The Biden administration is spending hundreds of millions of dollars to push states and cities to adopt climate-focused building codes, a move that experts say will raise sky-high housing prices even further.
President Joe Biden's Energy Department on Tuesday announced a $400 million program aimed at incentivizing state and local governments to implement building codes that "lower greenhouse gas emissions" and fight the "climate crisis." Of the $400 million, $240 million will go to governments that implement one "energy conservation code" unveiled in 2021—complying with that code can add as much as $31,000 to the price of a new home, according to a National Association of Home Builders analysis. Biden's Energy Department is also providing $160 million to governments that implement "zero energy" building codes, which require residential buildings to install "enough renewable energy to achieve zero-net carbon."
The spending comes as American families struggle to afford a home—the median U.S. home price rose to nearly $414,000 in July, the second highest ever. It also marks the latest example of the Biden administration's efforts to use regulations to advance the president's climate change goals, often at the expense of consumer choice. In addition to its building code spending, Biden's Energy Department has unveiled environmental regulations targeting gas stoves, washing machines, refrigerators, and lightbulbs. Those actions, the department says, "support President Biden's ambitious clean energy agenda to combat the climate crisis."
For the National Association of Home Builders, the Biden administration's "restrictive" building code push is unnecessary, given that new buildings "are already highly energy efficient." It's also expensive, the association argued earlier this year. "Newer versions of energy codes add costs to housing production that are not paid back in efficiency gains, further exacerbating the housing affordability crisis," the association said.
Manhattan Institute policy analyst Jordan McGillis echoed the association's concerns, telling the Washington Free Beacon that Biden's green building code program will "obviously" increase housing costs. McGillis also questioned the policy's climate gains, noting that in New York City, residents have moved to New Jersey and elsewhere to evade higher housing costs, only to "inadvertently emit more on bigger homes and longer commutes."
The Energy Department nonetheless contended in its Tuesday announcement that its green building code program will save consumers billions, given that more efficient buildings cost "dramatically" less to heat and power. The National Association of Home Builders, however, found that the increased costs associated with the Biden administration's preferred "energy conservation code" take homeowners "as long as 90 years" to recoup through lower energy bills. As a result, the association is urging its members to advise their state local officials that a building code update "will result in higher construction costs and higher home prices."
An Energy Department spokeswoman told the Free Beacon the National Association of Home Builders' analysis "is not consistent" with the department's estimates. The spokeswoman acknowledged that green building codes lead to an "increase in purchase price" when constructing a home but argued that the energy savings associated with those codes nullify the higher price "in approximately 4 years."
The Energy Department's $400 million program stems from funding allocated in the Inflation Reduction Act, Biden's flagship climate legislation that provides at least $1.2 trillion in green energy subsidies. That legislation set aside more than $1 billion to push the adoption of new green building standards, meaning the Energy Department is expected to announce additional funding to push state and local governments to implement those standards.
Should states and cities take advantage of the Biden administration's green building code funding, the money could spur the eventual phase out of natural gas in new buildings, a transition that is already taking place in California and other liberal states. States and cities could, for example, use money from the green building code program to adopt decarbonization measures floated by the Natural Resources Defense Council and other environmental groups. The council's building code, which the group proposed last year, calls on developers to ensure new buildings "support converting from fossil fuels to electric equipment in the future."