Trump orders EPA and Army Corps to revise wetland rules blocking housing construction

President Trump signed "Removing Regulatory Barriers to Affordable Home Construction" on March 13, 2026. The order directs the EPA Administrator and the Secretary of the Army to review and revise stormwater, wetlands, and other water-related permitting requirements to reduce building and ownership costs. It also requires HUD to develop regulatory best practices for state and local governments covering permitting streamlining, fee caps, building code flexibility, and removal of green-energy construction mandates.

A companion executive order signed the same day, "Promoting Access to Mortgage Credit," directs the Federal Housing Finance Agency and banking regulators to ease lending requirements for community and smaller banks. The FHFA oversees Fannie Mae and Freddie Mac, which purchase and guarantee most residential mortgages in the U.S. Rules governing those entities directly affect which loans banks are willing to make and on what terms.

The executive orders are directives to agencies, not rule changes themselves. Each specific regulatory change the administration wants to make — whether to wetlands permits, building codes, or lending standards — must go through the notice-and-comment rulemaking process required by the Administrative Procedure Act. That process allows the public to submit comments, and final rules can be challenged in federal court. The orders set the policy direction but do not themselves alter any existing regulation.

Environmental groups noted immediately that wetlands and stormwater permits under the Clean Water Act protect waterways from runoff pollution associated with construction and development. Courts have already grappled extensively with the scope of those permits following the Supreme Court's 2023 decision in Sackett v. EPA, which narrowed federal jurisdiction over wetlands. The Trump administration's effort to further loosen those rules will face legal challenges from environmental organizations.

The U.S. housing shortage is well-documented. The National Association of Realtors has estimated the country needs 5 to 6 million more homes than currently exist to meet demand. Underbuilding accelerated after the 2008 financial crisis, when residential construction collapsed and never fully recovered relative to population growth. Construction costs, labor shortages, zoning restrictions, and permitting delays have all contributed to the shortage, which has pushed home prices to record highs in many markets.

Housing advocates across the political spectrum support reducing regulatory barriers to construction. However, there is significant disagreement about which regulations are truly barriers versus which protect public health, environmental quality, and community character. The executive order targets federal regulations but does not address the zoning codes and local land use restrictions that housing economists often identify as the most significant constraint on new construction.

The executive order's targeting of green-energy building requirements reflects the administration's broader rollback of climate-related rules. Green building standards, such as requirements for energy-efficient insulation, windows, and heating systems, add upfront construction costs but reduce long-term energy bills for homeowners and renters. Housing advocates who support affordable housing have sometimes split on green building requirements, with some arguing the upfront cost adds to affordability problems and others arguing the long-term savings benefit lower-income residents most.

The Federal Register published the housing construction order on March 18, 2026. The FHFA piece of the companion order, covering mortgage credit, targets the standards Fannie Mae and Freddie Mac use to guarantee mortgages. Easing those standards could allow more people to qualify for government-backed mortgages but also carries the risk of extending credit to borrowers more likely to default, which was a contributing factor in the 2008 financial crisis.