The Biden administration’s upcoming rules requiring stricter energy efficiency standards for mobile homes will raise costs for low-income homebuyers while failing to meaningfully limit emissions, industry experts told the Daily Caller News Foundation.
The Department of Energy’s (DOE) rules — set to go into effect May 31, one year after they were finalized — update insulation and sealing requirements among other efficiency standards for mobile homes, formally known as manufactured homes, which the agency estimates could save the average consumer between $177 to $475 per year on utilities while boosting average manufactured home prices by $4,100 to $4,500. The rule will have an “adverse” impact on low-income homebuyers via increased prices — the median household income for manufactured homeowners is $35,000, according to the Manufactured Housing Institute — but will likely have a “negligible” effect on carbon emissions, Jonathan Lesser of the Manhattan Institute told the DCNF.
“According to the DOE’s own estimates, over a 30-year period, the new rule will reduce CO2 emissions by 80.4 million metric tons,” Lesser noted, citing the DOE’s regulatory analysis. “By comparison, according to the 2022 BP Statistical Review of World Energy, US energy-related CO2 emissions were 4.7 billion metric tons. So, over a 30-year period, the new rule will reduce CO2 emissions by the equivalent of 150 hours of US emissions in 2022. … Obviously, this rule will have zero impact on climate.”
At the same time, the elevated prices will further hinder homeownership affordability that “is already near a record low,” Heritage Foundation economist E.J. Antoni told the DCNF. While home prices did fall for the first time in over a decade in March, prices are still much higher than historical averages and, combined with elevated mortgage rates, are a major factor in declining home sales, according to the National Association of Realtors.
“Not only does [the DOE rule] increase the upfront cost of buying a home for lower-income families, but by the time these additional costs pay themselves off, a new generation of heating and cooling equipment will likely be available, which will use less energy,” Antoni told the DCNF. “That means the energy savings over the life of the home will not be as high as projected.”
Lesser characterized the rule as seemingly having been “designed to force more low-income consumers into rentals, rather than being able to own their own homes.”
Energy Secretary Jennifer Granholm argued in the agency’s press release finalizing the rule that it would help homeowners save money on utilities while benefiting the environment.
“The rules will hold manufacturers of these U.S. homes to cost-saving efficiency standards, giving residents more comfortable living environments and a much-needed break on their annual utility costs, while delivering cleaner air for their communities,” said Granholm.
The Manufactured Housing Institute (MHI) and Texas Manufactured Housing Association (THMA) filed a lawsuit in February, alleging that the one-year compliance date was “arbitrary, capricious, and impracticable.” The organizations also alleged that the the agency failed to consult with the Department of Housing and Urban Development (HUD), and failed to balance the affordability of manufactured homes and energy efficiency.
The MHI directed the DCNF to its press release announcing the lawsuit, while the THMA did not immediately respond to a request for comment.
“As we have consistently demonstrated, the industry very much wants to work with DOE and HUD to find a workable and affordable solution but under the current status, we are being forced to possibly halt construction of homes in many regions or manufacture homes that cannot comply with the new DOE standards,” MHI CEO Lesli Gooch said in the statement. “With the deadline approximately 100 days away, and continued lack of clarity from DOE, legal action was the only option available.”
The rule could also have the side effect of encouraging people to stay in older, cheaper homes that are lacking in other modern safety and efficiency features, Jason Sorens, an economist who studies housing at the American Institute for Economic Research, told the DCNF. Housing has increased in quality “significantly” in recent decades and the government “shouldn’t be discouraging that transition,” Sorens said.
“Moderate-income households who would otherwise buy new manufactured homes will be pushed into buying used homes, renting, or tightening their belts to afford a new home that meets the rule,” Sorens told the DCNF. “In general, command-and-control environmental rules like this one that mandate a specific technology are out of favor with economists. It’s far better to price energy appropriately and let consumers make up their own minds how they want to be more efficient.”
The DOE did not immediately respond to a Daily Caller News Foundation request for comment.
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