
businesses
in
accordance
with
the
Regulatory
Flexibility
Act
(
RFA)
,
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
(
SBREFA)
.

 
There
are
complex
and
varying
relationships
between
developers
and
builders,
resulting
in
a
variety
of
different
business
models.
Developers
may
undertake
all
improvement
and
sell
completed
lots
directly
to
builders,
act
as
builders
themselves
and
remain
onsite
to
build
out
the
development,
or
sell
some
lots
and
retain
others
to
build
on.

 
Construction
activities
are
highly
localized.
This
suggests
that
a
regional
approach
to
analysis
may
be
helpful
in
accounting
for
varying
market
conditions.

 
The
standard
industry
definitions
include
a
large
number
of
establishments
primarily
engaged
in
remodeling
activities.
Such
establishments
are
less
likely
to
be
involved
in
land
disturbing
activities.

For
the
purposes
of
this
economic
analysis,
the
 
C&
D
industries
 
are
broadly
defined
to
include
those
establishments
within
the
construction
sector
(
NAICS
23)
that
may
be
involved
in
activities
that
ES­
3
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
disturb
the
ground
at
construction
sites.
This
includes
site
clearing
or
site
preparation
activities
such
as
tree
removal,
excavation,
blasting,
scraping,
grading,
etc.
EPA
believes
that
many
establishments
in
NAICS
233
(
Building,
developing,
and
general
contracting)
and
NAICS
234
(
Heavy
construction)
are
likely
to
engage
in
such
activities
on
a
regular
basis.
Establishments
within
selected
5­
digit
industries
that
are
part
of
NAICS
235
(
Special
trade
contractors)
may
also
engage
in
land­
disturbing
activities.
These
may
include
NAICS
23593
(
Excavation
contractors)
and
23594
(
Wrecking
and
demolition
contractors)
.

However,
as
discussed
in
Section
VI.
A
in
the
preamble
of
the
proposed
rule,
Special
trade
contractors
are
typically
subcontractors
and
not
identified
as
NPDES
permittees.
Table
ES­
1
identifies
the
industry
sectors
that
may
be
covered
by
the
proposed
regulations.

ES­
4
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
1.
Industry
Definitions
for
Construction
and
Development
Industry
Profile
NAICS
Code
Industry
Relevant
SIC
Codes
233
Building,
developing,
and
general
contracting
2331
Land
subdivision
and
development
23311
Land
subdivision
and
development
6552
Land
subdividers
and
developers,
except
cemeteries
2332
Residential
building
construction
23321
Single­
family
housing
construction
1521
General
contractors
 
single­
family
houses
1531
Operative
builders
(
partial)
8741
Management
services
(
partial)

23322
Multifamily
housing
construction
1522
General
contractors
 
residential
buildings
other
than
single­
family
(
partial)
1531
Operative
builders
(
partial)
8741
Management
services
(
partial)

2333
Nonresidential
building
construction
23331
Manufacturing
and
industrial
building
construction
1531
Operative
builders
(
partial)
1541
General
contractors
 
industrial
buildings
and
warehouses
(
partial)
8741
Management
services
(
partial)

23332
Commercial
and
institutional
building
construction
1522
General
contractors
 
residential
buildings,
other
than
single­
family
(
partial)
1531
Operative
builders
(
partial)
1541
General
contractors
 
industrial
buildings
and
warehouses
(
partial)
1542
General
contractors
 
nonresidential
buildings
except
industrial
buildings
and
warehouses
8741
Management
services
(
partial)
234
Heavy
Construction
2341
Highway,
street,
bridge,
and
tunnel
construction
23411
Highway
and
street
construction
1611
Highway
and
street
construction
contractors,
except
elevated
highways
8741
Management
services
(
partial)

23412
Bridge
and
tunnel
construction
1622
Bridge,
tunnel,
and
elevated
highway
construction
2349
Other
heavy
construction
23491
Water,
sewer,
and
pipeline
construction
1623
Water,
sewer,
pipeline,
and
communications
and
power
line
construction
(
partial)
8741
Management
services
(
partial)

23492
Power
and
communication
transmission
line
construction
1623
Water,
sewer,
pipeline,
and
communications
and
power
line
construction
(
partial)
8741
Management
services
(
partial)

23493
Industrial
nonbuilding
structure
construction
1629
Heavy
construction,
n.
e.
c.
(
partial)
8741
Management
services
(
partial)

23499
All
other
heavy
construction
1629
Heavy
construction,
n.
e.
c.
(
partial)
7353
Heavy
construction
equipment
rental
and
leasing
(
partial)
8741
Management
services
(
partial)
235
Special
trade
contractors
23593
Excavation
contractors
1794
Excavation
work
special
trade
contractors
23594
Wrecking
and
demolition
contractors
1795
Wrecking
and
demolition
work
special
trade
contractors
Source:
U.
S.
Census
Bureau
(
2000)
.

ES­
5
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
2.2.1
Number
of
Establishments
In
1997,
there
were
a
total
of
261,617
establishments
with
payroll
in
the
C&
D
industries.
This
represented
39.8
percent
of
all
establishments
in
the
construction
sector
(
NAICS
23)
and
4.1
percent
of
all
U.
S.
business
establishments.
Between
1992
and
1997,
the
number
of
establishments
with
payroll
in
the
C&
D
industries
increased
from
235,789
to
261,617,
an
increase
of
11.0
percent
(
see
Table
ES­
2)
.

This
overall
modest
increase
masks
some
significant
offsetting
changes
in
establishment
counts
within
individual
industries,
as
defined
under
NAICS,
i.
e.
,
:

 
The
number
of
establishments
in
the
land
development
sector
(
NAICS
2331)
decreased
by
46.6
percent;

 
There
was
a
13.5
percent
increase
in
the
number
of
establishments
in
residential
and
nonresidential
building
construction
(
NAICS
233,
except
2331)
;

 
The
number
of
establishments
in
heavy
construction
increased
by
14.5
percent;

 
There
was
a
33.0
percent
increase
in
the
number
of
special
trades
contractor
establishments
(
NAICS
235)
,
including
a
31.2
percent
increase
among
excavation
contractors
and
a
59.6
percent
increase
among
demolition
contractors.

Table
ES­
2.
Number
of
Establishments
in
Construction
and
Development
Industries,
1997
vs
1992
NAICS
Industry
Number
of
Establishments
1992
1997
Pct.
Change
1992­
1997
233,
exc.
2331
Building,
developing,
and
general
contracting,
except
land
development
and
subdevelopment
168,407
191,101
13.5%

2331
Land
development
and
subdevelopment
15,338
8,185
­
46.6%

234
Heavy
construction
37,180
42,557
14.5%

235
a
Special
trade
contracting
14,864
19,771
33.0%

Subtotal
235,789
261,617
11.0%

a
Includes
NAICS
23593
(
Excavation
contractors)
and
23594
(
Wrecking
and
demolition
contractors)
only.
Figures
may
not
add
to
totals
due
to
rounding.
Source:
U.
S.
Census
Bureau
(
2000)
.

ES­
6
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
2.2.2
Employment
In
1997,
employment
in
the
C&
D
industries
totaled
nearly
2.4
million
workers.
This
represented
41.6
percent
of
all
construction
sector
employment
(
NAICS
23)
and
2.3
percent
of
all
employment
in
U.
S.

business
establishments.
Table
ES­
3
shows
a
distribution
of
employment
by
NAICS
industry.
NAICS
2331
(
Land
subdivision
and
land
development)
accounts
for
41,827
employees
(
1.8
percent
of
the
total)
,

the
rest
of
NAICS
233
(
Building,
developing,
and
general
contracting)
accounts
for
1.3
million
employees,

or
55.2
percent
of
the
total.
A
total
of
880,400
or
37.3
percent
of
the
total
are
employed
in
NAICS
234
(
Heavy
construction)
,
and
NAICS
23593
and
23594
(
Excavation
contractors
and
Wrecking
and
demolition
contractors)
employ
135,057
(
5.7
percent
of
the
total)
.
1
Table
ES­
3.
Number
of
Employees
in
the
Construction
and
Development
Industries,
Establishments
With
Payroll,
1997
NAICS
Industry
Number
of
Employees
Percent
of
Total
233,
except
23311
Building,
developing,
and
general
contracting,
except
land
subdivision
and
land
development
1,301,126
55.2%

23311
Land
subdivision
and
land
development
41,827
1.8%

234
Heavy
construction
880,400
37.3%

235
a
Special
trade
contractors
135,057
5.7%

TOTALS
2,358,410
100.0%

a
Includes
NAICS
23593
(
Excavation
contractors)
and
23594
(
Wrecking
and
demolition
contractors)
only.
Source:
U.
S.
Census
Bureau
(
2000)
.

