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Hovnanian Enterprises, Inc.Clean Water Act Settlement

(WASHINGTON, D.C. - April 20, 2010) Hovnanian Enterprises, Inc., a builder of residential homes nationwide, has agreed today to pay a $1 million civil penalty to resolve alleged Clean Water Act violations at 591 construction sites in 18 states and the District of Columbia, the U.S. Environmental Protection Agency (EPA) and the U.S. Justice Department announced today. As part of the settlement, the company will also implement a company-wide stormwater compliance program designed to improve compliance with storm water run-off requirements at existing and future construction sites around the country.

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Overview of Company and Location of Sites

Hovnanian Enterprises, Inc. (Hovnanian) is a Delaware corporation that designs, constructs, markets and sells a variety of residential properties. It is among the top ten homebuilding operations in the country based on revenues and number of new homes sold.

This settlement covers about 590 sites in eighteen states and the District of Columbia (a number of these sites are in the Chesapeake Bay Watershed):

  • Arizona: 13 sites
  • California: 50 sites
  • District of Columbia: 1 site
  • Delaware: 3 sites
  • Florida: 28
  • Georgia: 5 sites
  • Illinois: 7 sites
  • Kentucky: 1 site
  • Maryland: 79 sites
  • Minnesota: 11 sites
  • North Carolina: 42 sites
  • New Jersey: 54 sites
  • New York: 1 site
  • Ohio: 50 sites
  • Pennsylvania: 43 sites
  • South Carolina: 6 sites
  • Texas: 116 sites
  • Virginia: 70 sites
  • West Virginia: 10 sites

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  • Discharge of pollutants in stormwater without a permit pursuant to Section 301 of the Clean Water Act (CWA), 33 U.S.C. § 1311
  • Failure to provide information in the form of permit applications to the EPA Administrator pursuant to CWA Section 308, 33 U.S.C. § 1318
  • Failure to comply with the conditions of permits issued pursuant to CWA Section 402, U.S.C. § 1342, resulting in the discharge of pollutants in stormwater from construction sites, which is a violation of CWA Section 301. Violations of permit conditions including the failure to design, implement and maintain adequate best management practices (BMPs) at construction sites.

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Injunctive Relief

The consent decree requires Hovnanian to implement a compliance program that will ensure adequate management oversight of construction sites and compliance with National Pollution Discharge Elimination System (NPDES) storm water permits. The compliance program includes:

  • Designation of a company stormwater compliance manager who will oversee the compliance program nationwide
  • Designation of trained and qualified site-level and division-level storm water compliance managers for each site who will be responsible for compliance at that site
  • Specific requirements for site-specific stormwater pollution prevention plans (SWPPPs)
  • A requirement to conduct and document a pre-construction inspection and review at every site prior to commencing construction activity
  • Requirements for routine site inspections including the use of standardized forms approved by EPA which require Hovnanian to document completion of all responsive actions taken to achieve or maintain compliance at a site
  • A requirement that the division-level storm water compliance manager conduct an oversight compliance inspection and review at every site within his/her division once every calendar quarter
  • Implementation of a stormwater training program for Hovnanian employees that includes annual refresher training for stormwater compliance managers
  • Implementation of a stormwater orientation program for contractors
  • A requirement to submit national compliance summary reports, which summarize the results of the quarterly oversight inspections and review, to EPA

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Pollutant Reductions

As a result of this settlement, EPA estimates the sediment discharged in stormwater runoff to be reduced annually by:

  • 366,208,399 pounds from Hovnanian sites nationwide
  • 81,706,940 pounds within the Chesapeake Bay watershed

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Health and Environmental Effects

Discharges of stormwater runoff, including runoff from construction sites, can have a significant impact on water quality. Construction activities alter natural landscapes. During construction, earth is compacted, excavated and displaced, and vegetation is removed. These activities increase runoff and erosion, thus increasing sediment transported to receiving waters. In addition to sediment, as stormwater flows over a construction site, it can pick up other pollutants such as debris, pesticides, petroleum products, chemicals, solvents, asphalts and acids which may also contribute to water quality problems.

Sediment-laden runoff can result in increased turbidity and decreased oxygen in receiving waters, which in turn results in loss of in-stream habitat for fish and other aquatic species. Sediment can kill fish directly, destroy spawning beds, suffocate fish eggs and bottom dwelling organisms, and block sunlight resulting in reduced growth of beneficial aquatic grasses. In addition, sediment can impact the treatment of drinking water resulting in higher treatment costs, and can result in the loss of drinking water reservoir storage capacity and decrease the navigational capacity of waterways.

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Civil Penalty

As part of the settlement, Hovnanian has agreed to pay a total civil penalty of $1 million to the United States, the District of Columbia, and the states of Maryland, Virginia, and West Virginia. The penalty is allocated as follows:

  • United States: $864,000
  • District of Columbia: $1,000
  • Maryland: $67,000
  • Virginia: $59,500
  • West Virginia: $8,500

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State Partners

The states participating with the United States in this settlement are Maryland, Virginia, and West Virginia, as well as the District of Columbia.

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Comment Period

The proposed settlement, lodged in the U.S. District Court for the Eastern District of Pennsylvania, is subject to a 30-day comment period and final court approval. Information on submitting comments is available at the Department of Justice website

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For additional information, contacts:

Kelly Kaczka Brantner
U.S. Environmental Protection Agency (2242A)
1200 Pennsylvania Ave., N.W.