CMBA has joined other organizations in sending a letter to the Minnesota Department of Labor & Industry regarding the 2024 Residential Energy Code adoption, and copying key legislators. The new code, which will go into effect in 2027, will be a massive change for all parties and the first of many sharp cost increases that will price out a significant number of home buyers in Minnesota over the coming decade.

During the 2024 Minnesota Legislative Session, one of the massive omnibus bills included a provision that requires:

• New residential energy codes every three years (instead of six)
• A 70% increase in efficiency by 2038, regardless of the cost or what the IECC says

This law will fundamentally change how we build homes in Minnesota, and make our average new home cost gap even worse (Minnesota is already the costliest in the region).

The letter asks the Commissioner of the Minnesota Department of Labor and Industry (DLI) to close-up rulemaking and adopt the 2024 IECC without any Minnesota-specific changes to the efficiency of new homes (which under the new law cannot be weakened, only strengthened) and to keep both performance paths intact.

The letter reads, in part:

"This law, which also mandates perpetual rulemaking via a three-year code cycle, at present technology and costs will add roughly $45,000-50,000 to the cost of new homes in Minnesota by 2038, according to an analysis by Minnesota builders. Minnesota’s new homes are already the costliest in the region. They are also the most efficient homes in the nation on volume for the past decade, according to RESNET.

In addition to the affordability challenges in our state, Minnesota’s housing shortage has roughly doubled since 2018, when the state’s Housing Task Force called for immediate action to address a then-50,000-unit housing shortage. Today, that number nears 100,000 units (four years of construction activity in Minnesota) amid declining permitting.

Adding to the cost of housing at this magnitude will exacerbate the state’s housing crisis. According to data from the National Home Builders Association, this increase will price more than 93,000 households out of the new home market, exacerbating the demand placed on existing homes."

For more information, contact:  Steve Gottwalt, CMBA Government Affairs, steve@cmbaonline.org, 952-923-5265

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