Inflation Reduction Act Signed into Law without NAHB SupportSeptember 15th, 2022 by Travis Rains
The passage of the Inflation Reduction Act in August and subsequent signing of the legislation into law by President Joe Biden lacks support from the National Association of Home Builders (NAHB). The association calls the measure “flawed” as it reportedly fails to ease inflationary pressures on housing while at the same time advancing building and energy code requirements to the point of increased costs for homeowners and renters.
The legislation comes with a new state program for whole-home energy efficiency retrofit projects. That program will provide rebates of up to $4,000 for retrofit projects that will save 35% or more of energy use, and $2,000 for those projects that accomplish savings of 20% or more. The rebates double for low- and moderate-income homes.
Incentives, to the tune of a 30% tax credit, are also available for a variety of energy-efficient appliances and improvements. Up to $1,200 in annual rebates is also on the table for measures that reduce home energy waste, including energy-efficient doors and windows.
According to the U.S. Department of Energy, the legislation is forecast to save the average U.S. taxpayer $1,000 a year in energy costs. While the National Association of Home Builders notes that the legislation includes positives such as extensions to existing tax incentives, the association raises issues with a number of other inclusions.
Overall, the NAHB believes “the bad outweighs the good.”
“The legislation does nothing to address the housing supply crisis facing American families,” NAHB wrote in a letter to lawmakers. “Rather the bill will disincentivize multifamily construction, increase the cost of new homes through higher energy code requirements, and inflate labor costs.”
For example, the association points to $1 billion in grants, which it says will be used to “pressure” state and local governments to adopt more-stringent energy requirements. The association also calls out the $670 million earmarked for the adoption of energy regulations for residential and commercial buildings meeting zero energy provisions in the 2021 edition of the International Energy Conservation Code.
“The practical effect will be to raise housing costs even further while doing very little to provide meaningful savings for residential homes and apartments,” NAHB continues.
President Biden signed the act into law on Tuesday, Aug. 16.