The Biden administration is racing to finalize regulations to curb planet-heating emissions from lightbulbs, automobiles and trucks before a key deadline, after which any new rules could be undone by Donald Trump if he retakes the White House.
With just over six months before the election, at least one major Biden proposal appears to be stalled: an update to the federal housing rules that agency experts estimate would save homeowners nearly three times more money on energy bills than it would add to construction costs, spread out over a 30-year mortgage.
Changing those housing rules would impact about 160,000 new houses and condos built each year in some of the nation’s fastest-growing — and most expensive — housing markets. The Biden administration is now looking to the rules as a model for reforming other federal housing programs, which would supercharge the White House’s efforts to curb both emissions and rising utility bills.
But the final rule is inching through the bureaucratic process at an unusually slow rate, taking weeks or months to advance to technical next steps that regulations can typically reach in a matter of days. It’s unclear what’s causing the delay. And due to a legal quirk, if President Joe Biden loses reelection, Trump could have final say over any rule enacted after May or June.
Critics of the greener housing rules say the changes would raise the price of new homes when half of Americans already say they can’t find affordable housing, home ownership rates are stagnating and the bulk of inflation stems from the climbing cost of shelter. Republicans tried to block the rule from taking effect last year.
Requiring new homes to meet stricter energy efficiency standards to qualify for federally-insured loans would add a combined $560 million in building costs, based on a single-year average of construction prices between 2019 and 2021, the Department of Housing and Urban Development found in its preliminary determination last year.
But over the same period a buyer would pay off a house, the thicker insulation and modern windows mandated under the latest model building codes would save the country as much $1.5 billion in energy costs. Some markets could see new homes that save 24% more energy than models built to the previous year’s standards. The 90-page “national blueprint” for decarbonizing the building sector the Energy Department published this month calls HUD and other federal lending agencies to swiftly adopt the latest codes.
A spokesperson for HUD declined to comment on what’s causing the delay.
“HUD is in the process of finalizing the determination, recognizing the interest in doing so as promptly as possible,” the spokesperson told HuffPost in an emailed statement Friday.
The U.S. has no official nationwide building code. Instead, states can choose to adopt model standards written and regularly updated by private code-writing organizations such as the International Code Council, a nonprofit that convenes local governments, utilities and construction industry professionals. Compared to previous rounds of codes, the ICC’s 2021 homebuilding guidelines delivered double-digit improvements on the energy efficiency of new homes.
Yet few states have voluntarily taken up those new, greener benchmarks.
Nearly half the country — most of the Southeast, Midwest and Mountain West — uses the ICC’s energy standards from at least 15 years ago. Eight states — Alaska, Colorado, Kansas, Mississippi, Missouri, North Dakota, South Dakota and Wyoming — have no statewide building codes at all, instead allowing counties and towns to decide for themselves how to impose standards on builderss. Just six states – California, Connecticut, Illinois, New Jersey, Vermont, and Washington – have adopted the standards in line with the latest ICC housing codes, according to Energy Department data updated a week ago.
That number could soon grow. Congress granted Biden $1 billion to give out to states to help them adopt newer and stricter codes. And the U.S.′ Balkanized housing code system is one reason why stricter federal standards for housing loans are critical for cutting back on emissions. Even though the U.S. can’t force states or cities to adopt the latest ICC code, home loans give the federal government another lever to nudge states toward cleaner buildings.
“This has been long overdue,” said Lowell Ungar, the director of federal policy at the watchdog American Council for an Energy-Efficient Economy. “Each month of delay means thousands more homes with poor insulation, leaving residents with high energy bills for decades. Getting this done will lower families’ overall housing costs.”
The National Association of Home Builders, the largest trade group representing construction companies and real estate developers, told HuffPost that “mandating” the use of the 2021 building codes “is certainly not the answer.”
“This move will significantly limit access to federally-backed financing options for many first-time home buyers, rural home buyers, other home buyers with limited financial resources, and also developers of affordable apartments,” the NAHB warned. “In short, this blatant federal overreach is a counterproductive, short-sighted strategy that will exacerbate the nation’s housing affordability crisis and hurt the nation’s most vulnerable house hunters and renters.”
The American Gas Association, which successfully struck key climate provisions from the energy codes due out in 2024, said federal housing regulators should reject the 2021 codes. In an emailed statement, the gas-utility lobby criticized an Energy Department analysis showing that the most recent codes cut back on wasted energy, citing an industry study.
“HUD and USDA should not accept the revised code or standard provisions that negatively affect the availability or affordability of new construction of single and multifamily housing,” the AGA told HuffPost.
Federal law requires regulatory agencies to routinely ramp up the criteria for housing loans as more efficient codes come out. Yet the only time the codes for federal housing were updated was in 2015, when the Obama administration required that new homes meet the ICC’s 2009 codes. The Trump administration briefly gutted the guidelines for adopting new codes, a move Biden promptly reversed.
