Tradeoff between making a stricter energy code for new homes and higher costs for buyers

While there is growing interest in more energy efficient homes, this doesn’t come without an upfront cost. This is illustrated by the debate in Illinois about how much new energy standards might add to the costs of new homes:

A new statewide building energy code that takes effect Jan. 1 strives to make homes more comfortable and residential energy bills less costly by making the building’s “envelope” tighter. The adoption of a substantial amount of the International Energy Conservation Code for homes puts Illinois at the forefront of such efforts among states.

But the updates to the building energy code, required by state law every three years, have not been without controversy. While proponents say the changes will increase the cost of a new home from $958 to $1,775 in Illinois, or about $1,500 in the Chicago area, detractors of the new rules peg that Chicago-area cost increase at $4,600, a sum they say will price some first-time buyers out of the market…

The changes won’t be obvious, and even the code’s proponents agree the upgrades in energy efficiency won’t be as easy to market to consumers as, say, granite countertops and crown molding.

They include upgraded insulation in attics and basements, more energy-efficient windows, upgraded bathroom vent fans, the use of some high-efficiency lights, insulated hot water lines to kitchens and air sealing around furnaces…

Supporters of the changes say consumers living in a Chicago-area home of 2,400 square feet with a basement should save an estimated $350 a year on their energy costs, compared with the current building regulations.

If these estimates about savings each year are correct, these code changes would be worthwhile over the the full lifetime of a home. However, how many homebuyers take this long perspective? In a mobile country, how many would be willing to pay upfront for costs from which they may not personally benefit?

This seems like the classic dilemma about a number of green products in the United States: will people pay upfront for savings down the road? It will be interesting to see how builders try to sell these code upgrades , massage the price points of home to account for these new costs, and also try to appeal to greener buyers overall.

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