On July 10, HUD published a Federal Register notice of its new rescission proposal, which seeks to replace major components of the core 2024 flood-risk mandates with the agency's previous floodplain review framework. It would, however, maintain select procedural flexibilities introduced in 2024 regarding floodways, categorical exclusions, exemptions under Part 55 as well as the overall decision-making process, the agency says.

The proposal also aligns with FEMA and National Flood Insurance Program standards. The agency said it would make floodplain and wetland regulations simpler, more predictable and easier to implement.

“These changes reduce costs, streamline compliance and support the development and preservation of affordable housing while maintaining strong flood risk management practices,” according to HUD’s website.

Groups including the National Association of Home Builders plan to submit comments on the proposal. The group "plans to support repeal of the [flood-risk] rule, however, we are still reviewing the specifics and don’t want to get ahead of our official comments that will be submitted,” a spokesperson told ENR.

Some industry groups including the non-profit Construction Financial Management Association and  Association of State Floodplain Managers raised questions over the agency’s cost-reduction claims.

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While the proposal would likely lower initial construction costs, homeowners, insurers and lenders would also need to consider lifecycle costs and risk implications, said Neil Shah, the financial group's CEO and president. “In particular, the potential for increased flood risk over the life of the asset could have implications for insurance, financing, maintenance and ultimately the total cost of ownership,” hr said Shah, adding that he has not yet taken a position on the proposal.

Chad Berginnis, the floodplain managers' group executive director, said the proposal would make projects less resilient and result in higher taxpayer costs “because we will have to bail those places out when they get hit” by a natural disaster.

“What really bugs me is that the administration's justification for this is a false narrative [that] seemed to question even the cost of insurance,” he said. “You build a home that is less resilient, your insurance is going to be higher—period.”

The proposed rescission would be “a concerning step backward for the safety and resilience of HUD-assisted housing,” the U.S. Green Building Council said in a statement.

“Flooding is the most common natural disaster in the U.S. and among the most costly, causing billions of dollars’ worth of damage each year and displacing tens of thousands of people from their homes, it said. The rule "provides a critical framework for assessing current and future flood risks and improving resilience to withstand those risks, especially as we are seeing increasing frequency and intensity of floods across the country.” The proposal, the group said, ignores the costs of those risks and would leave new affordable housing and residents more vulnerable to flooding.

The Union of Concerned Scientists also criticized the proposal, saying in a statement that it would result in increased risk of flooding from hurricanes, sea level rise and severe weather. 

“This rollback returns us to antiquated minimum standards developed decades ago and uninformed by the latest climate science,” said Shana Udvardy, group senior climate resilience policy analyst. “This head-in-the-sand approach to flood risk will unnecessarily put new buildings, facilities and people’s homes at risk of flooding, disproportionately harming low-income residents, people of color, the elderly and those with disabilities while costing taxpayer more.”