Select Page

The Biden administration once again puts its climate agenda above home affordability

 

By Ben Lieberman, Competitive Enterprise Institute

The Biden administration talks a good game about making housing more affordable, but in truth it is actively boosting costs through expensive climate change measures that get passed on to homebuyers. The latest example is the Department of Energy’s (DOE) Decarbonizing the US Economy by 2050: A National Blueprint for the Buildings Sector (Blueprint), which includes a host of recommendations for homebuilders likely to put the dream of home ownership further out of reach for many families.

The Blueprint seeks to reduce greenhouse gas emissions attributable to the construction and use of homes as well as public and commercial buildings. Virtually every provision in it would be bad news from a homeowner perspective.

For starters, the Blueprint calls for environmentally-friendlier but very likely costlier construction materials. Normally homes would be built with the most affordable materials consistent with quality. But under the administration’s “whole of government” obsession with climate change – of which DOE’s Blueprint is the latest addition – there is an aggressive push towards “lower embodied carbon materials.”  

It is not entirely clear which kinds of roofing, siding, pipes, etc. would meet this new green metric and which would not, but one thing is certain – if such materials didn’t cost more, they would come into use without the heavy hand of Washington.  

Expect a lot of lobbying from manufacturers of such materials that want their pricey but supposedly greener construction materials to qualify for this burgeoning market. And expect costlier construction materials to place yet more upward pressure on already-high new home prices.      

The Blueprint also pushes for “unprecedented reductions in direct building emissions from on-site fossil fuel combustion.” In plain English, this means moving away from residential natural gas use for heating and other purposes and in favor of the electrification of everything – a major crusade among climate activists. The Blueprint would add to the administration’s multi-agency efforts to discourage natural gas availability in new construction. Ironically, DOE itself has documented that natural gas is at least three times cheaper than electricity on a per unit energy basis, so the agency is knowingly choosing climate advocacy over consumer advocacy.  Equipment costs would also rise. The Blueprint particularly favors electric heat pumps that are very expensive up-front and don’t make sense for some parts of the country.      

The only thing in the Blueprint that could conceivably save people money are the efforts at making homes more energy efficient, but the track record for such Washington-mandated efficiency measures suggests the opposite is at least as likely. For example, the history of DOE appliance efficiency standards shows that they may raise the up-front cost more than is likely to be saved on energy bills, and they sometimes achieve the savings at the expense of appliance features and performance. A good rule of thumb is that most energy-saving measures that make sense will already be undertaken by homebuilders and homeowners, but government meddling takes things to irrational extremes.  

Technically, the Blueprint only makes recommendations, but there are many ways the federal government can coerce compliance. For example, the grant money to state and local governments from the Inflation Reduction Act and other statutes can – and probably will – be made contingent on them changing their building codes to reflect the Blueprint. And homebuilders not willing to go along may find their homes ineligible for Federal Housing Administration loans. The climate crowd plays hardball.

Saddest of all are the effects on lower-income Americans that aspire to own a home. Predictably, the Blueprint contains plenty of compassionate rhetoric – the word “equity” is included 35 times and “environmental justice” another eight. But the reality is that the Blueprint’s prioritization of the climate agenda over affordability will make home ownership much more difficult for everyone, and disproportionately so for those struggling to buy their first home.  

 


Ben Lieberman is a senior fellow who specializes in environmental policy at the Competitive Enterprise Institute.