In a post called “We’ve Upped Our Standards, Now Up Yours,” I wrote about a great pilot program in Victoria, BC that is taking the first step toward requiring energy efficiency ratings at the point of sale for single family homes. Programs like this have often run into resistance from builders and others who say that they would be “bad for business,” harming transactions during an already sour housing market.

For example, Portland councilmember Dan Saltzman, the champion of a similar measure that would have changed the code to create energy efficiencies in commercial and residential buildings found out very quickly that messing with the code can lead to some political backlash. After Saltzman touted the new measure at a national conference, putting Portland in the sustainability spotlight, he returned home to find builders opposing his proposal.  

Dave Nielsen, chief executive officer of the Home Builders’ Association of Metropolitan Portland, said Saltzman is rushing to impose new rules without assessing their potential impact. Buyers of new homes might or might not recoup the higher price they pay for energy efficiency measures, Nielsen said.

They have no clue in terms of what the costs are to do this and what the value will be, to the consumer or the value of the home,” Nielsen said. “They’re just trying to be first to something, and it’s crazy.

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  • So the program in Portland, which will begin later this year, was scaled back, exempting single family homes and leaving existing commercial buildings mostly alone. Yet it is far from clear that policymakers should take seriously the objections of the builders associations.

    In fact, builders almost always object to new requirements, arguing that they will add to the cost of housing. The National Association of Housing Builders (NAHB) complains that each year a “myriad of code changes proposed that would, if approved, significantly increase the cost of constructing new homes and reduce housing affordability.”

    Does raising standards increase costs that lead to increases in housing price? Raising standards can add to construction cost. But there is a huge pay off in increased health and safety, and—in the case of energy efficiency requirements—reduced operating costs. In the end, energy efficient buildings can make housing more affordable. For more on this topic check out my post “Does Green Building Have to Break the Bank?” (Spoiler alert: The answer is “no.”)

    Builders certainly can’t make a profit by construction of buildings that burst into flames or fall down in a minor earthquake. Also builders have an obvious interest in supporting standards that lead to reasonable health and safety outcomes, and some builder groups support energy efficiency. But here are just a few of things the NAHB opposes:

    • Continue to oppose mandatory residential sprinklers for multifamily low-rise and single family residential construction and other fire protection techniques that do not enhance the safety of occupants and are not cost-effective.
    • Oppose excessive seismic regulations and laws that do not reflect the actual seismic risk.
    • Urge Congress to require the Government Accountability Office to evaluate the economic impact of the mitigation provisions on the housing and construction industry in the various seismic areas before any action is taken.

    The question is who should make the determination of what an ‘actual seismic risk’ would be; well informed local governments looking out for health and safety or the industry being regulated? Builders’ groups almost always oppose upgrades in standards because of costs even when they may reduce fire risk and improve safety during earthquakes. But to be clear, there can be reasonable and constructive debate over what new standards should look like. Opposing new standards isn’t irresponsible all by itself.

    Building codes are undeniably important for health and safety, a fact that is made brutally clear by comparing the recent earthquakes in Haiti and Chile. An outstanding article in The Infrastructurist called “The Power of Building Codes” points out that:

    The earthquake that struck Chile on Saturday measured a whopping 8.8 in magnitude, making it 500 times more powerful than the 7.0 quake that struck Haiti in late January. Still, the death toll in Chile—which has recently topped 700, hardly an insignificant tragedy —  is a mere .3% of the estimated 250,000 that died in and around Port-au-Prince.

    In other words, it was good building codes that made the difference in the scale of the death and destruction.

    Now I’m not saying that any builders or developers support Haitian-level building codes. But consider that climate change is akin to a slow motion earthquake. It will have devastating impacts on our economy and on public health if it isn’t checked. So if elected officials are going to close the Sustainability Gap they ought to think twice about listening to the building industry as they consider changes to building codes that would mandate energy efficiencies

    Study after study has pointed to the role that energy efficiency in buildings has in reducing climate change. Take for example the one I always cite, McKinsey and Company’s Unlocking Energy Efficiency in the US Economy. That study suggest that if we completed large scale energy efficiencies, including new and existing buildings, we could abate 1.1 gigatons of green house gas emissions annually by 2020. Some of these efficiencies—and related reduction in emissions— will require improvements of overall standards imposed by federal, state, and local governments.

    It doesn’t make sense to attenuate increases in energy efficiency requirements in the code if, over the longer term, it undermines the Northwest’s much ballyhooed efforts to go carbon neutral. As we have pointed out before, increasing requirements for efficiencies for old and new buildings is an important part of saving energy, money, and creating green jobs—and slowing the impacts of climate change.