The National Association of Home Builders (NAHB), in collaboration with a coalition of 15 states, has initiated a lawsuit against the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) to challenge the proposed implementation of new energy efficiency standards. These standards pertain to the adoption of the 2021 International Energy Conservation Code (IECC) and the 2019 benchmarks established by the American Society of Heating, Refrigerating, and Air-Conditioning Engineers (ASHRAE).
A coalition of states, including Alabama, Arkansas, Idaho, Indiana, Iowa, Kansas, Louisiana, Missouri, Montana, Nebraska, South Carolina, Tennessee, Texas, Utah, and West Virginia, is involved in this legal action. The lawsuit argues that the proposed rules, which pertain to specific categories of new homes such as single-family and multiple units, would impose significant financial burdens on homebuilders. Consequently, this would also impact prospective homeowners and renters.
Advocates argue that the new criteria will reduce greenhouse gas emissions, greatly reduce national energy consumption, and result in an average yearly energy cost savings of $2,300 for homes. However, opponents led by the NAHB assert that the requirements will have the opposite effect on the housing market. According to Carl Harris, chairman of the NAHB, the expected operational expenses for builders will increase by an additional $31,000, potentially raising the average price of new homes by over $22,000 due to compliance costs associated with the 2021 IECC.
According to a statement by Harris, the National Association of Home Builders (NAHB) is the sole private entity involved in the lawsuit aimed at preventing HUD and USDA from implementing the 2021 IECC. Harris points out that homebuilders have evidence to support their claim that this regulation will result in unnecessary increases in housing costs, negatively impacting the most vulnerable home buyers and renters. He argues that this policy will discourage new construction at a time when the country urgently needs to increase its housing supply in order to reduce the costs of shelter inflation.
The image is courtesy of the National Association of Home Builders (NAHB).
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The lawsuit raises concerns about constitutional matters, suggesting that the authorization granted to HUD and the USDA to provide mortgage insurance exclusively for homes that meet the new criteria may potentially violate constitutional principles. Harris asserts that the lawsuit seeks to demonstrate that the approval given to HUD and USDA to guarantee mortgages for newly built single-family homes and apartments, contingent upon meeting the new requirements, was obtained unlawfully.
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