Construction
is
a
seasonal
activity
in
many
parts
of
the
country,
and
employment
data
from
the
industry
bear
this
out.
In
1997
employment
of
construction
workers
was
lowest
in
March
at
1.59
million
and
highest
in
August
at
1.83
million.

1
A
comparison
to
1992
employment
levels
(
comparable
to
that
shown
in
Table
ES­
2)
is
not
easily
made
because
of
the
change
from
SIC
to
NAICS
basis
between
the
1992
and
1997
Census
periods.

ES­
7
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
2.2.3
Revenues
Overall,
the
value
of
construction
work
completed
in
the
C&
D
industries
was
$
525.3
billion
in
1997.
This
represents
an
increase
of
58.8
percent
over
the
$
330.6
billion
in
(
nominal)
value
recorded
in
1992.
NAICS
233
(
Building
and
developing)
accounted
for
$
368.0
billion
or
70.0
percent
of
the
total
overall
value
in
1997.
Value
of
work
for
heavy
construction
contractors
(
NAICS
234)
was
$
127.8
billion
or
24.4
percent
of
the
total,
while
special
trade
contractors
(
NAICS
23593
and
23594)
completed
work
valued
at
$
15.9
billion,
representing
3.0
percent
of
total
revenues.
The
average
value
of
construction
work
done
per
establishment
ranges
from
$
0.8
million
per
year
for
special
trades
to
$
3.0
million
per
year
for
heavy
construction.

Table
ES­
4.
Value
of
Construction
Work
(
Thousands
of
1997
Dollars)

NAICS
Description
Value
of
Construction
Work
a
(
$
1,000)

Total
Per
Establishment
233,
except
2331
Building,
developing,
and
general
contracting,
except
land
development
and
subdivision
$
368,006,098
$
1,926
2331
Land
subdivision
and
land
development
$
13,635,521
$
1,666
234
Heavy
construction
$
127,841,600
$
3,004
235
b
Special
trade
contractors
$
15,910,770
$
805
TOTAL
$
525,393,989
$
2,008
a
Value
of
construction
work
includes
all
value
of
construction
work
done
during
1997
for
construction
work
performed
by
general
contractors
and
special
trade
contractors.
Included
is
new
construction,
additions
and
alterations
or
reconstruction,
and
maintenance
and
repair
construction
work.
Also
included
is
the
value
of
any
construction
work
done
by
reporting
establishments
for
themselves.

b
Covers
establishments
in
NAICS
23593
(
Excavation
contractors)
and
23594
(
Wrecking
and
demolition
contractors)
only.
Source:
U.
S.
Census
Bureau
(
2000)
.

ES.
2.2.4
Number
of
Potentially
Regulated
Businesses
EPA
took
several
steps
to
define
the
number
of
C&
D
establishments
that
may
be
affected
by
the
proposed
regulations.
The
analysis
began
with
all
C&
D
establishments
as
defined
in
Table
ES­
1,
using
ES­
8
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
data
from
the
1997
Census
of
Construction.
EPA
next
estimated
the
number
of
C&
D
establishments
primarily
engaged
in
remodeling
work,
using
data
from
the
National
Association
of
Home
Builders
(
NAHB)
and
the
Joint
Center
for
Housing
Studies
at
Harvard
University
(
Joint
Center)
.
These
were
excluded
because
they
were
judged
unlikely
to
engage
in
land
disturbing
activities.
The
final
step
was
to
estimate
the
number
of
C&
D
establishments
who
are
unlikely
to
disturb
more
than
one
acre
of
land.
This
was
done
to
exclude
establishments
that
fall
below
the
regulatory
coverage
of
the
proposed
rule.
2
A
number
of
establishments
classified
in
the
C&
D
industries
are
primarily
engaged
in
remodeling
activities.
These
establishments
are
not
expected
to
be
affected
under
the
proposed
rule
because
they
are
unlikely
to
engage
in
any
land­
disturbing
activities.
The
Joint
Center
(
2001)
recently
published
a
report
focused
solely
on
the
remodeling
industry.
This
report
classified
establishments
that
derive
at
least
half
of
their
revenues
from
remodeling
activities
as
remodelers.
When
defined
in
this
manner,
the
study
found
that
62,400
establishments
classified
as
general
contractors/
builders
in
1997
were
actually
remodelers.
The
study
goes
further
to
identify
establishments
classified
in
various
special
trades
(
e.
g.
,

carpentry,
plumbing)
that
are
primarily
engaged
in
remodeling,
but
provides
no
estimates
for
the
special
trades
industries
that
form
part
of
the
C&
D
industries
as
defined
for
this
proposed
rule
(
i.
e.
,
in
NAICS
23593
Excavation
contractors
and
23594
Wrecking
and
demolition
contractors)
.
3
The
report
does
not
address
remodeling
activities
conducted
by
establishments
in
NAICS
234
(
Heavy
construction)
,
however,

EPA
does
not
believe
that
many
establishments
in
this
sector
are
principally
engaged
in
remodeling
activities.

EPA
believes
that
builders
who
construct
only
a
few
houses
per
year
are
also
unlikely
to
be
affected
by
the
proposed
rule,
because
such
builders
are
unlikely
to
build
on
sites
over
one
acre
in
size.
A
special
report
on
the
homebuilding
industry,
published
by
the
Census
Bureau
(
Rappaport
and
Cole,
2000)
,

estimates
the
number
of
establishments
according
to
the
number
of
housing
units
started
each
year.
In
2
An
additional
step
used
in
the
analysis
of
Option
2
was
to
estimate
the
number
of
C&
D
establishments
that
disturb
only
5
acres
of
land
or
more.
Option
2
would
not
apply
to
sites
below
5
acres
in
size.

3
The
Joint
Center
study
does
provide
an
estimate
for
the
number
of
remodelers
classified
in
 
miscellaneous
special
trades
 
(
(
NAICS
2359)
,
which
includes
NAICS
23593
and
23594,
but
several
other
industries
as
well.
The
number
of
remodelers
classified
primarily
in
NAICS
23593
and
23594
may
not
be
large,
however,
since
the
total
number
in
NAICS
2359
is
only
6,600.

ES­
9
­
­

­
­

­
­
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
1997,
the
number
of
establishments
that
built
between
one
and
four
houses
(
the
smallest
builder
size
category)
was
50,661.

From
Table
ES­
2,
EPA
estimates
that
the
total
number
of
establishments
in
the
C&
D
industry
is
261,617.
Subtracting
the
62,400
remodeling
establishments
and
the
50,661
establishments
that
start
between
one
and
four
houses
per
year
leaves
148,556
establishments
potentially
affected
by
the
proposed
rule.
Table
ES­
5,
below,
shows
the
number
of
establishments
in
the
C&
D
industry,
adjusted
for
the
number
of
remodelers
and
small­
scale
builders.
4
Table
ES­
5.
Number
of
Establishments
Potentially
Affected
by
the
Proposed
Rule
NAICS
Industry
Establishments
With
Payroll
Number
Percent
of
Total
2331
Land
development
and
subdivision
8,185
3.1%

23321
Single­
family
residential
building
construction
138,849
53.1%

23322
Multi­
family
residential
building
construction
7,543
2.9%

2333
Nonresidential
construction
44,710
17.1%

234
Heavy
construction
42,557
16.3%

235
a
Special
trade
contracting
19,771
7.6%

SUBTOTAL
261,617
100.0%

Minus
Remodeling
Establishments
62,400
Minus
Establishments
Starting
1
­
4
Houses
per
Year
50,661
Number
of
Potentially
Affected
Establishments
148,556
a
Includes
NAICS
23593
(
Excavation
contractors)
and
23594
(
Wrecking
and
demolition
contractors)
only.
Figures
may
not
add
to
totals
due
to
rounding.
See
also
the
footnote
below.
Source:
U.
S.
Census
Bureau
(
2000)
;
Rappaport
and
Cole
(
2000)
;
Joint
Center
(
2001)
.

4
EPA
believes,
in
addition,
that
a
majority
of
establishments
in
NAICS
23593
(
Excavation
contractors)
and
23594
(
Wrecking
and
demolition
contractors)
will
not
be
affected
by
the
proposed
rule
because
they
act
as
subcontractors
to
the
actual
NPDES
storm
water
permittee,
who
will
most
often
be
a
developer
or
general
contractor.
EPA
has
included
these
establishments
in
the
universe
of
potentially
affected
establishments
shown
in
Table
ES­
5,
but
has
excluded
them
from
the
economic
impact
analysis
summarized
below.
For
further
details,
see
Section
2.3.4.

