Federal judge rules against Biden-era housing regulation that critics said would raise costs for new home construction
Austin, Texas – Texas Attorney General Ken Paxton announced that a federal court has struck down a Biden-era regulation that supporters of the lawsuit argued would have increased construction costs and reduced the availability of affordable homes.
The ruling came from the U.S. District Court for the Eastern District of Texas after a legal challenge brought by a coalition of 15 states along with the National Association of Home Builders. The coalition relied on Paxton to present arguments in court challenging the federal policy.
According to officials involved in the lawsuit, the rule had been issued in 2024 by the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture. The regulation required newly built homes that receive certain types of federal housing financing to meet much stricter energy-efficiency standards.
Court Blocks Federal Energy Efficiency Housing Rule
The regulation would have affected homes financed through programs such as FHA-insured mortgages, USDA rural housing loans, and several other federally supported housing programs. Builders working on these homes would have been required to comply with new building standards aimed at improving energy efficiency.
Those requirements included installing stronger insulation, higher-efficiency windows, tighter building envelopes, and upgraded heating and cooling systems. According to the lawsuit, the changes would have increased construction expenses and could have made it more difficult for developers to build homes at prices affordable for many buyers.
Paxton and the coalition argued in court that the rule conflicted with federal housing law. Under existing federal statutes, new energy standards can only be adopted if they do not negatively affect the affordability or availability of housing.
The court ultimately agreed with that argument. In its decision, the court determined that the federal agencies involved had exceeded their authority when they imposed the updated standards in 2024. The ruling concluded that the agencies did not have the statutory power to require the new energy-efficiency codes for housing financed through federal programs.
As a result of the decision, the 2024 energy standard has been vacated and is no longer in effect.
Paxton described the outcome as a major victory for homebuyers and builders who were concerned about the possible financial impact of the rule.
“The Corrupt Biden Administration’s radical policies were reducing the availability of affordable homes and making it harder for Americans to achieve the dream of homeownership,” said Attorney General Paxton. “This ruling is a major victory for homebuyers, builders, and families and helps protect access to affordable housing.”
Supporters of the lawsuit argued that if the regulation had remained in place, builders would have faced higher costs when constructing homes that rely on federal mortgage programs or housing assistance. Those costs, they said, could have been passed on to buyers, making it more difficult for families to purchase homes.
With the court’s decision now in effect, the stricter energy standards will no longer apply to federally financed housing projects under the challenged rule.
The case marks a notable legal battle between state officials, industry groups, and federal agencies over how energy policies intersect with housing affordability. Supporters of the ruling say it preserves access to affordable housing, while the debate over energy efficiency requirements in residential construction continues across the country.