By the time Biden took office, building codes had quietly become a new battleground in the fight to transition to cleaner energy.
One benefit of greener homes is that they leave homeowners less vulnerable to energy price swings from war or extreme weather disrupting supplies.
“The most predictable and common cause of people leaving their homes is the energy burden and cost that can go up in such an unpredictable manner based on geopolitics or weather,” said Amy Boyce, senior director of buildings and energy at the Institute for Market Transformation, a think tank focused on decarbonizing buildings.
Utility debt swelled to a record of over $20 billion last year as ratepayers struggled to catch up on electricity and heating bills in arrears. One survey found nearly one-third of Americans in October said they had cut back on or skipped necessary expenses in the past year to cover energy bills. Now states across the country are allowing utilities to jack up rates to help pay for modernizing the grid.
“It’s so dangerous to say, ‘OK, we’re worried about this one aspect of cost, but we’re just going to leave that much more unpredictable aspect for people to figure out later on their own,’” Boyce said.
In the wake of the United Nations’ dire 2018 climate science report, cities and towns across the U.S. enacted laws mandating emissions cuts. But they could only do so much: Local governments have little control over the power plants and automobiles that produce the bulk of carbon pollution. They do, however, control what kinds of houses, offices and storefronts go up.
The ICC, which was formed in the 1990s as the U.S. sought to consolidate disparate code-writing organizations, provided an opportunity for local leaders to influence how houses are built in the whole country. While industry representatives could weigh in on updates to the ICC’s codebook, only officials from elected governments could vote on the final product.
For years, the ICC codes became only barely more energy-efficient with each update. But the ICC codes governments voted to enact in 2021 saw gains of as much as 14%.
Environmentalists, architects and green builders hailed the new codes. Industry groups balked. Trade associations representing gas utilities lobbied the ICC to strip key climate-friendly provisions, like rules that would require new homes to include the circuitry for electric appliances, car chargers and solar panels.
After the backlash, the ICC eliminated governments’ right to vote on codes altogether, moving instead to a “consensus” committee system that granted builders and fossil fuel companies more influence over the process. The Biden administration warned that those changes harmed the ICC code-writing process’s democratic legitimacy.
Promising to enshrine the wins of the latest code, Kevin Bush, HUD’s deputy assistant secretary for grant programs, told advocates in a July 2021 letter that the agency expected to take the first major step toward enshrining the newest codes into regulations “later this year.”
HUD did not submit its draft to the White House’s Office of Management and Budget until August 2022. It took OMB eight months to complete its review of the determination — a process that appeared to have ended only hours after HuffPost contacted the agency about the stalled regulation in March 2023.
The proposal to update the housing loan standards then went to the White House’s Office of Information and Regulatory Affairs. The OIRA completed its review and sent the regulation back to HUD last month.
At other agencies, such as the Energy Department, finalized regulations typically appear on the Federal Register — the crucial last step before a regulation goes into force — within days of returning to the regulators from OIRA review.
After nearly four weeks, HUD has yet to publish its final rule on the Federal Register.
There’s no obvious reason for the rule to be stalled. While the final draft is not out, the language on the OIRA’s website indicated that the agency returned the proposal to HUD without any major changes. Some advocates privately speculated that HUD could be facing internal upheaval since HUD Secretary Marcia Fudge stepped down and retired last month, leaving her temporary replacement in charge.
Unlike mortgages backed by HUD or the Agriculture Department, loans issued under the Federal Housing Finance Agency don’t require homes to follow any specific energy codes, nor do the mortgages purchased by the federally related Fannie Mae and Freddie Mac lenders. An activist campaign launched in November is calling for those agencies to implement similar standards to those HUD uses. The administration told E&E News it would consider the move in December.
“If HUD doesn’t move forward, that [effort] faces an almost insurmountable hurdle,” Boyce said.
The clock is ticking. Under a little-known statute called the Congressional Review Act, lawmakers can undo federal rules up to 60 days after they’re put in place. House Republicans have already repeatedly held votes against the Biden administration’s proposed regulations. But these have so far amounted to nothing but symbolism, since Democrats still control the Senate, and Biden would almost certainly veto any legislation passed in protest of his climate agenda.
Still, since the 60 working days covered by the law aren’t necessarily consecutive, the period always stretches out over more than two months and could eclipse the end of Biden’s first term in office. If Trump wins the presidency and Republicans win the Senate and keep the House, Biden-era climate rules would likely be rolled back.
Legal experts disagree on when the CRA deadline will actually land. Based on the House of Representatives’ calendar, the law firm Hunton Andrews Kurth estimated it will be on May 22, while based on the Senate calendar, the deadline would be June 7, according to the law firm Venable.