ES­
10
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
2.2.5
Small
Entities
Small
entities
are
defined
by
the
Small
Business
Administration
(
SBA)
according
to
size
standards
based
on
either
number
of
employees
or
annual
revenue
(
13
CFR
121)
.
For
all
of
the
C&
D
industries,
the
size
standards
are
based
on
annual
revenues.
The
SBA
revenue
thresholds
for
the
C&
D
industry
range
from
$
5.0
million
for
NAICS
233110
(
Land
subdivision
and
land
development)
to
$
27.5
million
for
the
majority
of
NAICS
233
(
Building,
developing,
and
general
contracting)
and
NAICS
234
(
Heavy
construction)
.
5
As
shown
in
Table
ES­
6,
95,753
potentially
affected
C&
D
businesses,
representing
98.6
percent
of
all
potentially
affected
businesses
in
the
C&
D
industry,
fall
below
the
SBA­
defined
revenue
thresholds
for
this
industry
and
therefore
may
be
qualified
as
small
businesses.

Note
that
for
this
analysis,
due
to
data
limitations
for
the
land
development
industry
(
NAICS
23311)
EPA
accounted
for
these
establishments
by
assigning
them
to
the
four
building
construction
industries
(
single­
family
residential,
multifamily
residential,
commercial
6
,
and
industrial)
based
on
the
share
of
affected
establishments
represented
by
each
sector.
7
EPA
likewise
lacked
financial
data
for
establishments
in
the
special
trades
industries
(
NAICS
235)
but
decided
to
exclude
these
establishments
from
the
small
entity
analysis
rather
than
have
them
represented
by
model
firms
that
are
dissimilar
in
their
characteristics.
In
general,
EPA
believes
establishments
in
NAICS
235
will
not
be
affected
by
the
proposed
rule.
Chapter
Six
of
this
report
provide
further
detail
on
EPA
 
s
approach
to
the
small
entity
analysis.

5
For
those
industries
with
a
$
27.5
million
SBA
cutoff,
the
table
shows
the
number
of
firms
and
establishments
with
revenues
below
$
25.0
million
(
the
next
closest
SBA
data
break
point)
.
For
industries
with
a
$
11.5
million
SBA
cutoff,
figures
shown
are
for
firms
and
establishments
with
revenues
below
$
7.5
million.

6
See
section
ES.
4.1
for
a
description
of
the
commercial
construction
industry.

7
Implicitly,
this
means
that
establishments
in
the
land
development
industry
are
represented
by
model
facilities
in
each
of
the
four
building
construction
industries.
Prior
to
doing
this,
EPA
compared
industry
characteristics
such
as
average
employment,
revenues,
and
assets
across
industries
and
found
them
to
be
similar.

ES­
11
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
6.
Estimated
Number
of
Small
Businesses
Potentially
Affected
by
the
Proposed
Rule.

NAICS
Potentially
Affected
Establishment
s
Potentially
Affected
Businesses
Potentially
Affected
Small
Businesses
Small
Businesses
as
a
Percent
of
Total
for
Individual
Industry
Number
Percent
of
total
233210:
Single­
family
housing
construction
34,070
34,041
34,004
35.5%
99.9%

233220:
Multifamily
housing
construction
4,603
4,597
4,571
4.8%
99.4%

233310:
Manufacturing
and
industrial
building
construction
7,742
7,719
7,498
7.8%
97.1%

233320:
Commercial
and
institutional
building
construction
39,810
39,587
39,013
40.7%
98.6%

23411
Heavy
Construction
11,270
11,141
10,667
11.1%
95.7%

Total
97,495
97,085
95,753
100.0%
98.6%

Source:
EPA
estimates
(
see
Chapter
Six)
.

ES.
2.3
Industry
Dynamics
For
purposes
of
the
economic
analysis,
EPA
has
selected
1997
as
the
baseline
year.
In
part
this
reflects
the
availability
of
data
from
the
1997
Census
of
Construction,
but
in
addition
EPA
believes
1997
to
be
reasonably
representative
year
for
the
affected
industries.
Before
reaching
this
conclusion,
EPA
examined
historical
activity
data
for
the
construction
industry,
reviewed
analyses
of
recent
trends,
and
looked
at
projections
for
the
future.
As
a
result
of
this
review,
EPA
concluded
the
following:

 
Historically,
construction
activity
has
been
highly
cyclical.
Data
from
1959
through
2001
for
new
housing
units
authorized
by
building
permit
show
an
overall
growth
trend
that
is
punctuated
by
cyclical
swings
(
see
Figure
ES­
1)
.
These
reach
highs
in
1972,
1978,
and
1986
and
lows
in
1974,
1982,
and
1991.

 
Since
1991,
the
industry
has
been
on
a
fairly
continuous
growth
trend.
Single­
family
housing,
for
example,
grew
from
an
annual
level
of
0.7
million
new
units
in
1991
to
1.2
million
new
units
in
1999,
which
represents
an
average
annual
growth
rate
of
8.2
percent.

ES­
12
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
During
this
same
period,
real
GDP
grew
by
an
average
of
4.1
percent
per
year
(
BEA,
2002)
.

 
Structural
changes
in
the
market
have
made
construction
less
cyclical
than
before.
In
a
recent
analysis,
the
NAHB
identifies
several
factors
that
have
contributed
to
reducing
the
cyclicality
of
housing
market
activity.
These
include
the
easing
of
rules
on
credit
availability,
the
subsequent
development
of
adjustable­
rate
mortgage
instruments,
and
the
maturation
of
the
secondary
market
for
mortgage­
backed
securities
(
NAHB,
no
date)
.

 
An
NAHB
report
called
The
Next
Decade
for
Housing
predicts
that
over
the
2001­
2010
period
the
nation
will
build
an
average
of
1.82
million
new
homes
per
year,
up
from
an
average
of
1.66
million
per
year
over
the
1991­
2000
(
see
Table
ES­
7)
.

 
A
surprising
feature
of
the
most
recent
economic
slowdown
is
that
it
has
had
almost
a
negligible
effect
on
construction
activity,
and
new
home
construction
in
particular.
As
NAHB
 
s
chief
economist
wrote
in
early
2002,
 
Believe
it
or
not,
2001
turned
out
to
be
a
record
year
for
sales
of
both
new
and
existing
homes,
despite
three
quarters
of
economic
recession
and
the
shock
of
the
terrorist
attacks.
 
(
(
Seiders,
2002)
.

1959
1964
1969
1974
1979
1984
1989
1994
1999
Year
0
500
1,000
1,500
Thousands
of
units
1
unit
2­
4
units
5
units
or
more
Source:
http:
/
/
www.
census.
gov/
pub/
const/
bpann.
pdf
New
Privately
Owned
Housing
Units
Authorized
by
Building
Permits
in
Permit­
Issuing
Places
Annual
Data
Figure
ES­
1.
Historical
data
on
housing
construction.

ES­
13
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
7.
Housing
Supply
and
Demand
­
Historical
Data
and
Projections
for
2001­
2010
(
all
data
are
in
thousands
and
represent
annual
changes)

1971­
1980
1981­
1990
1991­
2000
2001­
2010
proj
.

Change
in
households
1,578
1,281
1,137
1,255
Change
in
vacancies
151
219
184
223
Net
removals
333
214
343
344
Total
Demand
2,062
1,714
1,664
1,822
New
single­
family
housing
units
1,110
979
1,108
1,203
New
multifamily
housing
units
602
491
257
343
Mobile
homes
349
244
298
276
Total
Supply
2,062
1,714
1,664
1,822
Source:
NAHB
(
no
date)
;
based
on
Bureau
of
the
Census
data
and
NAHB
forecasts.

Based
on
this
review,
EPA
concluded
that
data
from
the
year
1997
provide
a
reasonable
basis
for
characterizing
the
industries
likely
to
be
affected
by
the
proposed
ELG.
In
particular,
EPA
concluded
that
there
is
nothing
to
suggest
that
1997
represents
a
particularly
robust
year,
or
that
during
the
coming
years
in
which
the
industry
will
have
to
adapt
to
the
requirements
of
the
ELG
it
will
be
in
a
relatively
weak
position,
compared
to
the
profile
presented
here.

