North Carolina faces a critical juncture in housing development, where recent federal rules propose a significant shift towards energy-efficient homes. Despite the state’s stagnant building codes, these federal regulations could influence the construction of thousands of energy-efficient starter homes annually. With the contention between state and federal guidelines, this new measure aims to enhance energy conservation without increasing housing costs significantly. The implications of this shift could reach beyond North Carolina, setting a precedent for other states to follow.
What is the Federal Rule?
Introduced earlier this year, the federal rule mandates homes financed by certain federally-backed mortgages to adhere to updated energy efficiency standards. This includes guidance on insulation and window quality, exceeding North Carolina’s existing 2009 standards. These changes aim to benefit lower-income and first-time homebuyers with reduced utility bills, despite a potential rise in initial housing costs. Lowell Ungar, from the American Council for an Energy-Efficient Economy, emphasized the importance of these requirements for protecting low-income buyers by reducing their energy expenses.
Why Are Local Improvements Resisted?
In North Carolina, the resistance from the powerful home construction lobby has been a significant barrier to updating energy-saving building codes. Despite attempts to align state codes with modern standards, legislative interventions, bolstered by developer interests, have maintained outdated practices. This situation has led to legislation that relaxes insulation requirements, raising concerns among safety experts and advocates. According to Drew Ball from the Natural Resources Defense Council, these legislative moves prioritize short-term profits over long-term savings for homeowners.
Energy efficiency in North Carolina’s housing has long been a contentious issue. Previous attempts to update the building codes to align with modern efficiency standards have been thwarted by legislative pushback. Historically, the state’s energy conservation efforts have faced opposition from the homebuilding industry, which holds significant sway over local policymakers. These challenges have kept North Carolina’s building codes behind the curve compared to other states, making the new federal rule an essential development in pushing for greater efficiency standards.
Beyond state-level policies, the federal government influences home construction through its loan guarantees. The Biden-Harris administration is actively pursuing energy-efficient standards as part of broader climate goals. A recent study by an independent government lab found that these updated standards could increase home costs slightly but provide immediate savings on utility bills. The federal rule impacts approximately 10% of new single-family home loans in North Carolina, with the potential to extend to other federal lending agencies, broadening its influence.
The role of large builders, particularly those operating in multiple states, is crucial in adopting these energy-efficient standards. Builders like Rob Howard, who focus on sustainable construction, advocate for reaching zero-energy standards in their projects. Howard notes that larger builders prefer uniformity in construction standards, which could lead to widespread adoption of the 2021 model code. This uniformity simplifies builders’ processes, potentially leading to a broader impact than initially anticipated.
Federal Housing Finance Agency’s adoption of these standards could further extend their reach, as Fannie Mae and Freddie Mac purchase a significant portion of U.S. mortgages. While some builders argue that these standards could impact affordability, supporters believe that the long-term savings outweigh initial costs. The discussion around extending these standards continues, with decision-makers weighing the benefits against potential economic challenges.
The new federal energy efficiency rule represents a pivotal moment for North Carolina and potentially other states lagging in building code updates. With federal backing, there is a strong push towards modernizing housing standards, despite local resistance. The outcome of these efforts could significantly impact future housing developments, balancing costs with long-term energy savings. As discussions progress, the rule’s implementation will be crucial in setting a national precedent for energy-efficient housing.
