Builders concerned by environmental standards costs
| Saturday, Mar 06 2010 12:00 PM
Last Updated Monday, Mar 08 2010 01:31 PM
Debate, if you like, whether new housing is needed in a market with an alarming backlog of existing homes in or near foreclosure.
The president, the governor and many others insist residential construction is a key component of the economy’s recovery, but homebuilders say new environmental regulations threaten their industry’s fledgling comeback.
At issue is Title 24, a set of energy efficiency standards that the state Legislature mandated for buildings and appliances.
The Warren-Alquist Act of 1976 mandated that the California Energy Commission create a set of standards for new construction and remodeling and update those standards every three years to reflect the emergence of new technologies.
The newest revision took effect Jan. 1, but builders complain there is little to be gained from expensive new requirements that are driving up the cost of building a home and doing little to improve structures that are extremely efficient.
“Houses in California are already 50 percent more efficient than anywhere else in the United States, and now that we find out we’re subsidizing the San Francisco area with our energy bills, I think it’s clear the Central Valley has done its fair share,” said Matt Towery, owner of Towery Homes.
He was referring to a Kern County Board of Supervisors meeting last week at which a tax group said this area of the state’s excessively hot summers force Kern County residents to use a lot of power, pushing them into the utility’s most expensive rate tiers.
The California Energy Commission said much of the code is written in the “prescriptive approach,” which allows designers and installers to to select from various combinations of energy conservation measures based on climate zone and other factors.
The appliance and building standards have saved more than $56 billion in electricity and natural gas costs since 1978, said commission spokesman Adam Gottlieb. It’s estimated the standards will save an additional $23 billion by 2013.
“The rules and the regulations are done to benefit consumers and homeowners,” Gottlieb said. “Whether it’s better insulation or better roofing materials or whatever, all of these things have a positive impact on the consumer’s pocket.”
Builders counter that the newest rules on such things as ceiling, floor and wall insulation, and windows and fireplace installation are driving up the cost of a new home by as much as $4,000. This, at a time when the industry is already struggling with the city of Bakersfield’s recent doubling of traffic impact fees, and many families are hard pressed to come up with a down payment for a home in a weak economy.
“The energy code has been around for decades and we’ve had 15 to 20 percent increases in energy efficiency every two or three years,” said Pat Henneberry, vice president of home building at Castle & Cooke. “At some point, you reach a point of diminishing returns.”
David Cates, president of Lenox Homes, said he believes the standards have made new homes in California so efficient that revising the rules further has “virtually no impact” on energy usage.
“Really, at this point it should be voluntary, and the market should dictate changes, not government,” he said. “If somebody wants to build an inefficient home, let them try to find someone who wants to buy an inefficient home.
“Does the public care? No, not one bit. If you ask most consumers about energy usage, it’s not their first priority. What they care about is the price.”
Dave Walls, executive director of the California Building Standards Commission, said the state is always conscious that regulations sometimes make housing less affordable, but said all changes come down to balancing competing interests.
“Most of our rules have to do with health and safety,” he said. “If a building collapses in an earthquake and crushes someone, making subsequent buildings stronger is going to cost more. But how do you quantify that? Can you put a price on a human life?
“Any increase is going to have some impact. We don’t believe it would be to the extent that it would slow the recovery or prevent people from building in California.”
Single-family home building permits in Bakersfield increased more than 111 percent from 61 in January 2009 to 129 in January of this year, according to the city’s Building Division.
That’s due in part to state and federal tax incentives for new buyers introduced last year to spur the housing market and construction-related jobs.
“On the one hand they’re trying to stimulate the economy and create jobs, but homes are becoming less affordable and we’re having to lay people off,” Towery said.
And there’s more to come.
Starting next year, new homes will be required to have complete sprinkler systems, which builders estimate could add another $7,000 or so to the cost of a new house.
“Where does it end?” Towery said. “It just goes on and on.”
