Why industry is blocking the push for more energy efficient homes

“All that energy code was going to do in my price range is make it to where the working man and woman would not be able to buy a home,” Jackson said. He sells homes in the $250,000 range and estimated the changes would have increased his costs by more than $20,000 — a figure that comes from a survey of North Carolina builders conducted by the state branch of the National Association of Home Builders, the housing industry’s largest lobbying group.

Across the country, the home-builder lobby is mobilizing its 140,000 members against state and local efforts to save energy and ease the transition to cleaner technologies, such as wiring homes to support electric car charging. Since poorly designed and insulated buildings tend to leak and waste energy — one reason homes account for nearly one-fifth of U.S. greenhouse gas emissions — climate advocates say the home builders’ repeated victories will have a lasting impact, locking in practices that could hurt consumers and the planet for decades.

There’s no debate that boosting the energy efficiency of new homes often increases upfront costs, but the builders appear to be inflating the numbers. A federal study found that North Carolina’s proposed code update would have added at most about $6,500 to the price of a newly built home, not $20,400. According to the analysis, these changes would have paid for themselves through lower power bills and, during the first year alone, reduced carbon dioxide emissions by the equivalent of taking 29,000 cars off the road.

Some green builders — including members of the North Carolina Home Builders Association — are frustrated by the industry’s tactics.

In the town of Granite Falls, N.C., Rob Howard is building ultraefficient yet affordable cottages. Each is priced between $200,000 and $300,000 and designed to be “zero-energy ready,” meaning the addition of solar panels or other renewable energy would offset all or most of its energy use. Such features add at most $6,000 to the price of a home, he said, and have allowed him to market houses to prospective buyers eager to save on their power bills.

“We’ve done a lot in this state to educate both builders and inspectors about what it takes to build a more efficient home. The notion that building this way is too expensive or too complicated … I just don’t buy any of that,” Howard said. “Let’s set a high standard for ourselves.”

Wiring and insulation might seem like unusual political flash points, but they are at the center of the home builders’ effort to push state legislatures to block changes to building codes. In the United States, states and cities adopt their own building codes, but they often do so based on recommended standards updated every three years by a Washington-based nonprofit called the International Code Council.

In 2021, the council came out with a new code that rocked the home builders. It called for the efficiency of new residential buildings to increase by almost 10 percent, a big jump after the past two code cycles led to estimated savings of barely more than 1 percent.

The industry and its allies used their influence to kill some of the more aggressive measures that climate advocates had pushed for, including a requirement that new homes be built with wiring that makes it easier to install electric vehicle chargers. Yet the resulting code was still the most climate-friendly in years: If fully implemented, the standard was expected to cut new homes’ carbon emissions by nearly 9 percent, according to a federal analysis.

That’s when the home builder-lobby sprang into action across the country.

In North Carolina, the Republican-controlled legislature passed a law last year freezing residential building standards — making it illegal to update them until 2031 — after the state’s building council recommended an updated code. Emails obtained by North Carolina Public Radio show that the North Carolina Home Builders Association not only supported the legislation but also that its lobbyists helped write it.

This year, the home-building industry in Michigan has come out against the state’s plan to adopt the latest energy code. The industry is rallying its members to pressure Gov. Gretchen Whitmer (D) to abandon her administration’s proposal, repeating its claim it would increase new homes’ cost by an average of $20,000.

“TAKE ACTION,” says an advocacy alert on the Home Builders Association of Michigan website. “Your support is crucial in amplifying our opposition.”

To rally opposition to efficiency measures, the national trade group has funded studies and awareness campaigns. It has allied itself with pro-natural gas groups and heating and cooling equipment manufacturers, which have fought requirements that make it easier for homeowners to switch to heat pumps and other electric appliances — an effort that is underway again this year. And it has long wielded considerable clout over state legislatures through political contributions and relationships with part-time lawmakers who work in the building trades.

In Colorado, the housing industry is backing a bill that could make it harder to adopt the latest standards or decarbonize buildings. The bill mandates that any code changes pay for themselves within 10 years.

“It’s an ongoing campaign,” said Christine Brinker, senior buildings policy manager for the Southwest Energy Efficiency Project, an environmental group. “When things don’t go their way at the national level, then they turn to the state and local level. And when things don’t go their way there, they change the rules.”

