A coalition of housing and real estate organizations is calling on Minnesota regulators to preserve home affordability in the state’s forthcoming residential energy code update.
Housing First Minnesota led the coalition, submitting a formal letter in May to the Minnesota Department of Labor and Industry (DLI), urging the agency to incorporate key provisions from the 2024 International Energy Conservation Code (IECC) while protecting affordability — a statutory requirement.
The letter requested that the state retain performance path options, maintain current efficiency standards and adopt specific technical amendments, including revisions to HVAC design temperatures and rules regarding thermally isolated rooms.
Two performance-based compliance paths, the Energy Rating Index (ERI) and Simulated Performance Alternative, are widely used by Minnesota homebuilders. Eliminating them would disrupt the state’s housing market, where most new homes are currently constructed under the performance path model.
The call to action comes in response to a 2023 law passed by the Minnesota Legislature that requires the state to go beyond the IECC’s base standards. Housing advocates say the legislation removed affordability as a core consideration in the energy code; a move they argue will significantly increase construction costs. The law could raise the cost of new homes by more than $40,000 by 2038.
Minnesota already has the highest new home prices in the Midwest. Combined with ongoing housing shortages and a decline in residential permits, stakeholders say the added costs would deepen the state’s housing crisis.
“Repeatedly hearing proposals that either are out of scope or fail to reach the threshold for rulemaking in Minnesota has led to hours of time lost in hearings,” the coalition wrote, emphasizing that Minnesota remains the most energy-efficient mid- to high-volume housing state in the country.
The coalition’s proposed approach aims to maintain a baseline for energy efficiency while allowing DLI to shift focus toward long-term durability standards. It also calls for enhanced training and communication between builders and code officials.
The letter was co-signed by several key industry groups, including Minnesota Realtors, the Builders Association of Minnesota, Central Minnesota Builders Association, Rochester Area Builders, Northern Minnesota Builders Association, Building Industry Association of the Red River Valley, Vikingland Builders Association and Minnesota River Builders Association.
The next version of Minnesota’s Residential Energy Code is expected to take effect in 2027.