ES.
3
REGULATORY
OPTIONS
ES.
3.1
Current
Regulatory
Status
of
the
C&
D
Industry
The
Construction
General
Permit
(
CGP)
,
published
in
1992
and
revised
in
1998,
directs
those
seeking
an
NPDES
permit
from
EPA
to
prepare
a
storm
water
pollution
prevention
plan
(
SWPPP)
for
certain
construction
activities.
The
CGP
also
calls
for
installation
of
temporary
sediment
basins
for
construction
sites
with
disturbed
area
of
10
acres
or
more.
The
permit
lists
a
variety
of
options
and
goals
for
other
erosion
and
sediment
controls
(
ESCs)
,
but
none
are
required.
A
description
of
ESCs
is
to
be
contained
in
the
SWPPP.
Options
and
goals
for
post­
construction
storm
water
best
management
practices
(
BMPs)
are
also
contained
in
the
CGP,
but
none
are
required.
As
with
ESCs,
selected
BMPs
ES­
14
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
are
to
be
described
in
the
SWPPP.
Further
discussion
of
current
storm
water
regulations
affecting
construction
activities
can
be
found
in
Chapter
One.

The
C&
D
industry
ELG
would
complement
the
existing
NPDES
permitting
program
by
setting
minimum
technology­
based
national
standards
for
active
construction
ESCs
and
requiring
inspection
and
certification
of
ESC
practices.
The
proposed
regulatory
options
considered
by
EPA
are
described
below.

ES.
3.2
Summary
of
Proposed
Regulatory
Options
EPA
is
proposing
BAT/
BPT/
BCT/
NSPS
guidelines
and
standards
for
active
construction
phase
erosion
and
sediment
control
under
the
proposed
ELG.
The
specific
options
under
consideration
are
summarized
in
Table
ES­
8
and
described
in
detail
in
Chapter
Three
of
this
EA.
All
three
options
are
co
­

proposed,
none
is
identified
as
 
preferred.
 
Table
ES­
8.
Summary
of
Regulatory
Options
Proposed
by
EPA
Option
Description
Regulatory
Mechanism
Applicability
Option
1
Inspection
and
Certification
of
Construction
Site
Erosion
and
Sediment
Controls
Amendment
to
NPDES
storm
water
permitting
regulations
Construction
sites
disturbing
1
acre
or
more
Option
2
 
Codification
 
of
the
Construction
General
Permit
(
CGP)
plus
Inspection
and
Certification
Requirements
Effluent
limitation
guidelines
Construction
sites
disturbing
5
acres
or
more
Option
3
No
Additional
Regulation
(
Baseline)
N/
A
All
sites
EPA
has
defined
the
baseline
for
the
proposed
rule
as
full
compliance
with
the
construction
requirements
of
the
final
Phase
I
and
Phase
II
NPDES
storm
water
regulations.
EPA
also
conducted
a
supplemental
analysis
that
takes
into
account
the
fact
that
some
states
have
not
fully
implemented
the
construction
permitting
requirements
of
the
final
Phase
II
NPDES
storm
water
rule.
The
deadline
for
compliance
with
these
requirements
is
March
10,
2003.
The
alternative
baseline
scenario
considers
the
ES­
15
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
combined
impact
of
the
Phase
II
NPDES
storm
water
rule
and
ELG
regulations.
Since
EPA
does
not
have
current
information
on
the
extent
of
implementation
of
the
construction
permitting
requirements
of
the
Phase
II
NPDES
storm
water
rule,
the
supplemental
analysis
assumes
that
all
affected
activities
incur
the
combined
cost
of
the
Phase
II
NPDES
storm
water
rule
and
ELG
requirements.

ES.
4
ECONOMIC
IMPACT
ANALYSIS
The
economic
impact
analysis
models
the
economic
impacts
of
the
proposed
rule
from
several
different
perspectives.
EPA
has
developed
a
series
of
model
projects
to
analyze
the
economic
achievability
of
regulatory
alternatives
at
the
project
level.
These
models
are
based
on
representative
project
characteristics
for
single­
family
residential,
multifamily
residential,
commercial,
and
industrial
projects
of
various
sizes.
For
example,
the
single­
family
residential
model
project
reflects
national
averages
for
typical
lot
size,
number
of
housing
units
built,
size
of
housing
units,
etc.
as
well
as
project
financial
characteristics
such
as
lot
prices,
development
costs,
permitting
costs,
construction
costs,
and
project
financing
alternatives.
A
second
type
of
modeling
simulates
the
impacts
of
the
regulatory
options
at
the
establishment
and/
or
firm
level
(
most
construction
firms
operate
only
a
single
establishment)
.

These
models
build
on
the
project­
level
models
to
account
for
the
level
of
activity
(
number
and
mix
of
projects)
a
typical
firm
is
involved
with
in
a
typical
year.
EPA
assesses
the
potential
for
business
closure
and
employment
losses
using
the
firm­
level
model
analysis.
The
third
level
of
analysis
focuses
on
the
impacts
of
the
regulatory
options
on
the
national
markets
affected
by
regulations
on
construction
and
development
activities.
The
primary
focus
of
this
analysis
is
on
the
residential
sector
in
terms
of
changes
in
house
sales
prices
due
to
the
proposed
regulations,
but
EPA
has
also
analyzed
the
effects
of
the
regulations
on
the
commercial
and
industrial
sectors.
These
models
are
described
in
detail
in
Chapter
Four
of
this
report.
In
that
chapter
EPA
provides
a
detailed
discussion
of
the
data
sources
and
methodologies
used
for
each
type
of
model
(
project­
,
firm­
,
and
market­
level)
.
Chapter
Five
contains
the
results
of
these
analyses.
8
8
The
model
projects
were
developed
with
input
from
industry
representatives
and
from
literature
sources
to
ensure
they
are
representative
of
projects
undertaken
by
firms
likely
to
be
affected
by
the
proposed
ELG.
The
model
firms
are
developed
using
mean
or
median
values
for
firm
characteristics
as
reported
in
the
1997
Census
of
Construction.
See
Chapter
Four
for
more
extensive
discussion
of
the
modeling
methodologies.

ES­
16
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
4.1
Impacts
on
Model
Construction
Projects
Section
ES.
3
described
the
approach
used
by
EPA
to
develop
model
projects
that
assess
the
impact
of
the
various
regulatory
options
on
the
financial
performance
of
the
project
and
to
determine
the
incremental
project­
level
costs
that
would
result.
EPA
developed
models
for
the
following
four
project
types:

 
Single­
family
residential
 
Multifamily
residential
 
Commercial
9
 
Industrial
EPA
prepared
multiple
versions
of
each
project
type
to
reflect
a
range
of
project
sizes
 
1,
3,
7.5,

25,
70,
and
200
acres.
EPA
also
analyzed
each
model
project
under
two
cost
pass
through
(
CPT)

scenarios.
In
the
100
percent
CPT
scenario
the
developer/
builder
passes
on
100
percent
of
the
regulatory
cost
to
the
buyer
or
consumer.
The
impacts
are
felt
by
consumers
in
the
form
of
changes
in
the
sales
prices
of
the
building
or
housing
unit.
In
the
zero
CPT
scenario
the
developer/
builder
absorbs
all
of
the
regulatory
costs
and
the
impact
is
reflected
in
a
change
in
pre­
tax
profits.
The
baseline
project
sales
price
is
calculated
in
the
models
and
varies
according
to
project
type
and
size.
The
baseline
pre­
tax
profit
is
set
at
10
percent
of
building
sales
price
based
on
input
from
industry.
Tables
ES­
9a
and
ES­
9b
present
the
weighted
average
changes
in
price
to
consumers
and
in
pre­
tax
developer/
builder
profit
for
all
regulatory
options.
Values
in
Table
ES­
9
are
weighted
based
on
the
distribution
of
acreage
by
project
type
and
size.

Changes
in
project
cost
to
buyers
under
100
percent
cost
pass
through
range
from
0.04
percent
to
0.07
percent
(
single
family)
for
Option
2
(
Table
ES­
9)
,
and
are
below
0.1
percent
for
Option
1.
Changes
in
builder
profit
under
zero
cost
pass
through
range
from
­
0.35
percent
(
commercial)
to
­
0.65
percent
(
single
family)
for
Option
2.
Builder
impacts
are
no
worse
than
­
0.13
percent
for
Option
1.
More
complete
comparisons
appear
in
Chapter
Five,
Table
5­
2.

9
For
the
purposes
of
this
analysis,
the
commercial
construction
industry
included
hotels/
motels,
amusement,
religious,
parking
garages,
service
stations,
hospitals,
offices,
public
works
(
including
roads
and
highways)
,
educational,
stores,
and
other
nonresidential
buildings.

ES­
17
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
9a.
Weighted
Average
Change
in
Sales
Price
to
Buyer
(
All
Site
Sizes)
100
Percent
Cost
Pass
Through
Option
Percent
Change
in
Project
Price
to
Buyer
Single­
family
Multifamily
Commercial
Industrial
1
0.01%
0.01%
0.01%
0.01%

2
0.07%
0.04%
0.04%
0.06%

3
0.00%
0.00%
0.00%
0.00%

Source:
EPA
estimates
(
see
Chapter
Five)
.

