According to a recent study by the National Association of Home Builders, changes to building codes over the past ten years have added the most to regulatory costs. Averaged across all homes, the cost increases associated with codes account for 9.9% of a builder’s construction costs and 6.1% of the final house price.
While previous research from NAHB in 2016 showed similar results, the price of new homes increased substantially in the interim. When applying these percentages to U.S. Census data on new home prices, the data estimates that regulatory costs in an average home built for sale went from $84,671 to $93,870 — a 10.9% increase during the five years between the 2016 and 2021 estimates.
In other words, overregulation is exacerbating the nation’s housing affordability crisis. What’s that mean for the Pacific Northwest? Well . . . the Pacific Northwest is about to put building code regulations into hyperdrive. The building code councils for both Oregon and Washington are considering a slew of new proposals that severely limit energy choices by mandating the use of ONLY electric equipment for homes and businesses in our states. So, for heating, water heating and cooking, our homes, restaurants, stores, offices, etc. will eventually ONLY be allowed to use electric equipment – no more clean, efficient and reliable natural gas.
This impacts everyone in two ways. First electric equipment is generally more expensive than natural gas equipment, and two, electricity is much more expensive than natural gas. This further exacerbates the price new homes while driving up utility bills.
Policymakers need to take bold steps to reduce or eliminate unnecessary regulations that will help builders increase the production of quality, affordable housing to meet growing market demand.
The policy leaders and special interest groups pushing for these new building codes are displaying a lack of empathy for residents already struggling with high housing and utility costs. Energy policies should not punish families. Their requests for support should be heeded and responded too appropriately. And it is an even greater burden on vulnerable communities and the elderly.
This is a serious equity issue. Again, policy leaders and special interest groups talk about income inequality, but it’s our policies that are driving a wider economic divide between the working class, the poor and the rich. As our region grapples with discrimination and income inequality, we cannot continue heaping the cost of “green” policies on marginalized and impoverished communities.
It is time meaningful equity issues such as the cost of living, electricity reliability and cost be made a priority in California’s energy policymaking. The well-being of working families and communities of color rely on our action.