The homebuilding industry, through its outsized influence in Salem, may prevent the state from meeting important greenhouse gas reduction goals.
According to a draft report from the Oregon Global Warming Commission last month, Oregon is “highly unlikely” to meet a greenhouse gas emissions reduction target established a decade ago.
“To be clear and to the point, Oregon has not made the progress envisioned in the (OGWC) Roadmap to 2020,” the report states. “We are not on track to meet our State’s 2020 greenhouse gas emissions reduction goal.”
While noting that the costs of inaction for Oregonians are “incalculable,” the commission’s report projects Oregon will also miss 2035 and 2050 goals established through Gov. Kate Brown’s executive order issued earlier this year.
Residential energy use and efficiency plays an important role in meeting those goals. Homes accounted for one-fifth of all energy-related carbon dioxide emissions nationwide in 2018, according to the U.S. Environmental Protection Agency. In Oregon, one-third of energy-related emissions come from residential and commercial buildings.
“Energy efficiency has been the cornerstone of Oregon energy policy for decades,” wrote Oregon’s Department of Energy in its 2018 biennial report to the Legislature.
But Oregon’s Building Codes Division, the state agency responsible for managing construction standards, works closely with the industry it regulates — so closely that it has a pattern of bending Oregon’s building codes toward helping the industry’s bottom line and away from lessening environmental impacts or protecting consumer safety when it costs builders money to do so.
STREET ROOTS NEWS: Kate Brown struck secret deal with Oregon homebuilders over wildfire codes, lobbyists say on tape
Brown’s sweeping executive order in March directed state agencies to reduce greenhouse gas emissions while prioritizing vulnerable populations and communities most impacted adapt to climate change.
The governor’s order came three years after the Building Codes Division was directed to significantly improve the energy efficiency of new homes by 2023 and ensure that new construction was solar panel ready by Oct. 1 of this year.
But division staff and state advisory board members appointed by Brown’s office have successfully undermined efforts to reach those goals, according to comments made during a Sept. 17 Oregon Home Builders Association meeting.
During the meeting, association lobbyist Mike Goodrich described how the Building Codes Division worked with state advisory board members who are affiliated with his employer to approve proposals critics called misleading to consumers and inadequate to keep the state on track toward emissions reduction targets.
After the same committee recommended “solar ready” standards aligned with currently existing incentive programs, a separate advisory board to the Governor’s Office — one with a homebuilders’ majority — rejected the proposal, and as a result, it was significantly watered down.
Jana Gastellum, who worked with Brown’s office on the solar-ready provisions of her executive order as the Oregon Environmental Council’s climate program director, agreed with solar industry representatives who said that the standards the Building Codes Division adopted fell short.
For example, they enabled new homes built with inadequate roof space or orientation to accommodate the installation of solar panels to still be considered “solar ready.”
“I do think it is misleading for the general public if you’re making a claim that the building codes will accommodate solar, only to find out that really it doesn’t,” Gastellum said.
A loophole
Oregon Home Builders Association’s leadership has long dominated decisions about how homes are built in the state. It’s an arrangement facilitated in part by the longtime head of the Building Codes Division, Mark Long, who walked into a top lobbyist position for the industry he used to regulate in February of this year.
Street Roots recently obtained secretly made audio recordings that captured lobbyists discussing an alleged deal with Brown to keep wildfire safety mandates for new residential construction out of statewide legislation. The recordings also revealed a multi-decade campaign by Long to stack advisory boards with industry allies and take advantage of Oregon’s preemption laws to “slow down the activities of the Portlands and Eugenes of the world.”
LISTEN: Clips of the audio obtained by Street Roots
Those “activities” include climate action plans that require regular updates to state energy codes in order to meet aggressive greenhouse gas reduction goals.
“Oregon must advance building codes this year,” Eugene Mayor Lucy Vinis wrote in a June 8 letter to the Governor’s Office.
Vinis joined five other mayors urging Brown to put pressure on the Building Codes Division to stick to its statutory requirement to update building codes every three years.
“Despite the clear call in your (executive order) to make progress with energy efficiency in building codes, your Building Code Division has proposed to delay the long anticipated residential code upgrade for 2020 until next year and has been noncommittal whether it will carry out the promised commercial code upgrade later this year,” she stated.
In public hearings two months later, the agency repeatedly downplayed criticism from energy efficiency experts who argued the agency was exaggerating how effective its proposed code updates would be at increasing energy efficiency, which would affect energy costs and emissions levels across the state.
It would also require a significant leap in building standards and methods in order to meet green building requirements included in Brown’s executive order.
“We’re confident with what’s been put forward — that it is a significant and substantive change in efficiency over the 2017 energy code,” said the Building Codes Division policy analyst, Mark Heizer, during an Aug. 25 code review committee meeting.
When the state’s energy department brought an “inadvertent loophole” in the code to Heizer’s attention during an energy stakeholder panel meeting in October, he acknowledged that the new minimum standard could be a step backward.
Essentially, the loophole allows builders to construct homes with higher energy costs and energy-related emissions compared with previous statewide minimum standards.
In response, Oregon Department of Energy’s efficiency and conservation manager, Warren Cook, voiced concerns that such a loophole could give Oregonians the impression that the state is “going backwards in some spaces.”
Heizer did not respond as of press time to questions about the status of his agency’s code change proposal and whether any changes would be made prior to rulemaking deadlines.
Unsustainable affordability
In a 2018 report to the Legislature, the Department of Energy identified the disproportionate energy costs for marginalized, low-income and rural households as one of “the most important energy issues facing Oregonians.”
This energy affordability gap, or “energy burden,” is estimated to total nearly $350 million a year statewide, according to a 10-year plan released by multiple state agencies the same year. A household that spends more than 6% of its income on energy-related costs is considered energy burdened.
