Housing First Minnesota warned lawmakers this week about the impact of Minnesota’s upcoming residential energy code changes during a House Workforce & Labor committee hearing at the State Capitol. Despite these efforts, a bill to address the issue failed to advance out of committee on a party-line vote, with seven Republicans voting for and seven Democrats voting against.

Environmental Groups Mount Coordinated Push

Ahead of the hearing, environmental and energy advocacy organizations mounted a full blitz urging lawmakers to move forward with increasingly aggressive residential energy code mandates.

A coalition of groups submitted numerous letters to the committee arguing that stronger building codes are necessary to reduce energy use and help Minnesota meet its climate goals. Several organizations also claimed that stronger energy codes would have little to no impact on the cost of building a home.

Housing First Minnesota pushed back strongly on those claims.

Environmental groups claimed that stronger energy codes would not restrict new construction—ignoring evidence from other cities and states where similar mandates have caused significant slowdowns and even complete halts in residential permitting.

Builders across Minnesota know firsthand that every new mandate added to the building code carries a cost.

Eric Boyd, north region president at ARCXIS, noted in his testimony that there have been six-month permitting delays and $10,000-$30,000 cost increases per home in Washington. In Kansas City, the 2024 code was adopted and met with a six-month halt on the issuing of permits before an eventual repeal of the code.

Housing First Highlights Affordability Risks

In its letter to lawmakers and in testimony during the hearing, Housing First Minnesota warned that Minnesota is already on a statutory path toward significantly more aggressive residential energy codes in the coming years.

Nick Erickson, senior director of policy, noted in his testimony, “in the next decade, we will see the energy code become the number one cost driver in Minnesota.” These policies risk adding substantial costs to new homes at a time when housing affordability is already under severe pressure.

As Mark Foster, vice president of legislative & political affairs wrote in his testimony to the committee:

“Maintaining the state statute as it currently stands will likely lead to significant increases in construction costs, with many homebuyers unlikely to realize a meaningful return on investment from those additional expenses.”

Minnesota builders support improving energy efficiency and have already delivered dramatic improvements in home performance over the past two decades. Homes built today are significantly more energy efficient than those built just a generation ago.

But piling additional mandates onto the building code without accounting for affordability risks making Minnesota’s housing shortage even worse.

A Growing Divide at the Capitol

The hearing highlighted a growing divide at the Legislature between climate policy goals and housing affordability.

Environmental advocacy groups are pushing for faster and more aggressive building code mandates as part of the state’s climate agenda.

Builders and housing providers are warning lawmakers that policymakers must also consider the real-world consequences of those policies—particularly at a time when Minnesota already faces a severe housing shortage.

Housing First Minnesota emphasized that improving efficiency should not come at the expense of homeownership opportunities for Minnesota families.

Bill Fails to Advance

Following testimony and committee discussion, the bill failed to advance out of committee on a party-line vote.

While the proposal will not move forward at this time, Minnesota’s residential energy code will continue to evolve through the state’s rulemaking process, meaning the debate over costs, mandates and housing affordability is far from over.

Housing First and CMBA Will Continue to Advocate for Balance

CMBA thanks our local State Representative Shane Mekeland for carrying this bill. Housing First Minnesota and CMBA will continue working with lawmakers and regulators to ensure energy efficiency improvements are implemented in a way that protects housing affordability and preserves homeownership opportunities for Minnesota families.

Minnesota families deserve homes that are both efficient and attainable—and CMBA will continue fighting to ensure policymakers don’t lose sight of that reality.