How New Federal Policy Raises the Bar for Energy-Efficient Housing

In May 2024, the USDA and HUD updated minimum energy standards for new construction, requiring buildings under four stories to meet the 2021 IECC and taller buildings to meet ASHRAE/ANSI Standard 90.1-2019. The report argues that these standards, combined with 45L tax credits from the Inflation Reduction Act, make high-performance certifications like ENERGY STAR and Zero-Energy Ready Home (ZERH) financially attractive, particularly for all-electric construction in specific climate zones.

• The USDA and HUD updated minimum energy standards in May 2024, affecting over 40,000 new apartments annually. New buildings under four stories must comply with the 2021 International Energy Conservation Code (2021 IECC), while taller buildings must meet ASHRAE/ANSI Standard 90.1-2019.
• The updated standards are cost-effective; specifically, ASHRAE/ANSI Standard 90.1-2019 for high-rise multifamily buildings costs less than $20 per unit to implement and typically pays back in under two months. The 2021 IECC low-rise standard is cashflow-positive for residents within 18 months on average.
• Under the Inflation Reduction Act's 45L tax credits, multifamily developers paying prevailing wages can earn $2,500 per ENERGY STAR New Construction (ESNC) unit or $5,000 per Zero-Energy Ready Home (ZERH) unit. For ESNC, the credit typically covers incremental costs in most of the US, especially in climate zone 3A (Southeast US).
• The $5,000 45L incentive is estimated to more than cover the cost of ZERH certification in climate zones 2A (Gulf Coast), 2B (desert Southwest), and 3A (inland Southeast and coastal Carolinas), with potential nets of over $600 per unit in zone 2A.
• All-electric construction reduces costs compared to dual-fuel units. The median cost reduction for attaining ESNC certification for an electric unit is approximately $375, while the upside for ZERH units is around $1,400 per unit.

APA

RMI (2024). How New Federal Policy Raises the Bar for Energy-Efficient Housing. https://rmi.org/resources/how-new-federal-policy-raises-the-bar-for-energy-efficient-housing/

Chicago

RMI. How New Federal Policy Raises the Bar for Energy-Efficient Housing. 2024. https://rmi.org/resources/how-new-federal-policy-raises-the-bar-for-energy-efficient-housing/.

Wikipedia

{{cite report |author=RMI |title=How New Federal Policy Raises the Bar for Energy-Efficient Housing |date=18 June 2024 |url=https://rmi.org/resources/how-new-federal-policy-raises-the-bar-for-energy-efficient-housing/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{rmi2024how, author = {{RMI}}, title = {{How New Federal Policy Raises the Bar for Energy-Efficient Housing}}, institution = {RMI}, year = {2024}, month = jun, url = {https://rmi.org/resources/how-new-federal-policy-raises-the-bar-for-energy-efficient-housing/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }