Government Plan to Adopt Latest Energy Codes a Blow to Housing Affordability
In a move that will raise housing costs, the U.S. Department of Housing and Urban Development (HUD), the Federal Housing Administration (FHA) and the U.S. Department of Agriculture (USDA) are proposing to increase the stringency of energy codes for the new construction of HUD-insured and USDA-insured housing.
Under current law, builders constructing new single-family and multifamily housing using this government financing must conform to the 2009 edition of the International Energy Conservation Code for single-family/low-rise buildings and the 2007 edition of ASHRAE 90.1 for multifamily buildings with four or more stories.
The Biden administration is proposing that the new construction of homes under certain federally financed programs leapfrogs several code iterations and adopts the 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1-2019 codes.
The largest single category of new housing likely to be impacted by the proposal is FHA-insured homes. Additional programs impacted by this plan are FHA-insured multifamily programs; the HOME Investment Partnerships Program and 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.