Rescission of Energy Efficiency Standards for New Housing
HUD and USDA are rescinding the final determination to adopt new energy efficiency standards for housing financed by the agencies, citing concerns about affordability and a recent court ruling.
The Bottom Line
The Departments of Housing and Urban Development and Agriculture are immediately rescinding the energy efficiency standards for new construction that were finalized on April 26, 2024. This action is taken due to concerns that the standards would negatively impact housing affordability and follows a court decision vacating the determination.
The Case For
- The implementation of the Final Determination is antithetical to the Administration's policy to lower the cost of housing and expand housing supply.
- Empirical data and anecdotal evidence show that the implementation of the Final Determination would negatively affect the affordability of housing.
- The Final Determination has been judicially vacated and is no longer in force.
The Case Against
None explicitly stated in the source.
Key Numbers
- 43% increase in building material costs between January 2020 and November 2025
- 42% increase in contractors' bid amount for construction of homes between 2019 and 2024
- 6.2% average mortgage rate for conventional 30-year financing
Source Verification
Federal Government | Department of Housing and Urban Development, Department of Agriculture | 2026-08531
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✓ Quote-groundedQuoted passages this brief is built from (3)
- "This document announces the immediate rescission of the ``Final Determination: Adoption of Energy Efficiency for New Construction of HUD- and USDA Financed Housing'' (Final Determination), published on April 26, 2024, as well as subsequent notices by HUD and USDA (the Agencies) related to extensions of effective dates for the standards rescinded by this notice."— SUMMARY
- "In light of the foregoing realities, the Final Determination flies in the face of the Administration's express policy of increasing the supply of housing and making housing more affordable. The net effect of these realities is that affordability of housing in the Departments' respective covered housing programs would be negatively affected by implementation of the Final Determination (42 U.S.C. 12709(d)(1)). In addition, as noted above, the Final Determination has been judicially vacated and thus is no longer in force. As such, effective immediately, the Department of Housing and Urban Development and the Department of Agriculture rescind the Final Determination of April 26, 2024, in its entirety."— Rescission
- "Myriad factors beyond code-based energy requirements, including labor costs and material costs, combine to exert upward pressure on the cost of both single-and multifamily housing construction. For instance, according to the Bureau of Labor Statistics Producer Price Index for Single Family Residential Construction, a spike in the cost of building materials occurred between January 2020 and January 2022. While cost growth has slowed, it has not fallen with the result that building material costs have seen a 43% increase between January 2020 and November 2025."— III. Discussion