Climate-friendly building regulations could “push homeownership out of reach” for some Massachusetts families without additional financial support, according to a new report from the the Home Builders & Remodelers Association of Massachusetts.
The report estimates that the state’s new “net zero” residential building code updates are likely to increase the cost of home construction by roughly 1.8% to 3.8% — adding about $10,000 to $23,000 to the median cost of a single-family home. The researchers also estimated a 2.4% rise in construction costs for large multi-family buildings.
State laws call for the state to reach its climate target of achieving net zero greenhouse gas emissions by 2050. Currently, more than one-quarter of carbon emissions comes from the building sector, according to the report, most through on-site combustion of oil and methane for heating residential and commercial buildings.
New state regulations seek to make these buildings more energy-efficient, by requiring reduced emissions from heating, and by looking at alternatives to decarbonize heating and cooling altogether.
But in the midst of a crisis of housing affordability and access across Massachusetts, energy-efficient homes are more expensive to build, leading to increases in home prices and decreases in housing production, the report found.
The median price for single-family homes in Massachusetts was $553,500 in April — 1.2% lower than the median price in April 2022 of $560,000, according to the Warren Group.
As of December, municipalities have been able to opt-in to more energy-efficient requirements of a new specialized stretch code. The building code updates are meant to encourage builders to shift away from fossil fuel heating in favor of electrification — estimated to save the state 500,000 tons of greenhouse gas emissions by 2030.
In a survey conducted by the reports’ researchers from the MIT Center for Real Estate and Wentworth Institute of Technology, homebuilders identified what they called “obstacles” to the construction of more affordable, energy-efficient housing.
They said restrictive land use rules, permitting delays, a lack of clarity around financial incentives, a shortage of workers skilled in green home building and continued supply chain issues have made it more challenging to build new residential units that both met the state’s climate targets and are affordable for working and middle class families.
“The economic modeling here shows that these increases in construction costs could push the median single-family home in Massachusetts out of reach for between 15,000 and 33,000 households, before taking into account any public financial incentives for green building. The increased energy efficiency of homes will potentially offset some of the increase in construction costs, but not all,” the report says.
— Sam Drysdale / State House News Service