The ICC is due out with its 2024 codes in the next few weeks. It had looked poised to put out landmark climate provisions designed to make going electric easier and cheaper for homeowners. Up to 90% of experts involved in writing the code supported the green measures. But gas companies once again appealed. At the last minute, the ICC’s board intervened last month, and granted all the fossil fuel firms’ requests.
Support HuffPost
Already contributed? Log in to hide these messages.
Berkeley, California, has agreed to repeal its pioneering ban on natural gas hookups in new homes, a move that casts doubt on similar bans across the country.
Brad Plumer reports for The New York Times.
In short:
- Berkeley’s decision came after a legal challenge by the California Restaurant Association and a ruling by the Ninth Circuit Court of Appeals.
- The repeal raises questions about the future of over 140 similar ordinances nationwide, aimed at combating climate change.
- Other cities may still pursue climate goals through building efficiency standards and alternative strategies to natural gas.
Key quote:
“To comply with the Ninth Circuit’s ruling, we have ceased enforcement of the gas ban. Berkeley will continue to be a leader on climate action.”
— Farimah Brown, city attorney for Berkeley
Why this matters:
Despite this setback, options remain for local governments to encourage building electrification through building codes, air emissions standards, and regulation of natural gas distribution, provided these measures align with EPCA stipulations and other federal laws.
In 2021, EHN’s Kristina Marusic presented evidence that natural gas production can be linked to lower birth weights in a national study.
In the wake of the Inflation Reduction Act, a new analysis reveals a significant private sector response, multiplying government investments in clean energy nearly fivefold.
Syris Valentine reports for Grist.
In short:
- The private sector’s contribution of $5.47 for every government dollar has led to a surge in clean energy investment.
- Federal tax credits primarily fuel the $34 billion in government spending, with overall investments spanning various technologies.
- Despite substantial investment growth, experts caution that current levels may not suffice to meet the U.S.’s ambitious climate goals.
Key quote:
“It’s proving the value of the federal government taking the lead, putting in place policy that says, ‘This is the direction that we’re headed: supporting decarbonization, supporting clean energy.’”
— Hannah Hess, associate director of climate and energy at Rhodium Group
Why this matters:
The Inflation Reduction Act has catalyzed unprecedented investment in clean energy, underlining the federal government’s pivotal role in steering economic transitions toward sustainability. This movement signals a robust push towards decarbonization and energy innovation, crucial for meeting national and global climate targets.
After passage of the Inflation Reduction Act, those in the trenches working on climate mitigation, climate solutions, clean energy and climate justice began to feel optimistic about their goals.
Global prices of gas and liquefied natural gas (LNG) are expected to remain relatively weak in 2024, with demand subdued due to high storage levels in Europe and Asia and a mild Northern Hemisphere winter, consultancy Wood Mackenzie said on Wednesday.
“Wood Mackenzie has been forecasting lower 2024 prices for much of last year, especially compared to forward curves, amid weak market fundamental expectations,” Massimo Di Odoardo, Vice President of Gas Research at Wood Mackenzie, said.
“Global LNG supply growth will remain limited at 14 million tonnes (Mt), but with Asian LNG demand still weak, competition for LNG is unlikely to heat up,” he added.
LNG prices dropped 58 per cent in 2023 to levels slightly below $12 per million British thermal units (mmBtu) and fell further in the first two weeks of January to $10.025 on Wednesday, their lowest level since June 2023.
In Europe, gas prices have fallen 45 per cent to $10/mmBtu in the past three months, the report said, expecting market sentiment for gas and LNG to remain bearish into 2024.
Gas demand in Europe fell by 7 per cent in 2023 as mild weather reduced consumption, the report said.
“Normal weather dynamics and a possible economic rebound would support demand, however with renewable supply increasing by more than 100 terra watt hours and nuclear production in France continuing to come back, European gas demand will remain flat at best.”
In Asia, demand this year is expected to grow by 12.5 million metric tons, or 5 per cent from 2023, but remains 3 million tons lower than its 2021 levels.
On LNG contracting, Di Odoardo said overall activity is expected to soften in 2024 compared to a huge numbers of deals signed in 2021 to 2023.
Key LNG portfolio players are expected to be more selective this year, after signing 72 million tons per annum (mmtpa) in contracts in 2022 and 2023, the report said.
“However, some buyers might take a more opportunistic approach, with U.S. independent players leveraging on low Henry Hub prices to seek more exposure to global LNG prices by taking long-term LNG capacity positions, or more activity emerging in price sensitive Asian markets if contract prices fall further,” the report said.
The United States supplies buyers in both Europe and Asia, but is increasingly focused on Europe, especially with the loss of much of the continent’s supply of Russian pipeline gas following Moscow’s invasion of Ukraine two years ago.