The Biden administration is eyeing its next target for a climate makeover — the U.S. housing market. A policy that could win approval within weeks would ensure that most new houses are built with efficient heating and cooling systems, writes Thomas Frank. The move could help carve a sizable dent in the nation’s greenhouse gas emissions and make the homes cheaper for residents to operate. But it could also add at least thousands of dollars to the homes’ purchase price — worsening a major pain point already souring many Americans on the economy. Residential and commercial buildings are responsible for 31 percent of the country’s planet-warming pollution, from sources such as heating and cooling, electricity use and food waste, according to an Environmental Protection Agency analysis. The federal mandate would require new homes bought with mortgages backed by Fannie Mae or Freddie Mac — in other words, most homes — to conform to the latest international standards for energy efficiency. Many U.S. homebuilders now use standards that are over a decade old and have weaker requirements for insulation, lighting, heating and cooling. Homebuilders oppose the proposal, saying the policy could increase the cost of new houses and deter potential buyers. (As if today’s interest rates aren’t deterrent enough.) But proponents say the federal mandate would save homeowners thousands of dollars in energy bills, not to mention reduce atmospheric pollution. And when it comes to sky-high housing costs boxing most young people out of the market, the costs of meeting energy efficiency standards may be the least of buyers’ and renters’ worries compared with inflation, supply shortages and high mortgage rates. An analysis by the Department of Housing and Urban Development found the proposed policy would add $7,200 to the average price of a new home but would cut energy costs by nearly $1,000 a year. The average home price in the U.S. was $495,100 in 2023, according to the Census Bureau. History offers some precedent for home builders meeting tougher government mandates while building for the mass market: Florida adopted strict hurricane codes decades ago requiring homes to be better able to withstand powerful storms.
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