NAHB Calls on Congress to Protect Energy Choice

The National Association of Home Builders (NAHB) today called on Congress to help ease the housing affordability crisis by supporting policies that preserve energy choice, ensure access to a full range of appliances and maintain flexibility in building energy codes that are critical to keep housing affordable and attainable for America's families.

Testifying before a House Energy and Commerce subcommittee, NAHB Chairman Buddy Hughes, a builder and developer from Lexington, N.C., told lawmakers that home builders nationwide are facing mounting obstacles that directly impact housing supply and affordability.

"Among the most pressing regulatory challenges are mandates on energy building codes, appliance standards and restrictions on fuel choice," said Hughes. "While often well-intentioned, these requirements add thousands of dollars to the cost of a home, limit consumer freedom, and take important design and lifestyle decisions out of the hands of American families."

According to the U.S. Energy Information Administration's Winter Heating Outlook, households using natural gas were projected to spend an average of $602 on heating last winter-about 42% less than the $1,037 forecast for households relying on electricity. Over the past decade, the low cost of American natural gas has saved residential customers an estimated $125 billion in home energy costs.

"NAHB strongly believes that increasing the supply of new single-family and multifamily housing is critical to addressing affordability, but policies that drive up costs and limit choice will only make the problem worse," said Hughes. "When mandates impose rigid energy codes or restrict appliance choice, they not only raise costs but also strip families of those options."

Hughes called on Congress to support and advance the Energy Choice Act, legislation that would prevent state and local governments from banning the use of natural gas energy in new homes. "Enacting this legislation will help protect housing affordability, strengthen energy reliability, and allow communities to pursue common-sense, cost-effective solutions that balance environmental goals with the economic realities of consumers," he said.

The recent federal push to require certain new homes to meet the overly stringent energy efficiency requirements of the 2021 International Energy Conservation Code (IECC) is equally problematic and will price many home buyers out of the market. According to Home Innovation Research Labs, compliance with the 2021 IECC-measured against the 2009 IECC baseline-adds between $9,600 and $21,400 to the price of a new home depending on the climate zone, though builders in practice have reported cost increases of over $31,000 per single-family home. To make matters worse, the payback period for these added investments can stretch as long as 90 years, leaving home owners to shoulder costs they will likely never recover.

Moreover, Section 50131 of the Inflation Reduction Act allocated $1 billion to incentivize state and local governments to adopt the 2021 IECC and ASHRAE Standard 90.1-2019, which would force them into a single, costly edition of the code.

"While framed as a tool to promote energy efficiency, in practice this program has become a rigid mandate that undermines housing affordability, consumer choice and the traditional authority of state and local governments in the code adoption process," Hughes said. "NAHB commends Rep. Craig Goldman (R-Texas) for championing the Homeowner Energy Freedom Act, legislation that would eliminate Section 50131."

Noting that modern construction practices and building codes have delivered significant improvements in reducing energy use in new homes, Hughes said that additional code requirements will be increasingly expensive while delivering only marginal savings. "Any policy that aims to make a significant difference on energy efficiency must focus on the existing housing stock, particularly older homes built before the introduction of modern energy codes," he said.

Roughly 90% of the nation's housing stock-130 million homes-were built before 2010. Given the scale of the nation's aging housing stock, improving the structure and infrastructure of older homes built before national model codes existed or built to codes that are now outdated represents far greater potential for meaningful energy savings than mandating ever-costlier requirements for new homes.

"NAHB stands ready to work with Congress to ensure that federal energy policy strengthens housing supply and preserves the ability of American families to achieve the dream of homeownership," said Hughes.