Report on Michigan’s Proposed Home Energy Efficiency Standards and Sustainable Development Goals

1.0 Introduction: Balancing Sustainability and Affordability

A legislative and legal conflict is underway in Michigan concerning the adoption of updated energy efficiency standards for new home construction. The state’s proposal to implement the 2021 International Energy Conservation Code (IECC) is currently stalled due to a lawsuit from the construction industry. This situation highlights a critical tension between advancing several United Nations Sustainable Development Goals (SDGs), including SDG 7 (Affordable and Clean Energy), SDG 11 (Sustainable Cities and Communities), and SDG 13 (Climate Action), and addressing immediate concerns about housing affordability.

2.0 Energy Efficiency, Climate Action, and Economic Benefits

The proposed code update is projected to yield significant benefits aligned with key SDGs. State regulators and environmental advocates emphasize the long-term advantages for homeowners and the environment.

2.1 Contribution to SDG 7 (Affordable and Clean Energy) and SDG 13 (Climate Action)

• Energy Savings: A U.S. Department of Energy study indicates that new homeowners would save approximately 10.7% on energy costs, equating to $396 annually.
• Carbon Reduction: The adoption of the new standards is estimated to cut statewide carbon dioxide emissions by 44,850 metric tons in the first year alone, directly supporting climate action targets.
• Technical Requirements: The proposed standards mandate specific improvements to achieve these goals:
  1. Increased ceiling and basement wall insulation.
  2. Tighter air seals around windows and ceilings.
  3. Rigid foam insulation on all exterior walls.
  4. Exclusive use of LEDs for all light sources.

2.2 Contribution to SDG 8 (Decent Work and Economic Growth)

• Job Creation: The federal government estimates the changes could create 10,000 jobs over 30 years by stimulating construction activity and increasing homeowners’ disposable income.
• Long-Term Savings: Over a 30-year period, homeowners could realize net savings of approximately $7,300, contributing to household economic stability.

3.0 Challenges to Sustainable Housing and Infrastructure

The primary opposition, led by the Home Builders Association of Michigan, argues that the proposed code update negatively impacts housing affordability and represents a flawed regulatory process, creating a conflict with SDG 11 (Sustainable Cities and Communities).

3.1 Economic Barriers and Housing Affordability (SDG 11)

• Upfront Costs: A federal study estimates the new code could add up to $5,000 to the upfront cost of a single-family home.
• Impact on Housing Shortage: The construction industry contends that these increased costs will exacerbate Michigan’s ongoing housing shortage by making new homes less affordable.
• Legal Action: The Home Builders Association of Michigan and the Michigan Manufactured Housing Association have sued the Department of Licensing and Regulatory Affairs (LARA), alleging the update is too costly and violates rulemaking procedures.

3.2 Regulatory and Policy Disputes (SDG 9: Industry, Innovation, and Infrastructure)

• Delayed Updates: Michigan is legally required to update building codes every three to six years but is currently two years behind schedule, using a code based on the 2015 IECC.
• Cost-Effectiveness Disagreement:
  • The construction industry cites a Department of Energy finding of a “simple payback” period of just under nine years, which they argue is not cost-effective.
  • State regulators argue that when spread over a 30-year mortgage, homeowners see a positive cash flow within two to six years.
• Alternative Proposals: Homebuilders advocate for skipping the 2021 IECC and adopting the 2024 IECC, which they claim offers more flexibility and removes certain mandates.

4.0 Broader Context: Addressing Sustainable Urban Development (SDG 11)

Housing policy experts suggest that while energy codes contribute to costs, they are not the primary driver of the housing shortage. The focus should be on broader regulatory reforms to foster sustainable and inclusive communities.

4.1 Primary Barriers to Affordable Housing

• Restrictive Zoning: Policies that mandate large minimum lot sizes are identified as a major impediment.
• Land Use Restrictions: Prohibitions on building apartments on commercially zoned land limit housing supply.
• Building Requirements: Mandates such as requiring two stairwells in small buildings increase construction costs unnecessarily.

4.2 Proposed Solutions for Sustainable Communities

To effectively address the housing crisis in alignment with SDG 11, experts recommend that Michigan consider policy reforms enacted in other states.

1. Allowing construction of homes on smaller lots.
2. Facilitating the conversion of empty office spaces into residential apartments.
3. Permitting the construction of accessory dwelling units (ADUs) on residential properties.
4. Eliminating minimum lot size and off-street parking requirements, as recommended by the Michigan State Housing Development Authority.

Analysis of Sustainable Development Goals in the Article

1. Which SDGs are addressed or connected to the issues highlighted in the article?

The article on Michigan’s home energy efficiency standards touches upon several Sustainable Development Goals (SDGs) by highlighting the interconnectedness of environmental protection, economic development, and social well-being.