Table
ES­
9b.
Weighted
Average
Change
in
Builder­
Developer
Profit
(
All
Site
Sizes)
Zero
Cost
Pass
Through
Option
Percent
Change
in
Developer/
Builder
Profit
Single
Multi
Commercial
Industrial
1
­
0.12%
­
0.07%
­
0.07%
­
0.13%

2
­
0.65%
­
0.38%
­
0.35%
­
0.54%

3
0.00%
0.00%
0.00%
0.00%

Source:
EPA
estimates
(
see
Chapter
Five)
.

ES.
4.2
Impacts
on
Model
Construction
Firms
ES.
4.2.1
Impacts
on
Model
Firm
Financial
Ratios
To
analyze
impacts
of
the
proposed
rule
at
the
level
of
the
facility,
EPA
developed
model
facilities
based
on
1997
Census
of
Construction
data,
Census
special
studies
on
the
housing
industry,
and
Dun
&

Bradstreet
financial
data.
EPA
constructed
income
statements
and
balance
sheets
for
each
model
facility
by
scaling
D&
B
data
to
represent
different
sized
facilities
based
on
Census
revenue
figures.
EPA
calculated
incremental
compliance
costs
per
establishment,
then
used
these
model
establishment
income
statements
and
balance
sheets
to
estimate
the
post
regulatory
value
of
the
following
financial
ratios
considered
especially
significant
to
the
construction
industry:

ES­
18
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
 
Gross
Profit
Ratio
 
Return
on
Net
Worth
 
Current
Ratio
 
Debt
to
Equity
Ratio
EPA
expressed
impacts
to
the
model
establishments
engaged
in
the
model
construction
projects
in
terms
of
the
percent
change
from
baseline
value
to
post­
regulatory
value
for
each
financial
ratio.

Table
ES­
10
shows
changes
in
the
financial
ratios
under
each
regulatory
option,
with
the
range
in
outcomes
reflecting
simulations
run
using
varying
assumptions
of
model
firm
size
and
average
project
size
(
see
Chapter
Four
for
further
details)
.
10
Return
on
net
worth
is
the
most
sensitive
ratio
and
shows
the
largest
change
in
value,
followed
in
descending
order
by
the
gross
profit,
debt
to
equity,
and
current
ratios.

Also,
with
the
exception
of
the
return
on
net
worth
ratio,
the
multifamily
model
establishment
tends
to
incur
larger
impacts
to
its
financial
ratios
than
do
the
other
industry
sectors.

Under
the
more
costly
Option
2,
return
on
net
worth
is
projected
to
decrease
as
much
as
5.85
percent
in
the
single­
family
sector
and
3.0
percent
in
the
multifamily
sector,
but
less
than
1.5
percent
in
the
commercial
and
industrial
sectors.
The
gross
profit
ratio
is
projected
to
decrease
by
as
much
as
1
percent
in
the
multifamily
sector,
and
from
about
0.3
to
0.5
percent
in
the
remaining
sectors.
The
debt
to
equity
ratio
is
projected
to
worsen
by
as
much
as
0.6
percent
for
multifamily
sector
establishments;

changes
in
this
ratio
range
from
0.21
percent
(
single­
family)
to
0.31
percent
(
commercial)
for
the
remaining
sectors.
The
largest
impact
on
the
current
ratio
again
occurs
in
the
multifamily
sector
(
a
decrease
of
0.16
percent)
,
with
changes
of
0.05
in
the
other
three
sectors.
Note
that
the
figures
presented
in
this
table
assume
zero
CPT.

10
The
table
shows
results
for
the
four
building
construction
industries
(
single­
family
residential,
multifamily
residential,
commercial,
and
industrial)
.
EPA
conducted
a
separate
analysis
for
the
heavy
construction
industry,
which
found
similar
(
i.
e.
,
very
small)
impacts.
See
Table
5­
6.

ES­
19
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
10.
Impact
of
Compliance
Costs
on
Model
Firm
Financials
­
­
Zero
Cost
Pass
Through
Construction
Industry
and
Regulatory
Option
Percent
Change
in
Financial
Ratios,
From
Baseline
a
Gross
Profit
Return
on
Net
Worth
Current
Ratio
Debt
to
Equity
Min.
Max.
Min.
Max.
Min.
Max.
Min.
Max.

Single­
family
residential
Option
1
0.000%
­
0.230%
0.000%
­
2.540%
0.000%
­
0.020%
0.000%
0.900%

Option
2
0.000%
­
0.520%
0.000%
­
5.850%
0.000%
­
0.050%
0.000%
0.210%

Option
3
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%

Multifamily
residential
Option
1
0.000%
­
0.310%
0.000%
­
0.990%
0.000%
­
0.050%
0.000%
0.200%

Option
2
0.000%
­
0.950%
0.000%
­
3.070%
0.000%
­
0.160%
0.000%
0.640%

Option
3
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%

Commercial
Option
1
0.000%
­
0.170%
0.000%
­
0.530%
0.000%
­
0.020%
0.000%
0.130%

Option
2
0.000%
­
0.400%
0.000%
­
1.250%
0.000%
­
0.050%
0.000%
0.310%

Option
3
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%

Industrial
Option
1
0.000%
­
0.140%
0.000%
­
0.430%
0.000%
­
0.020%
0.000%
0.120%

Option
2
0.000%
­
0.320%
0.000%
­
1.020%
0.000%
­
0.050%
0.000%
0.280%

Option
3
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%
0.000%

a
Ranges
(
minimum
and
maximum)
reflect
results
across
model
firms
of
varying
sizes.
Source:
EPA
estimates
(
see
Chapter
Five)
.

ES.
4.2.2
Closures
and
Employment
Losses
To
estimate
facility
closures,
EPA
generalized
its
model
facility
analysis
above
by
constructing
a
cumulative
distribution
function
for
the
return
on
net
worth,
current,
and
debt
to
equity
ratios
using
the
quartile
values
found
in
D&
B.
EPA
assumed
financial
distress
occurs
if
the
post
regulatory
value
of
an
individual
ratio
falls
below
the
lowest
quartile
benchmark.
EPA
used
a
weighted
average
of
financial
ES­
20
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
distress
indicators
under
the
three
financial
ratios
as
its
estimate
of
the
incremental
probability
of
closure
due
to
the
proposed
rule.
Multiplying
this
probability
by
the
number
of
establishments
represented
by
the
model
results
in
the
projected
number
of
closures.
Multiplying
the
projected
number
of
closures
by
average
facility
employment
results
in
estimated
direct
employment
impacts.

Under
Option
2,
the
largest
number
of
establishment
closures
is
projected
to
occur
in
the
commercial
sector
(
43
closures)
,
followed
by
the
single­
family
residential
sector
(
13
closures)
.
Closures
as
a
percent
of
total
establishments
in
the
sector
are
largest
in
the
commercial
sector
where
about
0.1
percent
of
the
total
are
estimated
to
close.
Employment
impacts
as
a
percent
of
each
sector
 
s
total
employment
are
roughly
proportional
to
closure
impacts.
Adjusting
for
CPT,
as
in
Table
ES­
12,

decreases
the
projected
closure
impacts
significantly.

Table
ES­
11.
Estimated
Facility
Closures
Zero
Cost
Pass
Through
Option
Single­
Family
Multifamily
Commercial
Number
Pct.
of
Total
Number
Pct.
of
Total
Number
Pct.
of
Total
1
4
0.005%
1
0.022%
11
0.028%

2
13
0.015%
3
0.065%
43
0.108%

3
0
0.000%
0
0.000%
0
0.000%

Option
Industrial
Heavy
TOTAL
Number
Pct.
of
Total
Number
Pct.
of
Total
Number
Pct.
of
Total
1
2
0.026%
0
0.000%
18
0.012%

2
7
0.090%
26
0.230%
92
0.063%

3
0
0.000%
0
0.000%
0
0.000%

Source:
EPA
estimates
(
see
Chapter
Five)
.

ES­
21
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
12.
Estimated
Facility
Closures
Estimated
Cost
Pass
Through
Option
Single­
Family
Multifamily
Commercial
Number
Pct.
of
Total
Number
Pct.
of
Total
Number
Pct.
of
Total
1
1
0.001%
0
0.000%
1
0.003%

2
2
0.002%
0
0.000%
4
0.010%

3
0
0.000%
0
0.000%
0
0.000%

Option
Industrial
Heavy
TOTAL
Number
Pct.
of
Total
Number
Pct.
of
Total
Number
Pct.
of
Total
1
0
0.000%
0
0.000%
2
0.001%

2
1
0.013%
3
0.027%
10
0.007%

3
0
0.000%
0
0.000%
0
0.000%

Source:
EPA
estimates
(
see
Chapter
Five)
.

