The recent federal push to require certain new homes to meet the stringent energy efficiency requirements of the 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1-2019 will price many would-be home buyers and renters out of the market, forcing them to stay in older, less efficient homes, the National Association of Home Builders (NAHB) told Congress today.
Testifying on behalf of NAHB before a House energy subcommittee, Shawn Woods, a home builder from Blue Springs, Mo., criticized the implementation of a restrictive national energy code without considering local conditions. "Without adequate review or consideration of how it will affect home buyers or renters, HUD and USDA have rammed through a mandate that will require new single-family construction financed through both agencies to be built to the 2021 IECC," said Woods. "This mandate will do little to curb overall energy use but will exacerbate the housing affordability crisis and hurt the nation’s most vulnerable house hunters."
Studies indicate that building to the 2021 IECC can add as much as $31,000 to the price of a new home and that it could take up to 90 years for a home buyer to realize payback on this added upfront cost. “At a time when a lack of attainable, affordable housing in the single-family and multifamily markets is the main factor driving the housing affordability crisis, the government should be supporting sensible policies to facilitate homeownership and increase the supply of quality rental housing,” Woods added.
Woods emphasized that this mandate not only prohibits jurisdictions from amending energy codes for local conditions but also creates confusion leading to longer permitting and construction times with lower housing production. “HUD and USDA are supposed to help the most vulnerable home buyers and renters – not price them out of the housing market,” said Woods. “This 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.”
Federal Housing Finance Agency Director Sandra Thompson has confirmed her agency is considering applying similar standards adopted by HUD and USDA for new homes financed by Fannie Mae and Freddie Mac. “Fannie Mae and Freddie Mac provide 72% of financing for new home purchases,” said Woods. “If Fannie and Freddie were forced to comply with this mandate, it would become a de facto national standard detrimental to housing affordability.”
Woods also noted that policymakers largely ignore existing housing stock—130 million homes out of 137 million were built before modern building codes took effect in 2010. "Older homes are less energy efficient than new ones; they were not built to stringent modern codes," he stated.
According to data from the National Renewable Energy Laboratory, upgrades could reduce total annual U.S. electricity consumption by an estimated 5.7% by 2030. “Mandating these codes will act as a drag on housing production with domino effects across other sectors: fewer jobs, higher costs, fewer options, lower tax revenue.”