1. SDG 7: Affordable and Clean Energy
   • The central theme of the article is improving energy efficiency in new homes. This directly relates to ensuring access to affordable, reliable, sustainable, and modern energy for all. By mandating better insulation and energy-saving materials, the proposed code aims to reduce energy consumption in the residential sector.
2. SDG 11: Sustainable Cities and Communities
   • The article discusses the construction of new homes, housing affordability, and building codes, which are core components of making cities and human settlements inclusive, safe, resilient, and sustainable. The debate between the long-term energy savings for homeowners and the immediate increase in construction costs directly impacts the goal of providing affordable and sustainable housing.
3. SDG 13: Climate Action
   • A key argument for adopting the new energy code is its environmental benefit. The article explicitly states that the changes would “cut statewide carbon dioxide emissions by 44,850 metric tons in the first year.” This demonstrates a direct link to taking urgent action to combat climate change and its impacts by reducing greenhouse gas emissions from the building sector.
4. SDG 8: Decent Work and Economic Growth
   • The economic implications of the new code are discussed, including job creation and increased disposable income. The article mentions a federal government estimate that the changes “could create 10,000 more jobs by spurring more construction and increasing homeowners’ disposable income over the next 30 years,” connecting the policy to promoting sustained and inclusive economic growth.
5. SDG 16: Peace, Justice and Strong Institutions
   • The article details a conflict between a state regulatory body (LARA) and industry associations, which has resulted in a lawsuit and a delay in implementing regulations. It notes that “State law says Michigan is supposed to update its building codes every three to six years, meaning LARA is already two years behind schedule.” This highlights challenges related to the effectiveness, accountability, and transparency of institutions in implementing public policy and adhering to legal mandates.

2. What specific targets under those SDGs can be identified based on the article’s content?

Based on the issues discussed, several specific SDG targets can be identified:

1. Target 7.3: By 2030, double the global rate of improvement in energy efficiency.
   • The entire premise of adopting the 2021 International Energy Conservation Code (IECC) is to significantly improve the energy efficiency of new homes in Michigan. The article states the new code would save new homebuyers “10.7% in energy costs,” which is a direct measure of improved efficiency.
2. Target 11.1: By 2030, ensure access for all to adequate, safe and affordable housing and basic services and upgrade slums.
   • The homebuilders’ argument centers on this target. They claim the “increased upfront cost of transition to the new code could be as much as $5,000 per single-family home,” which they argue could “stifle the state’s efforts to build more affordable homes” and conflict with addressing an “ongoing housing shortage.”
3. Target 13.2: Integrate climate change measures into national policies, strategies and planning.
   • The state’s attempt to update its building code to the 2021 IECC is a clear example of integrating climate change mitigation measures into state-level policy and planning. The reduction of carbon dioxide emissions is a primary goal of this policy integration.
4. Target 8.4: Improve progressively, through 2030, global resource efficiency in consumption and production and endeavour to decouple economic growth from environmental degradation.
   • The proposed code promotes resource efficiency by reducing the energy consumed over a home’s lifetime. The article highlights that this policy could lead to both environmental benefits (reduced emissions) and economic growth (job creation, increased disposable income), aligning with the goal of decoupling growth from environmental impact.
5. Target 16.6: Develop effective, accountable and transparent institutions at all levels.
   • The article points to institutional challenges. The fact that the regulatory body, LARA, is “already two years behind schedule” on a legally mandated update, and the subsequent lawsuit filed by industry groups, indicates a struggle in the effectiveness and accountability of the institutional process for updating state regulations.

3. Are there any indicators mentioned or implied in the article that can be used to measure progress towards the identified targets?

Yes, the article provides several quantitative and qualitative indicators that can be used to measure progress.

1. Indicators for Target 7.3 (Energy Efficiency):
   • Percentage of energy cost savings: The article specifies that the new code would lead to a “10.7% in energy costs” savings for new homebuyers.
   • Monetary savings per household: Progress can be measured by the “$396 in annual utility bill savings” and the net savings of approximately “$7,300 over 30 years.”
2. Indicators for Target 11.1 (Affordable Housing):
   • Upfront construction cost increase: The article provides a specific figure of “as much as $5,000 per single-family home” as an indicator of the potential negative impact on affordability.
   • Payback period: The disagreement over how to measure cost-effectiveness provides two indicators: the “simple payback” period of “just under nine years” and the “positive cash flow within two to six years” when viewed over a 30-year mortgage.
3. Indicators for Target 13.2 (Climate Action):
   • Greenhouse gas emissions reduction: A direct indicator is the projected “cut [in] statewide carbon dioxide emissions by 44,850 metric tons in the first year.”
   • Policy adoption: The adoption of the “2021 International Energy Conservation Code” serves as a policy-based indicator of integrating climate measures.
4. Indicators for Target 8.4 (Resource Efficiency and Economic Growth):
   • Job creation: The potential to “create 10,000 more jobs” over 30 years is a key indicator of economic growth.
   • Increase in disposable income: The annual savings on utility bills directly translates to increased disposable income for homeowners, an indicator of economic benefit.
5. Indicators for Target 16.6 (Effective Institutions):
   • Adherence to regulatory schedules: The fact that the state is “two years behind schedule” on its mandated code update is a negative indicator of institutional effectiveness.
   • Legal challenges: The existence of the “lawsuit filed in June by representatives of the construction industry” serves as an indicator of conflict and challenges within the institutional framework.

4. Table of SDGs, Targets, and Indicators

Source: greatlakesecho.org