JULY 2008

Four of the nation’s largest home builders penalized for storm water violations

Four of the nation’s largest home builders have agreed to pay civil penalties totaling $4.3 million to resolve alleged violations of the Clean Water Act, the Justice Department and United States Environmental Protection Agency (EPA) announced in June. The companies also have agreed to implement company-wide compliance programs that go beyond current regulatory requirements and put controls in place that will keep 1.2 billion pounds of sediment from polluting our nation’s waterways each year.

The home builders are Centex Homes, based in Dallas, Texas; KB Home, based in Los Angeles, California; Pulte Homes, based in Bloomfield Hills, Michigan; and Richmond American Homes, based in Denver, Colorado. The four separate settlements resolve alleged violations of storm water run-off regulations at construction sites in 34 states and the District of Columbia. Each company will pay the following penalties:

  • Centex: $1,485,000
  • KB Home: $1,185,000
  • Pulte: $ 877,000
  • Richmond: $ 795,000

Pulte Homes has also agreed to complete a supplemental environmental project at a minimum cost of $608,000. The project will reduce the amount of sediment going into a northern California watershed and improve the habitat for aquatic life.

Along with the federal government, seven state co-plaintiffs have joined the settlements. Those states are Colorado, Maryland, Virginia, Missouri, Nevada, Tennessee, and Utah. Each of the seven states will receive a portion of the penalties based on the number of sites located within that state.

Combined, the four builders accounted for more than 124,000 home closings in 2006, and are ranked nationally among the top ten home builders in terms of home closings and revenues.

The government complaints allege a common pattern of violations that was discovered by reviewing documentation submitted by the companies and through federal and state site inspections. The alleged violations include not obtaining permits until after construction had begun or failing to obtain the required permits at all. At the sites that did have permits, violations included failure to prevent or minimize the discharge of pollutants, such as silt and debris, in storm water runoff.

The settlements require the companies to develop improved pollution prevention plans for each site, increase site inspections and promptly correct any problems that are detected. The companies must properly train construction managers and contractors, and are required to have trained staff at each construction site. They also must implement a management and internal reporting system to improve oversight of on-the-ground operations and submit annual reports to EPA.

The settlements are the latest in a series of enforcement actions to address storm water violations from construction sites around the country. A similar consent decree, reached in February with Home Depot, required the company to pay a fine of $1.3 million and establish a comprehensive storm water compliance plan to prevent future violations.

The consent decrees, lodged in the U.S. District Court for the Eastern District of Virginia, are subject to a 30-day public comment period and approval by the federal court. The companies are required to pay the penalty within 30 days of the court’s approval of the settlement.