In late April, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) announced the adoption of the updated Minimum Energy Standards for new single and multifamily homes. The effective date is May 28, 2024.
The standards mirror a bundle of building codes that set efficiency targets for insulation, windows, HVAC and other systems. The extensive and detailed particulars can be found here.
In a press release, HUD says that “Adoption of these standards will yield significant cost savings for residents, reduce energy use and pollution, improve resident health and comfort, and increase resilience in extreme weather events of both single and multifamily homes. Energy standards use tried and true cost saving insulation, air sealing, and efficient windows, lighting, and heating and cooling systems to lower monthly energy bills for families living in newly constructed HUD and USDA-supported properties.”
“Many people have been caught by surprise when utility costs spike. Families should never have to find themselves making hard choices about whether to heat their home in winter or use cooling during a heat wave,” Marion McFadden, Principal Deputy Assistant Secretary for Community Planning and Development, says in the release. “The most cost-effective moment to invest in common sense energy efficiency is when you’re building a new home. These updates don’t just benefit the residents of these homes. They benefit us all by reducing carbon emissions that lead to climate change. Emissions savings from these standards is equivalent to taking 46,000 cars off the road every year.”
Fulfilling the Energy Independence Act
HUD says that this Notice fulfills a statutory requirement under The Energy Independence and Security Act of 2007, which requires HUD and USDA to jointly adopt the latest energy standards, contingent on a determination that they will not negatively impact the affordability and availability of the covered homes. This Notice brings HUD into compliance with the statute.
The vast majority of HUD-financed units that will be built to the updated standards are single-family units, and the payback period—the amount of time it takes for homebuyers to start seeing savings through lower energy bills—for their homes is swift, the agency says.
Energy bills are one of the largest costs associated with owning or renting a home, especially for low- and moderate-income families. On average, low-income households spend three times more of their income on energy bills than the national average.
Many parts of the country continue to experience significant increases in extreme hot and cold temperatures and severe weather events due to climate change. These updated energy standards will make homes more resilient to extreme weather, physically durable, and improve efficiency to operate. Energy standards are proven to save lives in extreme heat and cold, especially during a power outage.
The updated minimum energy standards will generate an estimated reduction of as much as 6.35 million metric tons in carbon emissions over 30 years, generating an annual societal cost savings of $13.9 million.
This determination impacts new construction for specific HUD and United States Department of Agriculture (USDA) financed programs, including FHA-insured single family and multifamily homes, Housing Trust Fund, HOME Investment Partnerships Program, Rental Assistance Demonstration (RAD), Project Based Vouchers, public housing Capital Fund, Capital Fund Financing Program, Choice Neighborhoods, Section 202 Supportive Housing for the Elderly, Section 811 Supportive Housing for Persons with Disabilities, and USDA Direct Home Loan and Guaranteed Home Loan programs.
