The Biden administration’s new housing policies, designed to fight climate change and promote energy efficiency, are making the current housing crisis worse. These new rules come at a time when there aren’t enough houses, prices are already high, and interest rates remain high.

One big problem is the push for green energy building codes. The Department of Energy (DOE) is giving hundreds of millions of federal dollars to local areas to adopt these codes. These rules aim to save energy and reduce pollution, but they also make houses more expensive to build and the cost savings doesn’t  material for nearly a century . According to the National Association of Home Builders, following the 2021 International Energy Conservation Codes (IECC) could add up to $31,000 to the cost of a new home. These extra costs usually get passed on to buyers, making it harder for people to afford new homes.

The Heritage Foundation points out that these green energy rules lead to higher costs for homeowners. Even though energy efficiency is good for the environment, it means higher upfront costs for people buying homes. In a market with not enough homes and high prices, these extra costs make it even harder to build new houses. This makes the housing shortage worse. To make matters worse, it could take up to 90 years for homeowners to save enough on their energy bills to cover these extra costs. 

Additionally, the U.S. Department of Housing and Urban Development (HUD) and the U.S. Department of Agriculture (USDA) now require that all new single-family homes they finance follow the 2021 IECC rules. Multifamily homes must follow either the 2021 IECC or ASHRAE 90.1-2019 standards. Critics say this decision was made without considering how it affects homebuyers and renters. Building to these standards can add significant costs to new homes, making them too expensive for many people and making older, less efficient homes more attractive.

While the Biden administration’s energy efficiency policies aim to help the environment, they risk making the housing crisis worse. These rules increase the cost of building new homes, making it harder for people to afford them in an already highly inflationary environment.