It should come as no surprise that the latest 600-plus-page energy bill from Congress would expand the federal government’s involvement in Americans’ businesses and personal lives.
When the American Energy Innovation Act was introduced in the Senate this year, red flags went up from home builders and building materials manufacturers in response to a proposed amendment to the bill.
The amendment, proposed by Sens. Rob Portman and Jeanne Shaheen, focused on energy efficiency mandates in building codes, giving the Department of Energy a massive foothold in the commercial and residential building industries. After hitting a number of roadblocks, including my steadfast opposition to this federal power grab, the energy bill was eventually pulled from consideration. But now the bill is back and worse than before because the building codes language from the amendment is now part of the bill itself. This means there is no way to stop the bad building codes policy on its own. That’s why I will continue leading the charge to block any attempt to ram through this legislation in a lame-duck Congress.
During a recent job site meeting with local builders, David Sowders, vice chairman of the construction, codes and standards committee of the National Association of Home Builders, highlighted examples of the increased costs of home building, which further reduces housing affordability for all home buyers. Sowders said: “The building industry will be impacted negatively. Builders have already experienced an average of 170% increase in lumber cost from April to August of this year. This is just one of the many cost increases we have seen in our industry. In the 2021 International Energy Conservation Code, a change in the attic insulation range can cost a consumer upfront $900 to $2,000. Recent studies indicate that for every $1,000 increase in a home’s price, 158,857 households will be priced out of the market for that home. If the Portman-Shaheen language was enacted, these upfront costs would continue to be exacerbated.”
What exactly do the energy efficiency building codes provisions in the bill call for and what would they mean for Americans? In addition to directing the secretary of Energy to support updating model building energy codes, it also authorizes the secretary to set forth burdensome and expensive energy targets.
These initiatives fail to incentivize the revitalization of older structures, which use more energy than newer buildings and constitute roughly 80% of buildings in the U.S. This all leads to increased costs for new residential and commercial buildings. The cost of current regulations accounts for 26% of the cost to build a new single-family home, according to NAHB. As America continues to recover from the economic impacts of COVID-19, the last thing we need is a set of federally influenced building codes disincentivizing new home buyers and the construction of commercial buildings.
At the end of the day, it’s also important to remember these codes are not needed. State and local governments already have processes to handle building permitting. This position was underscored by members of the Builders Association of South Central Kentucky, whom I spoke to at the recent job site meeting. The American Society of Heating, Refrigerating, and Air-Conditioning Engineers sets model energy codes for commercial buildings, while the International Code Council develops model codes for commercial and residential buildings.
The DOE has representation in both of the organizations’ development processes and provides state and local governments technical assistance in the adoption of these model codes. Adoption of the model codes happens either by legislative or regulatory action at the state level, and adoption is voluntary. A federal mandate, like that in the energy bill, for the Department of Energy to set energy targets and circumvent the code-development process provides little to no room for costs to be considered.
Home builders agree with public sentiment that promoting innovation in the energy sector is a good thing, but the federal government shouldn’t be picking winners and losers in the energy game, especially by leaving out reliable, low-cost fuels like coal. As with a lot of the bills you see introduced in Washington, however, good intentions don’t always lead to good policies, and we have to be cognizant of the future implications of today’s actions.
Before we expand the federal footprint in the energy and building industries, we need to consider what policies future administrations might develop. What happens in a Biden administration that calls the Green New Deal a good framework? Rep. Alexandria Ocasio-Cortez’s Green New Deal calls for retrofitting all existing buildings for energy efficiency. Sen. Bernie Sanders has called for pouring trillions of dollars into energy efficiency building upgrades and ending the use of fossil fuels in buildings by 2030.
As America’s economy continues its recovery from COVID-19, we cannot allow for more burdensome model codes from the federal government that will stifle innovation, investment and growth.
– Rand Paul lives in Bowling Green and is Kentucky’s junior U.S. senator.