ES.
4.2.3
Barriers
to
Entry
The
proposed
rule
should
not
present
a
barrier
to
new
establishments
entering
the
construction
industry.
This
proposal
does
not
generate
additional
costs
to
start
a
new
construction
company,
nor
does
it
create
a
difference
in
project
costs
between
existing
firms
and
new
entrants
(
such
as
development
fees
or
input
prices)
.
Such
cost
differentials,
if
they
existed,
would
represent
a
barrier
to
new
industry
entrants.

The
impact
of
the
proposed
rule
will
essentially
be
felt
through
increased
borrowing
requirements
to
finance
construction
projects.
On
the
surface
this
should
affect
both
existing
and
new
firms
equally.

New
entrants
may
be
affected
indirectly,
however,
in
that
the
requirements
may
marginally
increase
their
start
up
capital
needs,
in
order
to
qualify
for
the
somewhat
larger
short
term
construction
loans
required
to
undertake
a
project.
EPA
examined
the
ratio
of
compliance
costs
to
current
and
total
assets
to
determine
if
new
market
entrants
would
need
a
significant
amount
of
additional
capital
to
obtain
construction
loans
to
start
a
project.
Note
that
existing
firms
would
face
the
same
burden
 
this
does
not
represent
a
cost
differential
between
new
and
existing
firms.

ES­
22
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
EPA
 
s
analysis
indicates
that
compliance
costs
would
represent
a
maximum
of
0.82
percent
of
model
establishments
 
current
assets
(
(
0.6
percent
of
total
assets)
under
Option
2.
As
above,
the
maximum
projected
impact
occurs
in
the
multifamily
sector.
For
the
other
sectors,
compliance
costs
represent
less
than
0.3
percent
of
current
assets.
This
methodology
is
conservative
because
it
does
not
account
for
the
fact
that
a
firm
would
typically
be
expected
to
finance
20
percent
of
the
incremental
compliance
costs
from
their
own
financial
resource
to
obtain
the
loan
 
not
the
full
amount
as
assumed
here.
11
Table
ES­
13.
Barrier
to
Entry
Analysis
­
­
Zero
Cost
Pass
Through
Option
Comb.
Compliance
Costs
Divided
by:
Current
Assets
Total
Assets
Min
Max
Min
Max
Single­
family
Residential
1
0.000%
0.100%
0.000%
0.070%
2
0.000%
0.230%
0.000%
0.170%
3
0.000%
0.000%
0.000%
0.000%

Multifamily
Residential
1
0.000%
0.260%
0.000%
0.190%
2
0.000%
0.820%
0.000%
0.600%
3
0.000%
0.000%
0.000%
0.000%

Commercial
1
0.000%
0.120%
0.000%
0.090%
2
0.000%
0.270%
0.000%
0.220%
3
0.000%
0.000%
0.000%
0.000%

Industrial
1
0.000%
0.110%
0.000%
0.080%
2
0.000%
0.250%
0.000%
0.190%
3
0.000%
0.000%
0.000%
0.000%
Source:
EPA
estimates
(
see
Chapter
Five)
.

11
The
table
shows
results
for
the
four
building
construction
industries
(
single­
family
residential,
multifamily
residential,
commercial,
and
industrial)
.
EPA
conducted
a
separate
analysis
for
the
heavy
construction
industry,
which
found
similar
(
i.
e.
,
very
small)
impacts.
See
Table
5­
10.

ES­
23
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
4.3
Impacts
on
National
Construction
Markets
and
the
National
Economy
EPA
developed
a
series
of
regional
market
models
to
estimate
the
impact
of
compliance
costs
of
the
proposed
regulation
on
markets
for
new
construction.
In
addition,
a
national
partial
equilibrium
model
estimated
changes
in
the
national
market
for
new
single­
family
homes.
The
results
of
these
models
were
aggregated
to
estimate
the
national
impacts
of
the
regulation.

Table
ES­
14
summarizes
the
annual
national
costs
to
builders
of
each
option
in
terms
of
the
incremental
cost
ESC
management
over
the
cost
under
the
baseline
conditions.

Table
ES­
14.
Estimated
National
Costs
of
ESC
Controls
All
dollar
values
in
constant,
pre­
tax,
1997
dollars
Option
National
Costs
by
Type
of
Construction
(
$
millions)
Total
(
$
millions)
Single­
family
Multifamily
Commercial
Industrial
1
$
24.1
$
11.9
$
78.4
$
3.7
$
118.1
2
$
121.5
$
59.4
$
277.3
$
11.0
$
469.2
3
$
0.0
$
0.0
$
0.0
$
0.0
$
0.0
National
Costs
per
Unit
by
Type
of
Construction
$
/
house
$
/
sq
ft
$
/
sq
ft
$
/
sq
ft
1
$
16.91
$
0.003
$
0.007
$
0.008
2
$
90.79
$
0.019
$
0.031
$
0.030
3
$
0.00
$
0.000
$
0.000
$
0.000
Source:
EPA
estimates
(
see
Chapter
Five)
.

EPA
 
s
literature
review
(
Chapter
Four)
suggests
the
long­
run
supply
of
housing
is
considered
highly
elastic
while
demand
for
new
housing
construction
is
relatively
inelastic.
Under
these
conditions,

changes
in
costs
are
passed
through
to
home
buyers
without
a
large
loss
in
sales.
Non­
residential
consumers
are
more
price
sensitive
and
passed
through
costs
contribute
to
a
larger
reduction
in
construction
in
many
markets.
The
decrease
in
number
of
units
sold
varied
by
option
combination
from:

 
0.0
to
0.02
percent
for
single­
family
housing
 
0.0
to
0.01
percent
for
multifamily
housing
 
0.0
to
0.07
percent
for
commercial
construction
and
 
0.0
to
0.32
percent
for
industrial
construction
ES­
24
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Additional
analyses
of
the
single­
family
housing
market
assessed
the
impact
of
the
regulation
on
the
affordability
of
newly
constructed
homes.
One
measure
was
the
number
of
households
that
would
no
longer
qualify
for
a
mortgage
to
buy
the
model
median
priced
new
home.
In
the
most
costly
option
combination,
29,100
households
that
would
have
qualified
for
a
mortgage
in
the
baseline
would
no
longer
qualify
when
all
of
the
compliance
costs
were
included
in
the
home
price.
As
a
percent
of
households
that
qualified
in
the
baseline
the
percentage
no
longer
qualifying
ranged
from
0
to
0.15%
.

Another
measure
of
affordability
is
the
Housing
Opportunity
Index
(
HOI)
which
measures
the
proportion
of
households
in
a
housing
market
that
can
afford
the
median
priced
home.
Across
more
than
200
metropolitan
areas
modeled,
HOI
changed
by
a
maximum
of
0.02
percent
for
Option
1
and
0.11
percent
for
Option
2.

The
model
firm
analysis
showed
the
number
of
jobs
that
may
be
lost
in
the
construction
industry.

These
losses
have
effects
throughout
the
economy
as
laid
off
workers
consume
less
and
fewer
projects
are
undertaken.
The
market
model
generated
estimates
of
these
indirect
employment
losses.
The
reduction
in
construction
activity
generates
national
employment
losses
in
all
industries
of
6,000
jobs
under
Option
2.
These
losses
are
offset,
however,
by
spending
to
implement
the
program
which
creates
new
jobs.
EPA
 
s
analysis
indicates
that
this
stimulus
effect
is
larger
than
the
loss
of
activity
and
produces
a
net
increase
of
7,200
new
jobs
under
Option
2.
Compliance
costs
passed
on
to
consumers
reduce
the
resources
consumers
have
for
other
goods
and
services
as
they
spend
more
on
storm
water
management.

This
again
creates
a
drag
on
employment.
The
net
loss
in
jobs
in
the
national
economy
is
280
for
Option
1
and
1,400
for
Option
2.

Finally,
the
market
models
also
estimate
the
social
cost
of
the
regulation.
Given
the
relatively
small
shifts
in
supply
and
inelastic
demand
the
social
cost,
or
deadweight
loss,
of
the
regulation
is
only
$
200,000
for
the
most
costly
option.

