Advocates and industry groups welcomed newly adopted energy codes today for federally supported homes across the country. The significant update from the U.S. Department of Housing and Urban Development (HUD) and Department of Agriculture (USDA) will reduce housing costs, default risks to lenders, and greenhouse gas emissions and other pollution.
By improving energy efficiency, the congressionally mandated requirements will save residents an estimated $15,071 for single-family homes and $5,886 per multifamily unit over 30 years, net of costs (compared to homes under existing U.S. requirements), the agencies said. Residents of single-family homes would save $963 every year on energy costs, on average.
Lowell Ungar, federal policy director of the American Council for an Energy-Efficient Economy, said: “This long-overdue action will protect homeowners and renters from high energy costs while making a real dent in climate pollution. It makes no sense for the government to help people move into new homes that waste energy and can be dangerous in extreme temperatures. Now the Federal Housing Finance Agency should do its part and direct Fannie Mae and Freddie Mac to adopt these codes for even more homes.”
Jessica Garcia, senior policy analyst for climate finance at Americans for Financial Reform Education Fund, said: “As the frequency of extreme temperatures increases due to climate change, so too will home energy costs. Implementing up-to-date energy codes will help ease the financial strain on homeowners and renters across the country as they fight to remain housed. We are encouraged by HUD’s decision, and urge the Federal Housing Finance Agency to follow suit and swiftly adopt the latest energy efficiency codes to decrease burdensome energy costs for future homeowners and renters, which in turn may help lower default risks and loan delinquency rates, and set forth a path to stabilize our shaky housing financial system.”
David Lipsetz, president and CEO of the Housing Assistance Council, said: “HUD and USDA are helping keep utilities costs lower for homeowners and renters. This is the right move at a time when housing costs are growing ever farther out of reach. We stand ready to work with the agencies to find ways to cover the upfront costs for the short time periods until they pay for themselves.”
Amy Boyce, senior director of building and energy performance at the Institute for Market Transformation, said: “Studies show that energy-efficient homes are not only more comfortable, affordable, and healthy, but that borrowers are more likely to repay mortgages on efficient homes, sparing themselves, lenders, and taxpayers the trauma of foreclosure. While first costs are often the focus of conversation, ongoing costs like energy bills, that are subject to wide fluctuations based on environmental and political factors, are directly related to a person being able to remain in their home. Energy-efficient new construction reduces the risk for homeowners, which is especially important for LMI populations, who are least able to withstand those risks.”
Alys Cohen, senior attorney at the National Consumer Law Center, said: “Making new homes more energy efficient will lower utility costs for homeowners and renters who too often struggle to pay their bills and will reduce the risk of foreclosure and eviction. We applaud HUD and USDA for updating their building codes and urge the Federal Housing Finance Agency to adopt the newer standards so affordable energy is available for the many families moving into homes financed through Fannie Mae and Freddie Mac.”
Debra Phillips, president and CEO of the National Electrical Manufacturers Association (NEMA), said: “As a leading standards development organization, NEMA has a lengthy history of leading on code adoption and energy efficiency in the building sector—and our members manufacture products that contribute to the construction of these safe, efficient, and resilient homes in communities across the United States. NEMA commends Acting HUD Secretary Todman and USDA Secretary Vilsack for their leadership on this final determination that will create cost savings, generate efficiency gains, and further reduce emissions from buildings, benefitting all Americans. This decision will lower the energy burden on low-income homes, reducing monthly utility bills in the process.”
Curt Rich, president and CEO of the North American Insulation Manufacturers Association (NAIMA) said: “Today’s announcement is a giant win for consumers. Homes built to modern energy codes mean lower monthly utility bills, improved comfort, and greater resilience during extreme weather events. The promise of an energy-efficient home becomes a guarantee under this new policy.”
Erin Sherman, senior associate for building regulations at RMI, said: “RMI celebrates the new rule, which will benefit roughly one in four new homes, ensuring countless more families receive the economic and resilience benefits of energy efficiency. We expect FHA- and USDA-supported mortgages and HUD-supported affordable housing embracing energy efficiency will have positive and direly needed ripple effects across the housing market by encouraging homebuilders to incorporate higher-efficiency materials and techniques into new homes.”
Ben Evans, federal legislative director at the U.S. Green Building Council, said: “This decision clears the way for billions of dollars in savings for the households that need it most, savings that will be delivered month after month, year after year, in the form of lower energy bills. Additionally, these homes will be more comfortable and more resilient in the face of increasingly severe weather. This is going to improve a lot of people’s lives, and the Biden administration, Sec. Todman, and Sec. Vilsack deserve credit for their leadership in making it happen.”
