The U.S. Department of Housing and Urban Development (HUD), Federal Housing Administration (FHA), and the U.S. Department of Agriculture (USDA) have recently announced a proposed leap in the energy code requirements for new construction of HUD- and USDA-financed housing. In the face of this proposal, the National Association of Home Builders (NAHB) has expressed serious concerns about the potential negative impacts on housing affordability.
The Proposal in Brief
Under current law, builders constructing new housing using HUD or USDA financing must conform to the 2009 edition of the International Energy Conservation Code (IECC) for single-family/low-rise buildings and the 2007 edition of ASHRAE 90.1 for multifamily buildings with four or more stories.
However, the proposal suggests adopting the 2021 IECC and ASHRAE 90.1-2019 codes, skipping several code iterations. The largest category of housing that will be affected by this proposal is FHA-insured homes, but the implications reach a variety of programs, including FHA-insured multifamily programs, the HOME Investment Partnerships Program, Housing Trust Fund program, Section 202 and 811 Supportive Housing competitive grants, Rental Assistance Demonstration (RAD) housing, Public Housing Capital Fund, Choice Neighborhoods, USDA Section 502 direct or guaranteed loans, and Section 523 grants.
The NAHB has raised concerns over the proposed changes, as they could add thousands of dollars to the cost of new single-family homes and apartment units. This concern is particularly pressing given that homes built under the 2015 or 2018 energy codes are already considered highly energy efficient. The NAHB fears that the energy savings from the new proposal may not be commensurate with the level of required upfront investment, which could exacerbate the affordability issue.
According to the NAHB, HUD should conduct a thorough review of the cost-effectiveness and feasibility of individual energy measures and code requirements, focusing on solutions that provide the maximum benefit to the consumer and expand the number of compliance options for building designers.
The NAHB’s main concern is that this leap in energy code requirements could potentially result in a decrease in housing affordability, particularly for low- and moderate-income families who are the primary recipients of HUD- and USDA-financed housing. Link to NAHB Article
Public Comment Period and Listening Sessions
HUD has opened a public comment period from May 18, 2023, to July 17, 2023, during which interested parties can submit comments. Additionally, HUD is organizing three live listening sessions in early June.
The NAHB encourages its members and other interested parties to voice their concerns during these sessions. This public comment period and the listening sessions offer a vital opportunity for stakeholders to engage in the decision-making process and share their concerns regarding the potential impact of these proposed changes on housing affordability.
As we await further developments, it is crucial for all stakeholders in the housing industry to remain actively engaged in this process. The NAHB continues to advocate for housing affordability and encourages its members and the public to join the conversation and ensure their concerns are heard.
HUD welcomes any public comments on the Notice during the public comment period, which is open from May 18, 2023 to July 17, 2023. Interested parties can submit comments through the Federal Register or during one of HUD’s three live listening sessions.
- Listening Session 1 – State, local, and tribal elected officials, local code officials and government representatives. Registration link (June 1, 3:00pm – 4:30pm ET): https://www.zoomgov.com/meeting/register/vJIsde6uqjsiHSSEhHXiobwB2HRPgeI1Rvo
- Listening Session 2 – General public. Registration link (June 6, 3:00pm – 4:30pm ET): https://www.zoomgov.com/meeting/register/vJIscemqqj4pHwNtCJ3rWt5tuNKuC_Cy6SM
- Listening Session 3 – Single family and multifamily financing and building industry representatives. Registration link (June 8, 3:00pm – 4:30pm ET): https://www.zoomgov.com/meeting/register/vJItc-uhpz8tE7CO2gZQSEcGSw6s_8xiils