ES­
25
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
5
SMALL
ENTITY
IMPACT
ANALYSIS
In
accordance
with
the
Regulatory
Flexibility
Act
(
RFA,
5
U.
S.
C.
et
seq.
,
Public
Law
96­
354)
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act
(
SBREFA)
of
1996,
EPA
has
considered
the
effects
that
the
proposed
C&
D
regulations
may
have
on
small
entities.
The
RFA
generally
requires
an
agency
to
prepare
a
regulatory
flexibility
analysis
of
any
rule
subject
to
notice
and
comment
rulemaking
requirements
under
the
Administrative
Procedure
Act
or
any
other
statute
unless
the
agency
certifies
that
the
rule
will
not
have
a
 
significant
impact
on
a
substantial
number
of
small
entities.
 
12
For
this
proposed
rulemaking,
EPA
could
not
conclude
that
costs
are
sufficiently
low
to
justify
such
 
certification.
 
Instead,
EPA
conducted
outreach
to
small
businesses,
convened
a
Small
Business
Advocacy
Review
(
SBAR)
panel,
and
prepared
an
Initial
Regulatory
Flexibility
Analysis
(
IRFA)
.

Chapter
Six
details
the
IRFA
and
presents
EPA
 
s
assessment
of
the
impacts
of
the
proposed
regulations
on
small
businesses
in
the
C&
D
industry.

ES.
5.1
Definition
of
Affected
Small
Entities
The
RFA
defines
a
 
small
entity
 
as
a
small
not­
­
for­
profit
organization,
small
governmental
jurisdiction,
or
small
business.
EPA
expects
that
the
principal
impact
of
the
proposed
C&
D
regulations
on
small
entities
will
fall
on
(
1)
small
businesses
that
undertake
C&
D
activities
and
(
2)
small
governmental
units
involved
in
permitting
C&
D
activities.

Small
businesses
are
defined
(
with
some
exception)
according
to
the
size
standards
established
by
the
Small
Business
Administration
(
SBA)
.
SBA
establishes
criteria
for
identifying
small
businesses
based
on
either
the
number
of
employees
or
annual
revenues
(
13
CFR
121)
.
13
Qualifying
revenue
levels
vary
12
The
preparation
of
an
IRFA
for
a
proposed
rule
does
not
foreclose
certifying
no
significant
impact
for
the
final
rule
(
USEPA,
1999)
.

13
Employees
counted
in
determining
size
includes
all
individuals
employed
on
a
full­
time,
part­
time,
temporary
or
other
basis.
Employment
is
measured
as
the
average
number
of
employees
for
each
pay
period
over
the
previous
12
months.
For
standards
based
on
revenues,
SBA
uses
the
average
revenues
over
the
last
three
completed
fiscal
years.

ES­
26
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
by
NAICS
code
and
differ
among
NAICS
industries.
Within
the
C&
D
industry
there
is
a
range
of
qualifying
revenue
levels,
from
$
5.0
million
for
NAICS
23311
(
Land
subdivision
and
development)
,
to
$
27.5
million
for
the
majority
of
industries
within
NAICS
233
and
234.
For
businesses
in
the
special
trades
sector
(
as
defined
for
this
proposed
rule)
,
the
small
business
revenue
threshold
is
$
11.5
million.

See
Table
ES­
6
above
for
the
number
of
establishments
in
the
C&
D
industry
that
fall
below
these
revenue
thresholds.

ES.
5.2
Small
Entity
Impacts
EPA
has
conducted
an
IRFA
for
the
proposed
rule.
The
IRFA
includes
a
description
and
estimates
of
the
following:

 
Number
of
small
businesses
that
will
be
affected;

 
The
reporting,
recordkeeping,
and
other
compliance
requirements
of
the
proposed
rule;

 
Any
Federal
rules
that
may
duplicate,
overlap,
or
conflict
with
the
proposed
rule;

 
Any
significant
regulatory
alternatives
to
the
proposed
rule
that
would
accomplish
the
stated
objectives
of
the
applicable
statutes
and
which
minimize
impacts
to
small
businesses.

As
presented
in
Table
ES­
6,
approximately
97,085
businesses
are
potentially
affected
by
the
proposed
rule;
over
98
percent
of
these
businesses
(
95,753)
may
be
classified
as
small
businesses.
EPA
assessed
the
impacts
to
small
businesses
by
examining
the
ratio
of
estimated
compliance
costs
to
firm
revenues.
Impacts
are
determined
by
the
number
and
percentage
of
firms
incurring
costs
that
exceed
one
percent
and
three
percent
of
revenues.
EPA
relied
on
the
model
facility
approach
to
assess
the
impacts
of
the
proposed
rule
on
small
businesses.
Each
model
facility
actually
represents
a
set
of
approximately
similar
firms
(
e.
g.
,
similar
levels
of
employment
within
some
bounded
range)
with
revenues
that
form
a
statistical
distribution
around
the
model
facility
 
s
revenue
figure.
These
distributions
were
used
to
estimate
the
number
and
percentage
of
small
business­
owned
establishments
in
each
industry
sector
that
incur
compliance
costs
exceeding
one
and
three
percent
of
revenues.
The
results
are
presented
as
ranges
that
represent
the
lower
and
upper
bounds
of
the
impacts
calculated
by
EPA.

ES­
27
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Additional
detail
on
EPA
 
s
methods
may
be
found
in
Chapter
Six,
Section
6.4.
Table
ES­
15a
presents
the
results
of
the
one
percent
revenue
test
and
Table
ES­
15b
presents
the
results
for
the
three
percent
test.

Table
ES­
15a.
Estimated
Number
of
Small
Business­
Owned
Establishments
With
Compliance
Costs
Exceeding
1
Percent
of
Revenues
Zero
Percent
Cost
Pass
Through
Option
Single­
family
Multifamily
Commercial
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
1
0
47
0.000%
0.138%
0
5
0.000%
0.110%
0
62
0.000%
0.159%

2
40
140
0.118%
0.412%
8
18
0.175%
0.395%
18
234
0.046%
0.599%

3
0
0
0.000%
0.000%
0
0
0.000%
0.000%
0
0
0.000%
0.000%

Option
Industrial
Heavy
TOTAL
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
1
0
12
0.000%
0.160%
0
0
0.000%
0.000%
0
126
0.000%
0.000%

2
2
36
0.270%
0.480%
36
199
1.863%
0.337%
104
627
0.109%
0.109%

3
0
0
0.000%
0.000%
0
0
0.000%
0.000%
0
0
0.000%
0.000%

Source:
EPA
estimates
(
see
Chapter
Six)
.

ES­
28
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
15b.
Estimated
Number
of
Small
Business­
Owned
Establishments
With
Compliance
Costs
Exceeding
3
Percent
of
Revenues
Zero
Percent
Cost
Pass
Through
Option
Single­
family
Multifamily
Commercial
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
1
0
15
0.000%
0.044%
0
2
0.000%
0.044%
0
21
0.000%
0.054%

2
0
45
0.000%
0.133%
0
6
0.000%
0.132%
0
77
0.000%
0.197%

3
0
0
0.000%
0.000%
0
0
0.000%
0.000%
0
0
0.000%
0.000%

Option
Industrial
Heavy
TOTAL
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Number
Pct.
of
Small
Businesses
Low
High
Low
High
Low
High
Low
High
Low
High
Low
High
1
0
4
0.000%
0.053%
0
0
0.000%
0.000%
0
42
0.000%
0.044%

2
0
12
0.000%
0.160%
0
65
0.000%
0.607%
0
205
0.000%
0.214%

3
0
0
0.000%
0.000%
0
0
0.000%
0.000%
0
0
0.000%
0.000%

Source:
EPA
estimates
(
see
Chapter
Six)
.

ES.
6
BENEFITS
ANALYSIS
The
key
categories
of
benefits
examined
for
the
proposed
rule
include
decreased
stream
channel
sedimentation
and
reduced
in­
stream
total
suspended
solids
(
TSS)
and
sediment
concentration.

ES.
6.1
Benefits
Methodology
EPA
 
s
Environmental
Assessment
estimates
the
impact
of
the
proposed
regulation
on
several
measures
of
environmental
quality
with
implications
for
social
well­
being.
Sediment
in
waterways,
for
example,
imposes
costs
on
society
through
the
degradation
of
water
quality,
and
filling
in
of
water
storage
impoundments
and
navigational
channels.
EPA
estimated
the
monetary
benefits
of
the
regulation
by
connecting
these
environmental
measures
to
the
related
costs
they
would
continue
to
impose
on
society
in
ES­
29
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
the
absence
of
the
proposed
regulations.
Such
avoided
cost
benefit
valuation
methods
yield
lower
bound
estimates
of
value.
Since
the
methodology
for
assessing
and
quantifying
each
benefit
category
differs
the
sections
below
present
only
a
summary
of
the
benefits
methodology.
More
complete
details
can
be
found
in
Chapter
Seven.