Liz Thompson, a National Association of Home Builders spokesperson, said the code council’s recommended changes were flawed — the result of a process “without the benefit of adequate discussion, detailed analysis, or review of technical data and cost information.”

“These measures provide little benefit to the consumer but come at significant cost and increase the price of homes,” she added.

Tim Minton, executive vice president of the North Carolina Home Builders Association, also cited spiraling home prices in his group’s push to freeze residential energy standards. “I’m not going to get into a debate about climate change, what I’m going to get into a debate about is affordability,” he said in an interview.

Energy efficiency advocates say affordability is a convenient talking point for the home builders. They say the industry is mainly concerned with its profit margins, as well as the hassle of taking time to bring its employees up to speed on new requirements.

These laws “are positioning people to have a costly future in the homes they’re buying,” said Mike Waite, codes director for the American Council for an Energy-Efficient Economy. The industry’s lobbying comes as more Americans are buying heat pumps, and a record 1.2 million car buyers purchased electric vehicles last year — items that need higher voltage outlets. When builders install the appropriate wiring while a home is being built, homeowners can more easily switch to all-electric appliances and electric cars in the future.

“It’s not as though this is a democratic response to the energy code going too far,” Waite said, “it’s particular interests that don’t want to see their profits cut into.”

Supporters of stronger efficiency measures, such as thicker insulation, better windows and tighter air sealing, say they pay for themselves through lower heating and cooling bills. A federal analysis of the 2021 code found that while the payback period varies in different parts of the country, on average, homeowners would recoup their costs in 10½ years.

In Granite Falls, N.C., Howard said he is trying to appeal to home buyers seeking both an affordable home and one that is cost-efficient over the long run.

“We do need to wrestle with the issue of cost, but it strikes me funny that we’re measuring improvements to houses by this simple payback calculation,” he said. “Nobody is asking you what the payback is on your fancy cabinets or flooring. But energy efficiency always comes down to that debate.”

Last year, Howard supported the state’s attempt to modernize its energy code and was disappointed when it failed. He sits on the state’s Building Code Council, whose members are appointed by the governor and have historically been empowered to revise the building code. But the law backed by the home builders stripped the council of this authority, giving it to a new entity over which the governor, a Democrat, will have less control.

In Michigan, the fight over the state’s energy code has officials feeling pressure from both the home builders and the Biden administration.

When it appeared last year the state was preparing to adopt a weakened version of the 2021 code, the Energy Department told state officials that they risked leaving homeowners with higher utility bills and making the state ineligible for federal funding from the Inflation Reduction Act and other programs.

Michigan officials then agreed to restore some of the efficiency requirements, but only the bare minimum required. Although the state is home to the largest American automakers building electric vehicles, it is not considering measures that would benefit EV manufacturers and buyers, such as mandating new homes be “EV-ready.”

The home builders’ effectiveness at stopping code changes has left some states with standards that are 15 years old. While parts of the Northeast, California and Illinois have strong building codes, there is less new construction in these states. The Biden administration has tried to entice others to bring their standards up to date by dangling millions of dollars in funding.

Cherylyn Kelley, building energy codes and policy manager for the nonprofit Institute for Market Transformation, said the money has increased states’ interest in adopting the latest standard, as is the case in Michigan. It may also prompt some cities and states to close loopholes in their codes that have made them weaker in practice than they appear, she said.

Yet advocates for tougher building codes said they are also seeing more states pass preemption laws, often at the urging of the home builders. Many of these laws bar cities and counties from restricting the use of gas-burning appliances in homes, while others prevent them from enacting stronger codes than those adopted at the state level.

In Alabama, the home builders successfully pushed for a new law last year that prevents cities and counties from requiring that developers install items that the home buyer might not use when the house is finished, like circuitry for electric vehicle chargers or framing to support solar panels.

The builders have also supported preemption laws in Idaho, including one last year blocking cities like Boise from adopting energy codes more stringent than the state’s older, less efficient standards.

“The number of state preemption bills seeking to limit energy codes is increasing every year,” said Jennifer Gunby, who oversees the U.S. Green Building Council’s state and local advocacy.

Like climate change, debate over the latest energy code is sometimes becoming politicized by legislators trying to stand out in an election year, she said. “Every bill that wasn’t successful last year, we expect to be introduced again.”