Over a third of Oregonians – 521,937 households – were energy burdened last year, according to the department’s most recent report to lawmakers.
“In the middle of 412,633 acres of prime forestland, thousands of people are freezing every winter in Jackson County,” reads the website of the Jackson County Fuel Committee, a mutual-aid organization whose office burned down during statewide blazes that ravaged the southwest part of the state in September.
“Utility costs that take up to one-third of many people’s monthly income present the grim choice of cutting tight food budgets or cutting off the heat.”
But the homebuilding industry often points to the added construction costs of making homes more energy efficient as a reason not to mandate standards.
That’s because according to state law, any change to building codes must be justified with the finding that any added cost is necessary to the health and safety of occupants or the public, or to conserve scarce resources.
This is also why there are multiple statutory requirements that cost impacts be included with any code update proposal. But those costs are typically defined very narrowly, and the people responsible for determining whether a new regulation is economically justifiable often lack adequate information.
Despite completion of an executive-order-mandated cost analysis tool and protocol last year, state advisory board members who asked for additional cost details on building code changes at a Sept. 16 meeting were told by Building Codes Division Director Alana Cox that the agency relies on builders to provide that information.
“I feel ill-equipped to make a decision at this point because I have not seen any data on the cost of any of this,” said Emily Kemper, the only member on Building Code Division’s Residential and Manufactured Structures Board who represents consumers.
Cost-benefit analysis requirements for regulatory rulemaking originated as a theoretical justification to push back against a wave of environmental protection and health laws in the 1970s, said Amy Sinden, a professor of law at the Temple University Beasley School of Law in Philadelphia.
In an article last year, Sinden chronicled the campaign of conservative judges and revolving-door agency administrators to undermine studies showing Clean Air Act regulations produced billions of dollars in health care savings, far outpacing the upfront costs of pollution controls.
“(Industry lawyers and lobbyists) banked on the assumption that imposing a rigid system of cost-benefit analysis would weaken regulatory safeguards,” Sinden wrote, “because the benefits of public-health protections — preventing disease, saving lives, preserving ecosystems — would be hard to quantify and so inevitably undercounted in relation to the more easily quantifiable compliance costs to polluters, manufacturers of unsafe products, and so on.”
The residential construction industry’s own studies show that most builders believe the upfront costs to make homes more energy efficient, durable and comfortable are worth it — and that customers are willing to pay more for them.
According to a series of studies from Dodge Data & Analytics and the National Association of Home Builders, “over 80 percent of single-family builders and remodelers believe that the lower operating costs of a green home provide more value to the homeowner than the initial premium, and over half also believe that owners gain value from the greater comfort and better occupant experience.”
During a Sept. 22 panel convened by the Oregon Department of Energy, frontline community organizers and developers of unsubsidized affordable housing outlined economic disincentives to solving housing affordability issues that have plagued Oregon for decades.
“Cost effectiveness does not often support folks with lower incomes or the kinds of work that can be done to provide the most benefit for communities who are living in substandard housing,” said Oriana Magnera, climate and energy policy coordinator at Verde and a member of Oregon’s Global Warming Commission.
The vast majority of residences in Oregon are single-family detached homes. Approximately half of all homes were built before 1974, when the state introduced its first energy codes.
In a trade publication interview last December, Andrew Morphis, the chair of a green building council housed within the Portland Home Builders Association, pushed back on the rationale often used by builders to oppose added costs: affordability.
“The affordability argument … doesn’t tell the whole story when we’re talking about real issues that could impact people’s health and well-being, or long-term climate stability and environmental impact,” Morphis said. “The true costs of these impacts are externalized in our current dominant economic model, so we can’t always monetize the benefits of building a better home to even out the calculus.”
Board games
Homebuilders and their allies have long opposed efforts to measure and address the energy usage and greenhouse-gas emissions of homes.
When former Oregon Gov. Ted Kulongoski pushed mandating energy efficiency and greenhouse gas emission audits for owners selling or renting homes or commercial buildings in 2009, the Oregon Home Builders Association’s top lobbyist called the idea “silly.”
Long’s efforts to improve building energy efficiency earned him an appointment by Kulongoski as interim director of the state’s energy department in 2009, but he was soon put on paid leave amid a growing scandal that eventually toppled then-Gov. John Kitzhaber.
The Oregon Department of Justice dropped charges against Long, who was cleared of wrongdoing, after a botched criminal investigation led the department to pay Long and his attorneys — which included former Oregon Attorney General Dave Frohnmayer and his deputy — more than $1 million to settle a pending lawsuit against the state.
Before returning to the top position at the Building Codes Division, Long ushered a bill through the Legislature that reorganized the agency’s advisory board structure and consolidated his authority over energy codes, relegating the energy department to an advisory role.
“(Long) has always known the energy code piece is sensitive for builders and he loved to play politics more than anything,” said David Heslam, a leader among Oregon’s green builders and a longtime building codes stakeholder.
“Having energy codes jurisdiction at BCD gave him additional cards to play with a powerful lobby group when trying to impact policy and legislation in Salem,” Heslam said.
The Governor’s Office manages appointments to over 250 boards and committees across multiple state agencies and departments. Without revising state law, the composition of advisory boards that shape construction standards is unlikely to change.
Heslam said he would like to see more consumer representation on the boards, as well as greater diversity.
“Imagine boards that are comprised of industry representatives, the ones who build things, and representatives for those who will occupy them: renters, affordable-housing advocates, public health officials. And those who are trying to achieve a sustainable future like city sustainability officers,” he said.
“Those boards would not be rubber stamps. They could offer a chance for real discussion, and real decision-making about the very real issues that need to be tackled.”