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Builders warn new codes will harm housing affordability

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Posted at 8:35 PM, May 05, 2022

COLORADO SPRINGS, Colorado — Colorado home builders are raising concerns about a bill that is advancing in the state legislature which they believe will significantly increase construction costs, and in turn, make buying a new home more expensive.

Meanwhile, Governor Polis and the bill's sponsors say that the new green building code requirements will actually save homebuyers money in the long run and help to reduce greenhouse gas emissions.

House Bill 22-1362, the Building Greenhouse Gas Emissions bill, would require builders to install electrical systems on all new homes that would make it easier for property owners to later install solar panels and electric vehicle chargers.

Homes built with natural gas-fueled heaters and appliances must also have hookups for their electrical counterparts.

The Colorado Public Interest Research Group, (CoPIRG) advocates for consumer and environmental issues. The group is lobbying in support of the legislation.

Executive Director Danny Katz explained that homes and commercial buildings produce a significant amount of greenhouse gas emissions.

"The majority of the homes and businesses in Colorado are fueled with gas, oftentimes for heat, sometimes for our appliances," Katz said.

He points out that retrofitting solar systems on an existing home comes with additional costs because of the electrical work that is required.

"It'll cost you $3,000 plus, it'll add significant cost to the project," estimated Phil Brodhagen, the founder of Peak View Solar.

His company has been working with Classic Homes in Colorado Springs to install solar-ready systems for buyers who want that option.

"Doing that while it's being constructed is an easier process for us and then it's ready when they move into the home," he said.

The Colorado Springs Home Builders Association warns that the new code requirements will end up costing home buyers much more.

"That will roughly add $12,000 to the cost of a home in Colorado Springs," said Chad Thurber, president of the CSHBA executive committee.

He explained that local building departments currently adopt code recommendations from groups like the International Energy Conservation Code (IECC). However, they are able to customize the recommendations in a way that serves the needs of the community.

House Bill 1362 takes away that local control away and sets the complete 2021 IECC code as the state minimum, and in some cases adopts the 2024 IECC code.

"Without having local control to adjust some of those codes to meet what our needs are here locally, we're not able to attack affordability or attainability for homes here in Colorado Springs," Thurber said.

State Senator Chris Hansen (D) Denver is a prime sponsor of the bill.
He said that focusing on the construction costs doesn't show the whole picture.

"Part of housing affordability is that you're building homes that are long-term going to be very efficient, because of course, you know, you might save a few dollars upfront but it's going to cost you thousands a year in additional utility bills, that's obviously what we want to avoid as well," Hansen said.

The Colorado Springs Chamber and EDC are lobbying against the bill. Executive Director Johnna Reeder Kleymeyer, said that housing affordability is already creating hurdles for attracting new companies to town.

"By adding additional fees and unnecessary regulation onto homeowners, homebuyers, we're actually impeding the ability for us to grow and grow smartly as a state," she said.

Reeder Kleyemeyer points to a 2021 Home Innovation Research Labs study that found that it could take home buyers decades to recoup the higher upfront costs through energy savings.

"Adding anywhere from $8,900 to almost $12,000 onto the initial cost of a home, but only with about $321 a year in energy savings, that math doesn't add up," she said.

Governor Polis and Thurber both said they are working together on amendments for the bill that address the housing affordability issues while still working to clean the air.

"The bill in its original form is probably what we were least excited about, but we are excited that Governor Polis and his office are trying to work with to find some compromise and try to meet in the middle," Thurber said.

"I know it's still in the work, I think some compromises have been reached with the home builders and others, but absolutely part of saving people money is saving people money on their utility bills," Polis said.

As of Thursday evening, lawmakers had passed roughly two dozen amendments to the original bill. Additional amendments are expected as debate begins in the senate.
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