ES.
6.2
Environmental
Assessment
and
Benefits
Analysis
ES.
6.2.1
Overview
of
Environmental
Assessment
and
Benefits
Analysis
The
environmental
effects
of
the
options
were
measured
in
terms
of
reductions
in
discharge
of
sediment.
Option
1
is
expected
to
result
in
discharge
of
2.6
to
7.9
million
fewer
tons
of
total
solids
annually.
Option
2
is
expected
to
result
in
discharge
of
11.1
million
fewer
tons
annually.
These
reductions
contribute
to
savings
in
dredging
costs
for
water
storage
impoundments
and
navigational
channels.
Table
ES­
16
summarizes
the
results
of
the
environmental
assessment.
More
complete
results
are
shown
in
Table
8­
2.
These
estimates
are
the
starting
point
for
benefit
valuation.

Table
ES­
16.
Environmental
Measures
(
thousand
tons
per
year)

Source:
EPA
estimates
(
See
Chapter
Eight)
.
Decrease
from
baseline
in:
Option
1
Option
2
Low
High
Settleable
solids
Turbidity
producing
solids
2,110
527
6,330
1,583
8,901
2,225
Total
solids
2,638
7,913
11,127
ES.
6.2.2
Avoided
Water
Treatment
Costs
Turbid
water
requires
pretreatment
before
it
can
be
used
in
industrial
or
municipal
water
systems.

By
removing
turbidity­
producing
solids
from
streams,
the
proposed
regulation
reduces
the
need
for
pretreatment,
saving
water
users
money.
The
total
benefit
shown
in
Table
ES­
17
is
quite
small,
as
storm
ES­
30
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
water
runoff
is
only
one
source
of
turbidity
so
its
removal
does
not
obviate
the
need
for
pretreatment
entirely.
The
marginal
costs
of
pretreatment
are
also
quite
low.

ES.
6.2.3
Avoided
Loss
of
Water
Storage
Capacity
Reservoirs
and
impoundments
serve
many
purposes
but
generally
cannot
function
if
they
fill
with
silt.
This
estimate
of
value
for
this
benefit
category
is
based
on
the
costs
of
dredging
sediment
that
settles
in
reservoirs.
Only
a
small
portion
of
sediment
reaches
water
bodies
that
would
be
dredged
if
filled,
so
benefits
for
this
category
are
relatively
small.

ES.
6.2.4
Avoided
Navigational
Dredging
Like
water
storage
capacity,
navigational
channels
must
be
dredged
when
they
fill
with
sediment.

Keeping
sediment
out
of
streams
reduces
the
need
for
dredging.
Only
a
small
share
of
streams
flow
to
commercial
waterways
and
harbors
so
this
benefit
is
also
relatively
small.

Table
ES­
17.
Point
Estimates
of
Benefits
by
Category
(
$
1997
million
per
year)

Option
Benefit
Category
Total
Water
Treatment
Water
Storage
Navig.
Dredging
1
$
0.1
$
7.1
$
2.6
$
9.7
2
$
0.2
$
15.0
$
5.4
$
20.6
3
 
 
 
$
0.0
Source:
EPA
estimates
(
see
Chapter
Eight)
.

ES­
31
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
6.2.5
Non­
quantified
Benefits
Several
categories
of
benefits
discussed
in
other
studies
were
considered
for
this
benefit
assessment.
For
the
most
part,
the
benefits
expected
to
be
derived
from
these
categories
are
relatively
small
and
difficult
to
quantify.
Therefore,
EPA
discusses
the
following
categories
qualitatively,
rather
than
attempting
to
quantify
them:

 
Water
contact
recreation
 
Biodiversity
effects
 
Wetland
preservation
 
Other
sources
of
benefits
(
decrease
in
clogged
roadside
and
irrigation
ditches)

Chapter
Seven
provides
more
detailed
explanation
and
discussion
of
these
qualitative
benefits
categories.

ES.
7
SOCIAL
COSTS
AND
BENEFITS
The
social
costs
of
the
proposed
regulation
represent
the
real
commitment
of
resources
by
society
to
administering,
implementing,
and
enforcing
the
rule.
Direct
social
costs
include
the
compliance
costs
of
construction
firms,
administration
costs
of
governments,
and
operation
and
maintenance
costs
of
home
owners,
municipalities,
industrial
and
commercial
property
owners.
This
regulation
is
not
expected
to
have
substantial
indirect
social
costs
because
it
does
not
propose
any
radical
changes
in
the
production
process
or
technology.
The
anatomy
of
the
market
for
new
construction
also
limits
the
loss
of
social
welfare.

Table
ES­
18
compares
the
sum
of
these
social
costs
with
the
benefits
estimated
in
Chapter
Eight
and
discussed
above.
The
social
costs
are
greater
than
the
monetized
benefits.

ES­
32
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
Table
ES­
18.
Social
Costs
and
Benefits
of
Options
(
1997
$
Million
per
year)

Option
Installation,

Design
and
Permitting
Operation
and
Maintenance
Government
Costs
Deadweight
Loss
Total
Social
Costs
Total
Benefits
1
$
118.1
$
421.2
$
0.0
$
0.0
$
48.0
$
0.0
$
0.0
$
0.3
$
0.0
$
0.0
$
0.2
$
0.0
$
118.2
$
9.7
$
20.6
$
0.0
2
$
469.6
3
$
0.0
Source:
EPA
estimates
(
see
Chapter
Nine)
.

ES.
8
ANALYSIS
OF
OTHER
IMPACTS
ES.
8.1
Unfunded
Mandates
EPA
has
determined
that
the
proposed
C&
D
regulations
may
contain
a
federal
mandate
that
may
result
in
expenditures
of
$
100
million
or
more
for
the
private
sector
in
any
one
year.
Accordingly,
EPA
has
prepared
a
written
statement
in
accordance
with
section
202
of
the
UMRA.
In
addition,
EPA
has
determined
that
the
proposed
C&
D
regulations
do
not
include
a
federal
mandate
that
may
result
in
estimated
costs
of
$
100
million
or
more
to
either
state,
local,
or
tribal
governments
in
the
aggregate.
Nor
do
the
proposed
regulations
contain
regulatory
requirements
that
might
significantly
or
uniquely
affect
small
governments.
Therefore,
this
proposal
is
not
subject
to
the
requirement
of
section
203
of
the
UMRA.

ES.
8.2
Environmental
Justice
EPA
has
determined
that
the
proposed
C&
D
regulations
will
not
disproportionately
affect
minority
or
low­
income
populations,
nor
will
they
have
disproportionately
high
health
or
environmental
effects.

ES­
33
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
8.3
Children
 
s
Health
EPA
has
determined
that
the
proposed
C&
D
regulations
do
not
have
any
significant
implications
in
regard
to
children
 
s
health
or
safety.

ES­
34
Economic
Analysis
of
Construction
and
Development
Proposed
Effluent
Guidelines
May
2002
ES.
9
REFERENCES
BEA,
2002.
Bureau
of
Economic
Analysis.
National
income
and
product
accounts
tables.
Available
at
http:
/
/
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bea.
doc.
gov/
bea/
dn/
nipaweb/
index.
asp
Joint
Center
2001.
Remodeling
homes
for
changing
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(
Joint
Center
for
Housing
Studies
of
Harvard
University)
.

NAHB
no
date.
The
Next
Decade
for
Housing.
National
Association
of
Home
Builders.
Available
at
http:
/
/
www.
nahb.
com/
facts/
nextdecadeforecast.
pdf.

Rappaport
B.
A.
,
T.
A.
Cole.
(
U.
S.
Census
Bureau,
Manufacturing
and
Construction
Division)
.
2000.
Construction
sector
special
study:
Housing
starts
statistics­
­
A
profile
of
the
homebuilding
industry.

Seiders
2001.
David
Seiders.
Housing
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the
Economy
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the
Aftermath
of
the
September
11
Attacks
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America.
National
Association
of
Home
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January
31,
2002.
Available
at
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/
/
www.
nahb.
com/
news/
Jan31­
02seiderscommentary.
htm.

U.
S.
Census
Bureau.
2000.
1997
Economic
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United
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/
/
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census.
gov/
epcd/
ec97/
us/
US000_
23.
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U.
S.
EPA.
1999.
Revised
Interim
Guidance
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Regulatory
Flexibility
Act
as
amended
by
the
Small
Business
Regulatory
Enforcement
Fairness
Act.
March
29.
Available
at
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/
/
www.
epa.
gov/
sbrefa/
documents/
igui99.
pdf.

U.
S.
Small
Business
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Statistics
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Firm
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[
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gov/
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stats/
data.
html.

ES­
35