Podcast: Massive Win in Battle Over Federal Energy Code Mandates
On the latest episode of NAHB’s podcast, Housing Developments, CEO Jim Tobin and COO Paul Lopez welcome VP of Legal Advocacy Tom Ward to discuss the impact of the recent court decision on the Department of Housing and Urban Development’s (HUD) and the Department of Agriculture’s (USDA) final determination to impose the 2021 International Energy Conservation Code (IECC) and the 2019 ASHRAE 90.1 standard on certain single-family and multifamily housing programs.
The determination required that any new home sold to a Federal Housing Administration (FHA) borrower or USDA rural housing borrower had to meet the 2021 IECC, even though only a handful of states had adopted the code at that point. Adding to confusion is the fact that, at the time of construction, a builder doesn’t necessarily know how a prospective home owner will be financing their purchase.
“Our members immediately came to us and said that 2021 IECC is unworkable,” Ward shared, setting off a chain of legal actions to combat the mandate. “It’s hard to meet, it’s expensive … the payback’s impossible. So they said we’ve got to do something about that.”
NAHB took a multi-pronged approach — legislative, legal and regulatory — to attack the issue. This included collaboration with state and local home builders associations (HBAs) to file a joint suit with 15 state attorney generals.
“It’s the strength of our Federation — all of our state [executive officers] who held those relationships to get those AGs on,” Tobin added.
NAHB’s arguments in the case were that the mandate was unconstitutional, the government had violated the Cranston-Gonzalez National Affordable Housing Act, and it was arbitrary and capricious. The court disagreed on two of the three counts, but ultimately decided that HUD had violated the Cranston-Gonzalez Act. The statute only allows the government to make this update once, which it had in 2015 when it adopted the 2009 IECC, and requires that it will not have a negative impact on housing availability, which HUD’s impact report indicated would drop by 1.5%.
On the legislative front, the ROAD to Housing Act is up for a vote in the Senate this week, following House passage of the Housing for the 21st Century Act. Although previously supported by NAHB, a “poison pill” was added to the ROAD to Housing Act — requiring newly built single-family rental housing to be sold within seven years of construction — that NAHB believes would actually lead to a decrease in housing supply.
“It’s going to completely remove capital from the housing sector right at the time we need to build more supply,” Tobin stated, citing a specific example from an NAHB member who had an investor pull out because of this provision. “All of our other friends in the housing industry are with us, and we’ve signaled to the Senate that we are not happy with this provision.”
He added: “We’ve made recommendations on how to fix it to make sure that it does exempt this single-family built-for-rent product to move forward and getting away from that seven-year must-sell. Because it’s not practical.”
NAHB will be monitoring any amendments to the bill this week and how the Senate votes, and will subsequently work with the House on key provisions before the package is finalized.
Tobin and Lopez also touted the success of the 2026 International Builders’ Show (IBS) in Orlando. Be sure to join NAHB Feb. 2-4 for the 2027 IBS in Las Vegas.
Listen to the full episode of the podcast below and subscribe to Housing Developments through your favorite podcast provider, or watch all the episodes on YouTube.