How the Supreme Court Decision to Rein in EPA Authority Could Affect Builders

Legal
Published

The Supreme Court last week issued a decision that is generally positive toward NAHB’s interests when it voted 6-3 to restrict the ability of the Environmental Protection Agency to regulate carbon emissions.

In the case of West Virginia et al v. EPA et al, the high court ruled that the EPA exceeded the authority of the Clean Air Act when it promulgated the Clean Power Plan (CPP) during the Obama administration. The decision’s main relevance for NAHB is its discussion of an administrative law principle, the “major questions doctrine.”

The major questions doctrine holds that unless Congress has clearly stated its intent for a federal agency to exercise its authority to regulate an issue, courts must reject the agency’s approach. In this case, the Supreme Court said the EPA asserted “highly consequential power beyond what Congress could reasonably be understood to have granted.”

The major questions doctrine is helpful to NAHB because it sets a higher bar for courts when faced with agencies using existing statutory authorities for novel regulatory approaches.

With regard to the CPP rule itself, the original rule had never gone into effect, and most of the deadlines and goals were met through market forces. In its original form, the CPP contained provisions that would have incentivized the adoption of stringent energy efficiency building codes for new construction.

While it was unlikely that the Biden administration would bring back the original CPP, the Supreme Court’s ruling cements that reality, and EPA will be unable to set a section 111(d) rule that impacts NAHB members through demand-side efficiency requirements.

The Supreme Court’s application and discussion of the major questions doctrine will be helpful to NAHB members in addressing agency attempts to create new regulatory programs that depart significantly from statute.

Subscribe to NAHBNow

Log in or create account to subscribe to notifications of new posts.

Log in to subscribe

Latest from NAHBNow

IBS | Leading Suppliers Council

Oct 23, 2025

IBS 2026 Exhibit Home Aims for Groundbreaking Energy-Efficiency Rating

For anyone curious about how far today’s innovative building products can take a home’s performance, The New American Home 2026 is the must-see showcase at the upcoming Builders’ Show, taking place Feb. 17–19.

Workforce Development

Oct 22, 2025

NAHB Generates Enthusiasm for the Trades During the Big Build

NAHB recently introduced thousands of students to the skilled trades during The Big Build event at the National Building Museum in Washington, D.C.

View all

Latest Economic News

Economics

Oct 20, 2025

Non-Conventional Financing for New Home Sales Loses Ground in 2024

Nationwide, the share of non-conventional financing for new home sales accounted for 31% of the market per NAHB analysis of the 2024 Census Bureau Survey of Construction (SOC) data. This is 1.7 percentage point lower than the 2023 share of 32.4%. As in previous years, conventional financing dominated the market at 69.3% of sales, higher than the 2023 share of 67.6%.

Economics

Oct 17, 2025

Better Growth, Larger Deficits: CBO Fiscal Outlook

The Congressional Budget Office (CBO) is a key nonpartisan score keeper that measures the effects of policy changes by the Federal Government. With several policy changes since January of this year, including the One Big Beautiful Bill Act (OBBBA), stricter immigration, and higher tariffs, the CBO updated its economic projections through 2028.

Economics

Oct 16, 2025

Amid Market Challenges, Builder Expectations Rise in October

Even as builders continue to grapple with market and macroeconomic uncertainty, sentiment levels posted a solid gain in October as future sales expectations surpassed the 50-point breakeven mark for the first time since last January.