The more something costs to produce, the less is produced. This is a basic principle of economics; one doesn’t need to have a Ph.D. to understand it. And yet, the folks running Kansas City seem to be struggling with it.
Since September 29, 2023, Kansas City has required new home builders to adhere to the most recent energy code standards, labeled 2021 IECC. In doing so, Kansas City leaped over a few previous iterations of the code, updated every three years. The result has been a drop in the number of new construction permits sought due to the dramatically higher cost of construction the new standards require.
As a recent article in the Kansas City Business Journal points out, “Through May — the most-recent data available — Kansas City approved 132 single-family permits across the three counties it covers. By that time last year, it had granted 480. The year before that, builders pulled 346 permits through May.”
Even that number is high, because it includes applications submitted before the new energy code standards were put in place. The actual number of single-family permits issued in Kansas City under the new energy code is 32.
Proponents of the new regulations argue they are necessary to increase energy efficiency and lower energy costs. Fair enough. But those savings come with their own costs of construction. It’s a trade-off. Public policy almost always presents us with such trade-offs. If policymakers want to increase energy efficiency without abruptly killing new home construction, they need to work on some sort of compromise. Ordinance 240434 is one such effort, but its consideration is being repeatedly put off. Regardless of the exact solution, Kansas City leaders need to show some urgency to fix this problem.
