Lacey takes issue with state’s new energy code, arguing it will drive up housing costs
Builders in South Sound and throughout the state are struggling to understand the new Washington state energy code.
The new energy code, which emphasizes energy efficiency, took effect this month and is now being ratified by local governments. The energy code applies to residential and commercial construction.
Builders say the new energy code requirements are confusing and expensive, an expense they say is only going to get passed on to buyers and renters, making housing even less affordable.
The state Building Code Council voted last month to delay the implementation of the code until July 1, but after that decision was appealed by another building organization, Gov. Jay Inslee agreed with the appeal and ordered the new code to take effect this month.
Now, Lacey City Council, struggling with an ordinance to implement the code, is going to ask the governor for its own delay. The council recently voted to send a letter to Inslee, a draft of which says the following:
“It is estimated that the energy code alone will add $10,000-$30,000 to the cost to new homes after February 1, 2021,” Mayor Andy Ryder writes.
“In Lacey, the need for affordable housing is more significant than ever. Unfortunately several factors are working against those efforts. The city recognizes that the new energy code will provide cost relief and utility savings long-term. However, the extra cost associated with the implementation of the energy code has short-term cost impacts to our residents purchasing new homes.”
The median price of a Thurston County single-family residence was $409,000 in January, up nearly 17 percent from the same period a year ago, according to Northwest Multiple Listing Service data.
“We talk about an affordable housing crisis, but we continually do things as a state and local jurisdictions to drive up the price of housing,” Councilman Lenny Greenstein said about the new energy code. “It makes absolutely no sense.”
How we got here
The building codes that took effect this month, including the energy code, were supposed to take effect in 2018.
Lacey building official Wade Duffy said state building codes are updated on a three-year cycle and typically are delayed in being implemented. The 2018 codes have taken longer than usual because of COVID-19, he said.
After the state Building Code Council voted in early January to delay the implementation, the Washington Association of Building Officials weighed in and sent a letter to the governor asking for the immediate repeal of the code council’s action.
The building officials pointed out that not only would their action delay the energy code, but those very codes tied to affordable housing, such as those needed for “tiny homes.”
“The new (tiny home) code will have several modifications to allow typical tiny home construction,” the building officials said in their Jan. 12 letter.
They also pointed out the energy code is tied to legislation that calls for a 70 percent reduction of energy consumption by 2030.
“The new energy code advances that initiative,” they said.
Gov. Inslee agreed. He repealed the code council’s decision and explained it in a letter to them.
“The implementation of the 2018 codes has already been delayed, due to the COVID-19 pandemic so as to allow builders, building officials, and other key stakeholders the opportunity to adjust and prepare to safely implement the codes,” Inslee wrote. “These delays, granted at the request of industry, allowed more time for individuals and local jurisdictions to receive safe training on the new codes as well as to shore up the necessary supply chains that had been compromised by the pandemic. But now, almost a year after the pandemic’s arrival in Washington and almost 18 months since the 2018 codes were originally adopted, there is no need for further delay.”
Olympia Master Builders Executive Officer Angela White said her organization initiated some training late last year to help builders understand the energy code rules, but all of it took place online and it wasn’t nearly as effective as having a daylong event in person where people can freely ask questions.
White supported the code council’s action to delay because builders are already dealing with so much, including the pandemic and its effect on the manufacture of building materials and lumber, both of which have gone up in price, White said.
A builder speaks
John Erwin of Olympia-based John Erwin Remodeling, a remodeler and custom home builder since the early 90s, employs 15 and is busy finishing up projects that began over the summer.
But now he has to look at new projects and determine the energy efficiency of each under the new code. Whether it’s a remodel or new home, each has a different set of criteria, depending on the size of the project, which is reflected as an “energy credit.”
The bigger the project, the more energy credits it needs, he said. Erwin fears he’s about to have some difficult conversations with his clients.
For example, he’s set to add 500 square feet to a rambler-style home. That addition is large enough to require energy credits, which he thinks will mean a new heating source for the home and its water. The problem? The owners just invested in a new natural gas furnace and hot water heater that likely will have to be replaced with an electric source of heat.
So after spending $6,000 on new equipment, the upgrade to an electric source to heat home and water might cost them $10,000, he said.
“It’s a tough one for me to sell to the homeowner,” Erwin said.
In another instance, Erwin is planning a much larger addition for a customer that will require even more energy credits. For this project, Erwin thinks he could satisfy the requirement with a solar array, although he estimates that cost at $12,000-$15,000. However, the homeowner has no interest in solar, he said.
“If we don’t do solar, I’m not sure we’re going to get our credits,” he said.
Erwin said builders are not simply going to absorb these additional costs. They will be passed on to the owner or renter, and though he acknowledged the savings tied to energy efficiency, the up front costs to purchase or rent will be higher.
The council
Lacey City Council voted 5-2 to send the letter to the governor, although Mayor Ryder, who voted in favor of it, cast doubt on whether it will actually make a difference.
Instead, Ryder called on the city to redouble its efforts at finding an affordable home solution for its residents.
Council member Malcolm Miller echoed Ryder’s comments, saying Thurston home prices of $350,000-$400,000 are out of reach for too many.
“We are telling them to go somewhere else,” he said.
Deputy Mayor Cynthia Pratt and council member Carolyn Cox voted against sending the letter.
Pratt said the building community has had time to adjust to the new energy code, and energy efficiency and affordability are not mutually exclusive.
“I’m not playing down the mayor’s concerns,” she said, “but I think we can address both at the same time and both are necessary.”
This story was originally published February 15, 2021 at 5:45 AM with the headline "Lacey takes issue with state’s new energy code, arguing it will drive up housing costs."
