A group of U.S. senators are pushing forward with plans to urge the Federal Housing Finance Agency to phase in minimum energy efficiency standards for federally-backed new homes.
The seven democrats were joined by independent Sen. Bernie Sanders of Vermont in writing to FHFA Director Sandra Thompson on Monday that aligning new home energy standards with updated model codes will save homeowners and renters money and make the housing market more consistent and stable.
Earlier this year, the Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) adopted energy efficiency standards for their residential mortgage program. The senators are asking that the FHFA follow suit and raise energy standards on new homes the agency supports. They maintain that research by Freddie Mac found that energy efficient programs may improve resale values and possibly help reduce mortgage defaults. While the new energy standards will increase the initial costs of construction, the senators say that HUD and USDA found that the higher price will be more than made up for by lower monthly energy bills.
The senators wrote that by accepting the higher energy standards, builders would be eligible for tax incentives for adhering to the stricter construction levels for homes and apartment buildings. When built to the higher standards, homes will use about 40% less energy than typical homes.
Critics, however, have maintained that implementing new standards would increase the cost of home building at a time when housing costs are at record levels. The Mortgage Bankers Association (MBA) wrote in an email that it is contradictory to impose regulations that would increase the cost of new homes and then proposed tax credits to those building them.
“New homes are already the most energy efficient in the housing stock,” wrote Adam DeSanctis, vice president of communications for MBA. “The focus should remain on building at a time that affordability and supply are both low.”
