House Watch

Energy efficiency codes mean lower utility bills, but not all builders are sold

By Katherine Salant
Saturday, May 15, 2010

To the extent that homeowners know anything about the building code, most assume the focus is on the safety of crews who build houses and of the people who will occupy them. In this assumption the homeowners would be correct.

But one section of the building code has implications that reach far beyond the individual house and homeowner, and that is the one that deals with energy efficiency.

When builders are required to increase the energy efficiency of new houses, the owners will benefit from lower utility bills. Low-income homeowners, the group most vulnerable to foreclosure, will fare especially well because utilities are a big part of the total budget. A house that uses less energy is more affordable to more households, but this is not the position that has been taken by the home building industry.

Its leading trade association, the National Association of Home Builders, has maintained that measures taken to increase energy efficiency will add to the cost of the house and that this added cost will price many thousands of buyers out of the new-home market. This argument prevailed for many years at the code hearings in which energy-efficiency requirements for new houses are determined. (The International Energy Conservation Code, known as the IECC, establishes energy efficiency for all new buildings in the United States. The code hearings are held every three years.)

With the 2009 IECC code hearings, however, things began to change. Bill Fay, at the behest of the Alliance to Save Energy, organized the Energy Efficient Code Coalition, an eclectic mix that now has 55 members, including think tanks, affordable-housing advocates, utility companies, home-building related businesses and environmental organizations not generally associated with housing, such as the Sierra Club.

The goal of the EECC was the "30 percent solution" -- a 2009 version of the IECC that would be 30 percent more efficient than the 2006 version. That goal was also sought by the U.S. Department of Energy and the U.S. Conference of Mayors.

Although a 30 percent increase seemed like a big jump, Fay said it could be easily done with available building materials and would not unduly burden overworked municipal building inspectors. The groups that advocated for this change, however, were less than 50 percent successful. Averaged nationally, the 2009 IECC ratchets up the efficiency requirement by only 12 percent.

But there is a silver lining: Fay's group has permanently altered the terms of the debate.

First, it demonstrated that vastly increasing energy efficiency does not automatically have a negative effect on home sales.

Mark Wahl, president of Cobblestone Homes in Saginaw, Mich., said he had no problem selling first-time buyers houses that were 15 percent more efficient than what EECC was pressing for, even though this did add, on average, $4,000 to the cost.

Faren Dancer, a Santa Fe builder and president of the Santa Fe Home Builders Association, testified at the code hearings in 2008 that in his market they were already building affordable houses that met the goals of the EECC. Moreover, he said, "you can achieve this with no increase in cost at all. You just have to get up to speed on doing things a little differently."

The EECC also brought many more voices to the discussion. "In the past, builders have said, 'One person buys one house from a home builder, and no one else should be in the debate,' " Fay said. "We argued that the entire community has a vested interest in its housing stock. We brought in many groups who had never weighed in on code issues, including affordable-housing advocates."

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