Background:
In bipartisan laws in 1992 and 2007, Congress directed HUD and USDA to periodically strengthen efficiency requirements for new houses and multifamily units that are purchased with federally backed loans such as Federal Housing Administration (FHA) and USDA mortgages, along with new homes with funding from other HUD programs. These new homes—about 180,000 annually—are primarily occupied by low- and moderate-income homeowners and renters.
The law directs HUD and USDA to update their requirements every three years. They match new model energy codes if they determine that doing so would not negatively affect the availability or affordability of covered housing. The code requirements adopted today are known as the 2021 International Energy Conservation Code (for houses and low-rise multifamily buildings) and ASHRAE Standard 90.1-2019 (for high-rise multifamily buildings). The Department of Veterans Affairs is required by law to update its loan requirements to match HUD and USDA.
Houses and multifamily buildings meeting the up-to-date codes generally have more insulation in the walls and roofs, better air sealing and windows, and more energy-efficient heating and cooling systems, including better-sealed ducts. Several requirements vary across the country to reflect differing climates.
The Federal Housing Finance Agency (FHFA) separately has the authority to require that new homes with mortgages purchased by Fannie Mae and Freddie Mac have such efficiency requirements. The Campaign for Lower Home Energy Costs and dozens of organizations have called on FHFA to act, and the agency has said it is exploring this option.
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Contacts:
ACEEE – Ben Somberg, bsomberg@aceee.org
AFREF – Carter Dougherty, carter@ourfinancialsecurity.org
HAC – Dan Stern, dan@ruralhome.org
IMT – Alexandra Laney, alexandra.laney@imt.org
NCLC – Stephen Rouzer, srouzer@nclc.org
NEMA – Michael Farnham, michael.farnham@nema.org
NAIMA – Patrick Kiker, pkiker@naima.org
RMI – Leah Komos, leah.komos@rmi.org
USGBC – Deisy Verdinez, dverdinez@usgbc.org
The American Council for an Energy-Efficient Economy (ACEEE), a nonprofit research organization, develops policies to reduce energy waste and combat climate change. Its independent analysis advances investments, programs, and behaviors that use energy more effectively and help build an equitable clean energy future.
Americans for Financial Reform Education Fund is a nonprofit organization which fights to eliminate inequity and systemic racism in the financial system in service of a just and sustainable economy. The organization was formed in the wake of the 2008 financial crisis, and works in coalitions alongside civil rights, consumer, labor, investor, environmental justice, and other groups.
The Housing Assistance Council (HAC) is a national nonprofit that supports affordable housing efforts throughout rural America. Since 1971, HAC has provided below-market financing for affordable housing and community development, technical assistance and training, research and information, and policy formulation to enable solutions for rural communities.
The Institute for Market Transformation (IMT) is a national 501(c)(3) nonprofit organization that envisions a world where buildings dramatically lower greenhouse gas emissions and support our physical, social, and economic well-being. We advance this vision through policies, programs, and business practices that scale better buildings in the United States.
Since 1969, the nonprofit National Consumer Law Center has worked for consumer justice and economic security for low-income and other disadvantaged people in the United States through its expertise in policy analysis and advocacy, publications, litigation, expert witness services, and training.
The National Electrical Manufacturers Association (NEMA) represents over 300 electrical equipment and medical imaging manufacturers that make safe, reliable, and efficient products and systems. Together, our industries are responsible for 1.65 million American jobs and contribute more than $200 billion to the U.S. economy.
NAIMA is the association for North American manufacturers of fiber glass, rock wool, and slag wool insulation products. Its role is to promote energy efficiency and environmental preservation through the use of fiber glass, rock wool, and slag wool insulation, and to encourage the safe production and use of these materials.
RMI is an independent nonprofit founded in 1982 that transforms global energy systems through market-driven solutions to align with a 1.5°C future and secure a clean, prosperous zero-carbon future for all. We work in the world’s most critical geographies and engage businesses, policymakers, communities, and NGOs to identify and scale energy system interventions that will cut greenhouse gas emissions at least 50% by 2030.
The U.S. Green Building Council (USGBC) is a nonprofit organization dedicated to transforming the way buildings and communities are designed, built and operated. For over 30 years, we have pursued this vision through our flagship program Leadership in Energy & Environmental Design (LEED) and through education, community, events and advocacy.
