Building code changes can have unintended consequences


“So what happens when building codes are tightened up to increase energy efficiency? Most real estate developers will whine that it means that the price of housing will go up and create hardship for younger and poorer buyers. But a new study from California, The Distributional Effects of Building Energy Codes, finds different results. The researchers looked at houses built on either side of the lines set in the California codes for different climate zones, which are therefore built to different code standards. They found that on houses built to a higher code standard, builders modified the house size and attributes rather than cranking house prices. Since they are competing in a market on both sides of the climate zone, the price of the house in the tougher zone actually fell, since, as we know, few people will willingly pay for energy efficiency, especially at the lower end of the market.”

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