‘This senseless nationwide codes mandate will significantly raise housing costs,’ said NAHB chairman Carl Harris.
The Biden administration’s latest energy efficiency rule for new home construction will push up costs and make housing even less affordable at a time when house prices have just hit record highs, according to two home builders associations.
Last week, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) announced the adoption of updated minimum energy standards for new single-family and multifamily housing construction built with federal financing or funding.
The Biden administration, which has set its sights on fighting the supposed ill effects of climate change, boasts that the new rules will generate an estimated reduction of as much as 6.35 million metric tons in carbon emissions over 30 years.
The updated energy efficiency standards, which go into effect on May 28, are referred to in the agencies’ Final Notice as 2021 IECC (for houses and low-rise multifamily dwellings) and ASHRAE 90.1-2019 (for high-rise multifamily buildings).
The Biden administration claims that the new rules won’t negatively affect housing affordability and availability. Although it acknowledges that there will be a “relatively modest” increase in the costs of building homes to the new standards, it claims that this will be more than offset by lower energy bills over the long term.
“After consideration of public comments, HUD and USDA determine that the 2021 IECC and ASHRAE 90.1-2019 will not negatively affect the affordability and availability of housing covered by [the Energy Independence and Security Act of 2007],” the notice reads.
The minimum energy standards update is a statutory requirement under the act.
However, the claimed lack of effect on housing affordability and availability is disputed by the National Association of Home Builders (NAHB) and its affiliate the Home Builders Association of Greater Kansas City (KCHBA).
The two associations say that the new rules raise the price of the average new home by more than $30,000, which will take more than 48 years to recoup through lower energy bills.
The NAHB argues that the “ill-conceived” policy will do little to reduce overall energy use while hurting the most vulnerable home buyers and renters, and exacerbating the housing affordability crisis.
“This senseless nationwide codes mandate will significantly raise housing costs—particularly in the price-sensitive entry-level market for starter homes and affordable rental properties—and limit access to mortgage financing while providing little benefit to new home buyers and renters,” NAHB Chairman Carl Harris said in a statement.
By Tom Ozimek
