North Carolina’s building code for energy conservation is nowhere near as strict as California’s. A new working paper suggests this is a good thing if we care about living conditions for people with low incomes.
stricter codes create a non-trivial reduction in homes’ square footage and the number of bedrooms at the lower end of the income distribution. On a per-dwelling basis, we observe energy use reductions only in the second lowest income quintile, and energy use per square foot actually increases in the bottom quintile. Home values of lower-income households fall, while those of high-income households rise. We interpret these results as evidence that building energy codes result in more distortions for lower-income households and that decreases in square footage are responsible for much of the code-induced energy savings.
Something to keep in mind when people advocate for a living wage—easing regulatory burdens can reduce the cost of living without the negative effects of mandatorily higher wages.
