New Energy Codes Mandate a Blow to Housing Affordability
The U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) have jointly announced a final decision that mandates all new single-family construction housing financed by HUD and USDA to adhere to the 2021 International Energy Conservation Code (IECC). Additionally, HUD-financed multifamily housing must comply with either the 2021 IECC or ASHRAE 90.1-2019 standards. This decision is anticipated to restrict new construction and potentially impact housing affordability across the nation.
According to the NAHB, without adequate review and consideration of how it will affect home buyers or renters, HUD and USDA have rammed through a mandate that will do little to curb overall energy use but will exacerbate the housing affordability crisis and hurt the nation’s most vulnerable house hunters and renters. Studies have shown that building to the 2021 IECC can add up to $31,000 to the price of a new home and take up to 90 years for a home buyer to realize a payback on the added cost of the home. This unreasonable trade-off for a new home buyer will do little to offer meaningful energy savings for residential homes and apartments and in fact, will make older, less efficient homes more attractive.
“The Biden-Harris administration has set a goal of building an additional 2 million homes and this new policy runs completely counter to that objective,” said NAHB Chairman Carl Harris. “HUD and USDA are supposed to help the most vulnerable home buyers and renters — not price them out of the housing market. 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.”