Biden-Era Affordable Housing Energy Standards Voided by Judge

Biden-era regulations that updated the energy efficiency standards for the construction of agency-financed housing must be set aside, a federal judge said.

The Housing and Urban Development and Agriculture departments lacked the statutory authority to issue the 2024 rule, in violation of the Administrative Procedure Act, Judge Jeremy D. Kernodle of the US District Court for the Eastern District of Texas said in a Thursday order. Kernodle granted the plaintiffs summary judgment on those claims.

But the states and housing association that brought the suit aren’t entitled to summary judgment on their claim that the statutory provision directing the agencies to set energy efficiency standards is unconstitutional because the agencies delegated that power to private code bodies, Kernodle said.

Section 109 of the Cranston-Gonzalez Affordable Housing Act requires new housing to meet standards set by the International Energy Conservation Code and American Society of Heating, Refrigerating, and Air-Conditioning Engineers if the agencies failed to act by a certain deadline. The departments in 2015 published a final determination that standards set by those bodies wouldn’t negatively impact the availability or affordability of new construction, and that the codes would take effect.

The departments in 2024 issued another final determination adopting updated regulations, despite opposition from industry groups that criticized the agencies’ analysis and argued the cost of adopting the standards would limit affordable housing.

The statute doesn’t present a nondelegation issue because the agencies maintain their decision-making authority and “private bodies remain subordinate to them.” The statute also doesn’t violate the spending clause because it “includes clear standards by which states may measure their compliance,” the judge said.

But the 2024 determination conflicts with the affordable housing law and is therefore unlawful under the APA, Kernodle said.

The plain text of the statute authorizes the agencies to update standards only once, which occurred in 2015. The provision only allows for multiple updates if the agencies establish their own standards and follow certain procedures, the judge said.

The 2024 rule is also contrary to the law because the agencies themselves recognized that the new standards would reduce affordable housing availability by 1.5%, Kernodle said. Although the agencies assert it was a cautious, worst-case scenario estimate, they fail to explain how any positive effects of energy efficiency will offset the higher construction costs and decreased availability, the judge said.

Kernodle vacated and set aside the agencies’ 2024 determination.

Even though the administration also said it was considering reviewing the rule, that doesn’t warrant dismissal for lack of ripeness, Kernodle said. “An agency may always revise or revoke final agency action,” which isn’t enough to escape review under the Administrative Procedure Act. Although the administration extended some compliance deadlines until the end of this year, “buildings are not constructed overnight and often have long lead time,” the judge said.

St. John LLC represents the National Association of Home Builders.

The case is Utah v. US Dep’t of Hous. and Urb. Dev., 2026 BL 74528, E.D. Tex., No. 6:25-cv-00001, 3/5/26.