A federal court has struck down energy-efficiency rules for federally financed housing that were introduced during the administration of Joe Biden, ruling that the agencies behind the standards exceeded the authority granted to them by Congress.
The decision came from U.S. District Judge Jeremy Kernodle in Texas, who sided with a coalition of 15 Republican-led states and a major homebuilders’ organization that had challenged the regulations. The lawsuit argued that the energy mandates would push construction costs higher and make affordable housing harder to build.
The rules had been issued in 2024 by the U.S. Department of Housing and Urban Development and the United States Department of Agriculture as part of a broader climate push tied to the policies of the Biden administration. They required new federally funded affordable housing projects to meet stricter energy standards covering insulation, windows, lighting systems, and heating and cooling equipment.
But the court concluded the agencies had already used their authority once before when they updated energy codes in 2015. Under the governing housing law, the judge said, the departments were only permitted a single revision of those standards. Because that authority had already been exercised, the 2024 update fell outside the scope of what the statute allows.
The ruling also emphasized another legal requirement: new energy standards cannot reduce the availability of affordable housing. According to the judge, the agencies’ own analysis indicated the regulations would shrink the supply of new affordable homes by roughly 1.5 percent — a result that undermined the rule’s legality.
A group of states spearheading the challenge, including Utah and Texas, had argued that compliance with the requirements could add tens of thousands of dollars to the cost of constructing a new home, making low-income housing projects less viable.
Officials from the United States Department of Agriculture signaled approval of the decision, saying the regulations had driven up housing costs in rural communities. The court’s ruling, they said, aligns with efforts by the administration of Donald Trump to reduce the financial burden associated with building homes in those areas.
Supporters of the energy standards had framed them as long-term savings for homeowners. Federal officials previously estimated the rules could improve energy efficiency by more than a third, potentially lowering household energy bills by hundreds of dollars annually and saving tens of thousands of dollars over the life of a typical mortgage.
The court’s decision wipes out the 2024 standards, leaving the earlier energy code framework in place for federally supported housing projects.
