Arkansas – Challenging the proposed implementation of new energy efficiency standards, the National Association of Home Builders (NAHB) along with a coalition of 15 states has started a lawsuit against the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA). These standards involve the adoption of the 2021 International Energy Conservation Code (IECC) and the 2019 benchmarks set by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE).
Included among the states engaged in this legal action are Alabama, Arkansas, Idaho, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, South Carolina, Tennessee, Texas, Utah, and West Virginia. According to the lawsuit, the proposed rules—which would apply to certain types of new residences, including single-family and multiple units—would cause major financial strains on homebuilders and, hence, on possible homeowners and renters.
Advocates of the new criteria contend that they will lower greenhouse gas emissions, significantly save national energy consumption, and cause homes to average $2,300 in yearly energy cost savings. Opponents, headed by the NAHB, claim, however, that the requirements will have the reverse impact on the housing market. With expected operational expenses for builders rising by an extra $31,000, Carl Harris, chairman of the NAHB, claims that the compliance costs linked with the 2021 IECC could raise the average price of new homes by more than $22,000.
“NAHB is the only private entity in this lawsuit seeking to halt HUD and USDA from adopting the 2021 IECC because homebuilders can document how this egregious regulation will needlessly raise housing costs and hurt the nation’s most vulnerable home buyers and renters,” Harris said in a statement. “This ill-conceived policy will act as a deterrent to new construction at a time when the nation desperately needs to boost its housing supply to lower shelter inflation costs.”
Courtesy of the National Association of Home Builders (NAHB)
The lawsuit also addresses constitutional issues, implying that the way HUD and the USDA have been given permission to insure mortgages just for residences that satisfy these new criteria could violate constitutional rules. Harris claims that the case aims to prove that allowing HUD and USDA permission to guarantee mortgages for new single-family homes as well as apartments only if they are constructed to the new requirements was done in an illegal manner.
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Courtesy of the National Association of Home Builders (NAHB)
Particularly with regard to affordability and supply, this legal challenge represents a major stand-off between federal regulatory agencies striving to advance energy efficiency and industry stakeholders who fear that such policies may cause disturbance of economic stability in the housing market. As the issue develops, it will surely draw interest from many spheres related to housing affordability, regulatory governance, and energy policy.
