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Get Your HUD in the Game: Updating Household Energy Efficiency Standards Is a Powerful Climate Tool

The Department of Housing and Urban Development (HUD) is dragging its feet on a regulatory tool that can drastically cut carbon pollution for one-fifth of all new houses. Here’s what needs to happen next.

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Climate & Environmental Justice Executive Branch
© Berkeley Lab/Flickr CC BY-NC-ND 2.0

 

UPDATE: The Department of Housing and Urban Development released the draft determination to update federal building codes on May 18th, 2023. The determination will allow HUD and its partner agencies to apply the most recent efficiency standards to federally-supported housing.

Public comment is open until July 17. Submit a formal comment on the Federal Register and voice your support today.

 

Buildings are a key part of our clean energy transition. They are the places we live, where we work, where we socialize, and where we rest—and they are also to blame for one-third of global greenhouse gas pollution, using a whopping 40 percent of our global energy. Here in the U.S., buildings are one of the most polluting sectors of our economy—with combustion from fossil fuels for heating, cooking, and electricity contributing large volumes of the pollution that’s warming our planet and poisoning our health. 

Fortunately, the Department of Housing and Urban Development (HUD) has a little-known regulatory tool that could set energy codes for one-fifth of all new houses—slashing carbon pollution, saving households thousands of dollars in energy costs, and improving public health.

This is not a trivial number of buildings: federal loans help finance about one-fifth of all new single-family homes purchased every month and one-eighth of new units in multifamily buildings—meaning a small change to the efficiency criteria translates into a massive cumulative impact on 20,000 new homes every month!

HUD cannot delay this process, as the clock is ticking on President Biden’s first term and there’s a dwindling period of time to avoid a Congressional Review Act window. So, why hasn’t HUD updated their energy code yet?

 

First, let’s break down how the federal government sets energy efficiency standards for homes. 

The most affordable and easiest time to make a home efficient is when it’s first built. The government can ensure efficiency in new construction through building energy codes—standards regulating the energy efficiency of air sealing, insulation, and so on in new or majorly renovated buildings.  And while building energy codes for new homes are generally set at the state or local level, the federal government sets national efficiency standards for a wide range of federally-supported homes, including many of those receiving grants and loans backed by HUD, U.S. Department of Agriculture (USDA), and the Department of Veterans Affairs (VA).

 

 

Raising the efficiency standards on federally-backed homes isn’t just a good idea—it’s law.

 

 

In 2007, Congress passed the Energy Independence and Security Act, which barred homes built below the 2006 International Energy Conservation Code (IECC) standards from receiving federal loan support through HUD or USDA. (The law separately held multifamily homes above four stories to ASHRAE Standard 90.1-2004, not the 2006 IECC.) The legislation ordered that federal agencies either write their own efficiency standards or review the IECC standards each time they’re updated—every three years—and adopt the latest codes. 

Since this law was passed, the IECC has updated their model energy codes five times, but the administration has only updated them once, in 2015 under the Obama administration—and then only to the 2009 IECC and ASHRAE 90.1-2007 standards. 

 

So, what can the government do to improve the current energy efficiency standards?

The IECC and ASHRAE last updated their model efficiency standards in 2021 and 2019, respectively, but the efficiency requirements of homes under federally-backed loans remains woefully out of date at the 2009 IECC and 2007 ASHRAE standards. Since states set energy codes for the majority of new construction, this is the only lever the federal government has to mandate meaningful change in how these kinds of buildings are built, and correspondingly, address the climate and public health impacts that follow suit. 

Blog Post Image - HUD Secretary

HUD Secretary Marcia Fudge (right) meets with Vice President Kamala Harris at the White House in 2021.

The Biden administration can take advantage of this powerful tool. It all boils down to a simple yet bureaucratic process whereby HUD:

    1. Makes a preliminary determination that these codes would not harm housing availability and affordability,
    2. Submits and receives approval from the White House Office of Management and Budget (OMB),
    3. Releases the determination and engages in a public comment period, and 
    4. Submits a final determination.

Steps 1 and 2 have been achieved, and completing this process would set the stage for hundreds of thousands of new homes to be built to the highest, cleanest model codes written. 

After HUD issues this determination, USDA and the VA can apply the codes to their covered programs, as well. A white paper from the American Council for an Energy-Efficient Economy shows that following this process and updating to the latest energy codes could by 2050:

    • Avoids 81 million metric tons of carbon pollution;
    • Creates $8 billion in total net savings; and 
    • Adds 246,000 total job-years. 

There’s also a huge cost of inaction. Homes that continue to be built at lower standards will be in use for decades, creating more greenhouse gas pollution over time and burdening households with unreliable, wasteful, and expensive energy burdens for years to come. By contrast, bringing these buildings up to the latest energy criteria has tremendous and measurable ripple effects and would allow the Biden administration to continue to advance its climate and environmental justice legacy. 

 

Updating energy efficiency requirements in homes has serious environmental justice impacts.

The covered federally-backed grants and loans mostly benefit low- and middle-income families. That means the more rigorous efficiency standards would apply primarily for those families who stand to benefit the most. Addressing energy standards wouldn’t just cut carbon pollution, it would meaningfully impact public health by reducing air pollution and advance environmental justice by cutting energy costs for disadvantaged communities. 

Blog Post Image - Gas Water Heater

Fossil-fuel appliances, like the gas water heater pictured above, emit toxic pollutants inside Americans’ homes. © Scott Akerman/Flickr CC BY 2.0

Reducing Indoor Air Pollution

Fossil fuel appliances found in buildings emit 425,000 tons of nitrogen oxides per year, more than all of the nation’s power plants combined. Nitrogen oxides contribute to smog and particulate matter causing a wide-range of health issues like asthma, lung cancer, heart disease, and even premature death. Inside Americans’ homes, appliances contribute to indoor pollution often exceeding outdoor pollution requirements, and combustion from fossil-fuel appliances emit toxic pollutants like nitric oxide, carbon monoxide, nitrogen oxides, and carcinogens like benzene and formaldehyde. Research shows that even when gas appliances are turned off, they continue to leak pollutants into our homes. 

Like so many environmental burdens in the U.S., pollution associated with buildings affects marginalized, low-income communities, and communities of color the most. These groups are exposed to twice as much outdoor particulate matter pollution from fossil fuel appliances and suffer disproportionately higher rates of asthma, as a result. 

 

Cutting Energy Costs

Often, these communities are unable to afford building maintenance and improvements to mitigate this type of pollution, have poorly insulated homes, and less efficient appliances. As a result, low-income communities spend on average 13.9 percent of their household income—and as high as 30 percent—on energy costs, which is nearly three times more than what wealthier households pay. The same holds true for communities of color, who spend disproportionate shares of their income on energy costs. 

These disparities also mark a great opportunity to overcome the air pollution, carbon pollution, and environmental justice challenges plaguing the building sector because updated energy standards would primarily impact low- and middle-income family homes. 

 

What needs to happen next to ensure the Biden administration updates energy standards and cuts carbon pollution?

So far, HUD has submitted a draft determination on updating energy efficiency standards for a wide range of federally backed homes to OMB in August 2022. The OMB review process should have taken less than 90 days, but it was only finalized and kicked back to HUD in April 2023. Now, it’s up for HUD to engage in a comment period and finalize this determination as soon as possible, so the green building boom can begin.

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