Can homebuying consumers bear the cost of new green and energy codes during recession?
Some of our prior posts included information about new energy efficient “Net Zero” Homes and California’s landmark decision to mandate a Green Building Code (CALGREEN). However, there may be unintended financial consequences when code officials mandate green and more energy efficient homes.
Concern about these consequences caused the Building Industry Association of Washington (BIAW) to file a lawsuit on behalf of its members. The complaint alleges that the end result of new provisions in the Washington State Energy Code that go into effect in July 2010 will be that fewer homes will be built and sold because consumers cannot afford to buy the homes that would be built under the new code requirements. BIAW alleges that the cost to comply with these code requirements would increase the cost of an average home by $4,000-$15,000. Probably a tough sell to first time buyers in recession.
According to the Washington State Building Code Counsel (SBCC) in the long run these code requirements will result in lower energy costs over the life of the homes. However that may be small consolation to buyers who cannot afford these energy efficient and code compliant homes in the first place.
This possible energy and code conflict would not be the first of its kind in Washington. In the 1990s building and energy codes mandated tighter insulated buildings that featured exterior fire resistive gypsum sheathing. The problem was that in wet climates like western Washington, when rain penetrated behind cladding, the result was mold, a loss of structural capacity and hundreds of millions of dollars in property damage. This conflict also dramatically increased the cost of insurance on residential construction projects and hence increased the cost of homes.
So apparently major changes in building and energy code requirements may need to be tested by the courts and mother nature before code officials, builders and consumers all realize the intended benefits.
Greg -
Great article about the BIAW suit. I'd love to know more about it as it progresses. But, I'm surprised that the BIAW is making this stance. A growing proportion of their builders are promoting sustainable building practices and seems to be counterproductive considering the inevitable growth in the industry.
If the state and local governments can counteract additional costs with financing programs? If they can provide tax credits, tax incentives, and even free money, I think we rid ourselves of the costs problem until the industry catches up and prices become more uniform.
Just a thought. Thanks for the note about the case.
Doug Reiser
Hi Doug,
Thanks for your insightful comments. I spoke with a BIAW rep Tuesday and their suit is similar to a suit filed in Nex Mexico where the plaintiff was successful on similar grounds. The suit does not seem anti green, more like pro affordable (entry level) housing.
Agree there must be a middle ground where homes can be both green and within the reach of first time buyers. Seems state or federal agencies could work with lenders and builders to make it happen.