North Central / Regional Reports

Mich. Energy Code Not ‘Cost-Effective,' Says Home Builders

LANSING, Mich. - The new residential energy code proposed by the Granholm administration will trap hundreds if not thousands of low and fixed income families in energy wasting older homes, according to the Michigan Association of Home Builders.

"Michigan's families will be poorly served by the governor's choice of energy codes," said Lynn Egbert, chief executive officer of the 11,000+ member association. "While the administration has claimed the average cost of compliance with its proposed energy code is $1,585, our examination of the code shows an average cost using the prescriptive path ranges from $4,000 to $6,000 per home depending on the style of the home. This unnecessary cost increase in the price of a new home will lock working Michigan families into energy-wasting older homes built to less efficient energy codes.

"The neediest segments of our citizens will be priced out of the market for a new home," Egbert added. "Construction costs today strain the budgets of not only low-income and fixed income families but of the heroes of our work force: the police, nurses, teachers, firefighters as well as other workers who hold our communities together. When they cannot find housing in the communities they serve, there is something dreadfully wrong. With the additional financial burden this code mandates, that housing will be increasingly difficult if not impossible to obtain. The administration needs to remember increases in the prices of new homes lead to increases in the prices of existing homes.

"It's not just about new homes. Additions and remodeling will also be harshly affected by this code." As an example, Egbert pointed to a homeowner who wished to replace a window or windows in an older home with the same style of window. "Under this code, unless the home has a formal historic designation, that old type window would have to be replaced by a modern vinyl low-e argon filled window out of keeping with the character of the home."

Michigan law requires any new energy code to pay back its costs in energy savings in seven years. "While the administration has claimed to meet this seven-year payback, our examination shows payback periods of 16 to 40 years, far outside what the law requires," Egbert said. He also noted the administration did two separate cost/benefit analyses. "The second came just this week after its first analysis from March 2004 used the wrong insulation requirements for walls in its calculations - the current code's R-13 rather than the administration's proposed R-21. R-21 walls will require a move to 2 x 6 construction with all of the additional costs that entails, costs the administration's first analysis ignored."

"The saddest thing is the Administration turned its back on a year and a half of hard and productive work by its own residential energy code review committee and did so after accepting its recommendations and telling the committee it wanted the new "consensus" energy code to go into effect by the end of 2003."

The Department of Labor and Economic Growth (DLEG) said in its November 2003 regulatory impact statement (RIS) on the consensus code that: "The committee that developed these proposed rules included ... all affected parties. ... The new energy code rules will ... be a substantial improvement ...will adequately address residential additions and alterations. ... will allow consumers to benefit from the most current technology related to energy conservation. ... update current standards for energy conservation in residential buildings and adopt an energy standard that is consistent with the Federal Energy Policy Act. ... (as well as) provide the most current method of design for energy conservation."

"It's important to note," said Egbert, "DLEG's own Residential Energy Code Committee did not vote to adopt the code the administration is mandating. The committee came to consensus on the proposal the department accepted and then unilaterally rejected. The administration never went back to its committee or formed a new one. The legislature did not vote to change the law to allow adoption of the code the administration is mandating and it won't be asked to. Instead, the new code will be imposed from above, destroying the leading cost-effective energy code in the country, and harming the very Michigan citizens it is said to serve."

The Michigan Association of Home Builders (MAHB) is a trade association representing builders, remodelers, owners, developers, and suppliers to the single family and multifamily residential construction industry.

Publication date: 02/07/2005

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