Federal Court Strikes Down New Energy Efficiency Standards

The U.S. District Court for the Eastern District of Texas recently struck down Biden-era energy efficiency standards adopted by HUD and USDA.  The ruling vacated the agencies’ 2024 Final Determination, which would have required new single-family and multifamily homes financed through certain HUD and USDA programs to comply with the stricter 2021 International Energy Conservation Code and 2019 ASHRAE 90.1 standards.

The lawsuit, that was brought by attorneys general from 15 states and a national home builders group, successfully argued that the new standards exceeded the agencies’ statutory authority.  Specifically, the agencies were authorized to update the energy standards only once, which was previously done in 2015, and the agencies were not authorized to adopt new energy efficiency standards if the standards would negatively affect the availability of new affordable-housing construction.  The agencies’ own findings demonstrated that the new standards would reduce affordable housing availability by 1.5 percent.

As a result, the judge vacated and set aside the 2024 Final Determination.  This decision halts enforcement of the new energy efficiency standards under certain HUD and USDA programs.  It also provides immediate relief to builders, rural communities, and families relying on certain federally supported housing programs while reinforcing limitations on regulatory oversight.