NAHB reports that a federal court has struck down a major energy code mandate that would have raised construction costs for many new homes.
The ruling stems from a lawsuit brought by the National Association of Home Builders and 15 states challenging a federal determination by HUD and the USDA to require the 2021 International Energy Conservation Code (IECC) and ASHRAE 90.1-2019 standards for certain housing programs.
According to research cited in the case, the mandate could have increased the cost of building a new home by $9,600 to $21,400, depending on the climate zone.
The U.S. District Court for the Eastern District of Texas ruled that the agencies exceeded their authority under the Cranston-Gonzalez National Affordable Housing Act, which limits how federal housing programs can adopt energy code changes.
For builders, the implications are practical.
Higher energy code requirements don’t just increase construction costs. They can also slow permitting, complicate design requirements, and reduce the number of homes that can be built at attainable price points.
In a market already struggling with supply shortages and affordability challenges, those added costs would likely have reduced production and pushed entry-level buyers further out of reach.
The ruling blocks the federal mandate—for now.
But the broader debate over energy codes, housing costs, and regulatory authority is far from settled, and builders should expect it to remain a key policy battleground in the years ahead.
