Fargo Standard

At a recent Energy Subcommittee hearing in Washington, D.C., Congresswoman Julie Fedorchak (R-ND) criticized federal energy code mandates, arguing they have significantly increased the cost of new homes in North Dakota. Fedorchak cited information from the North Dakota Home Builders Association, stating that the 2021 International Energy Conservation Code can add more than $22,000 to the price of a home in her state, with some builders estimating increases up to $31,000. She noted concerns about affordability and questioned whether these standards provide value for homeowners.

"When I travel around my state, I hear from many folks that one of their biggest problems is access to housing. There are not enough new houses on the market. And then when I talk to the North Dakota Home Builders Association—which I've met with several times because this is a big issue in my state—they talked about the building codes and how inappropriate they are for our state," said Fedorchak.

She continued: "The 2021 International Energy Conservation Code, according to the North Dakota Home Builders Association, can add more than $22,000 to the price of a home in my state. And in practice, the builders have estimated up to $31,000. Yet even more troubling, they tell me that it will take up to 90 years for a homeowner to get the payback for those standards. So obviously, that doesn't make any sense at all. This one-size-fits-all solution doesn't work."

Fedorchak asked Jerry Howard Hughes III, Chairman of the National Association of Home Builders (NAHB), about alternatives that could give states more flexibility.

"Well, throwing it back to states so the states can establish their own codes, and they have that freedom now. Unfortunately, to me, the code that has been developed as a model code has been presented as unamendable. You have to take it as is, and we're a strong advocate that each state should take it and tailor it to their location and their needs, and much more of that needs to take place," Hughes responded.

When asked what prevents states from adopting their own standards or amending existing ones, Hughes pointed out resource limitations and lack of awareness among some states.

"Maybe education—just the fact that too many states don't realize that they can do that. Several states are doing very well: Texas, Washington, California, North Carolina. We do our own code. We have resources to do that; we have personnel in North Carolina; we have a residential Code Council; and we have full-time employees that lobby that. Too many states don't have those resources, and they're told that they can't make amendments to that code, and that's simply not true," he said.

Fedorchak also raised concerns about federal agencies such as USDA and VA adopting these energy codes for homes financed through their programs. She questioned what impact similar requirements by Fannie Mae or Freddie Mac might have on housing markets nationwide.

"Are there other problems? The last several building code updates developed by the ICC have clearly prioritized a green agenda over cost-efficient home construction. The USDA and the VA have already adopted those latest ICC energy code standards for the homes they finance, effectively imposing these standards on those federally-backed loans. So that probably prevents or prohibits the ability of states to develop their own standards if some of these big federal programs are requiring the ICC standards. In your view, what would be the effect on the U.S. housing market if Fannie Mae and Freddie Mac were to adopt these standards?" she asked.

Hughes expressed concern over this possibility: "Well that's one of our greatest fears no question. And in North Carolina we've gone to a six-year code and our legislation actually imposed a pause on any new energy codes until next cycle that'll take place in 2030. If HUD rule stays in place eliminates USDA & VA loans then we simply lose all those in NC so talk about huge limiting factor just won't work."