The evolving landscape of policy developments in building construction across the United States signals a transformative era in how we approach the design, performance, and sustainability of the built environment. While the federal government continues to play a crucial role in establishing nationwide standards and incentives, the efforts at state and local levels are equally significant, ensuring that innovation in high-performance green buildings is realized not just as a federal mandate but as a deeply rooted movement embedded in the fabric of American infrastructure. This multilayered engagement reflects the collaborative drive between legislators, environmental advocates, builders, and property developers toward a shared vision of decarbonized, resource-efficient construction.
As the fiscal year 2026 appropriations process unfolds, federal support for environmentally responsible programs like ENERGY STAR remains a focal point of bipartisan interest. Congress has taken significant steps to preserve this critical initiative under the U.S. Environmental Protection Agency, especially after past proposals sought to eliminate its funding entirely. In a promising turn, the House Appropriations Committee recently approved language mandating the EPA allocate no less than $32 million to the program. The Senate Appropriations Committee advanced this momentum by adopting bill text that requires $36 million in ENERGY STAR funding, placing enforceable provisions on the agency if the bill passes. Though uncertainty persists about whether Congress can finalize these appropriations or must pivot to a continuing resolution, this early action is a clear demonstration of broad-based support. Constituents across the nation are encouraged to voice their approval to sustain this vital effort, emphasizing the need for high-performance building practices that simultaneously conserve energy, reduce emissions, and lower utility costs.
Parallel to these funding commitments is the recalibration of minimum energy codes for housing subsidized by the U.S. Department of Housing and Urban Development and the U.S. Department of Agriculture. In a decisive shift last year, the agencies adopted the 2021 International Energy Conservation Code and ASHRAE Standard 90.1-2019 for all new construction financed through their programs. These updates represented a substantial leap from prior standards, offering more stringent benchmarks that align with contemporary performance expectations and energy savings goals. The determination then concluded that such adoption would not hinder the affordability or availability of housing units, a common concern when introducing stricter energy measures. In fact, enhanced energy codes can provide long-term cost savings for occupants and increase the resilience of housing stock, especially in economically vulnerable communities.
However, the re-opening of this decision under the Trump administration has reintroduced a degree of uncertainty. A fresh comment period has been initiated, inviting stakeholders, particularly those with field experience in green building or multifamily residential development, to contribute insights by August 6. These public comments will help shape the administration’s final decision on whether to maintain or roll back these energy efficiency mandates. With escalating energy costs and climate pressures, preserving the 2021 IECC and ASHRAE 90.1-2019 represents a crucial step in advancing affordable and sustainable housing, and organizations like the U.S. Green Building Council (USGBC) are mobilizing to ensure that voices advocating for environmental stewardship are heard and heeded.
In tandem with code reconsiderations, the U.S. Department of Housing and Urban Development has also announced a potential policy shift that could severely impact the economics of energy-efficient building development. A recent notice from HUD proposed the elimination of the green mortgage insurance premium rate category within its Federal Housing Administration multifamily loan programs. This category, offering preferential rates for projects meeting recognized green certification benchmarks like LEED, has long served as a financial incentive for developers to integrate energy-efficient and resilient features into their properties. The rationale for preserving this incentive is straightforward: green buildings not only reduce operational costs but also decrease the risk of loan defaults due to improved building performance and occupant satisfaction.
By stripping this incentive, the policy threatens to disincentivize investments in energy efficiency, particularly for developers working within tight financial margins or navigating the complexities of affordable housing finance. The USGBC has submitted formal comments urging HUD to reconsider, underscoring the interconnected benefits of environmental performance, housing affordability, and financial prudence. This development is a key flashpoint in the broader debate over how federal programs can and should promote sustainability in the construction industry, particularly when affordability is at stake.
Another significant recent federal action was the passage of the One Big Beautiful Bill Act on July 4. Signed into law by President Donald Trump, the legislation terminated a variety of tax incentives and grants connected to green building and clean energy infrastructure. These included supports for energy-efficient home construction, installation of electric vehicle charging stations, and on-site renewable energy projects like solar and wind. Furthermore, the law rescinds unobligated funds tied to the Inflation Reduction Act, which had earmarked resources for climate-focused initiatives. This legislative rollback represents a setback for many who had hoped to see a more aggressive federal push toward building decarbonization and technological innovation. The implications are particularly stark for contractors, energy consultants, and manufacturers who had aligned their business models with the expectation of continuing federal support for sustainable construction. While state and local governments may step in to fill this vacuum, the rescission adds another layer of complexity to the national policy environment for green buildings.
In the realm of state-level action, a considerable volume of legislation has been under review by USGBC’s advocacy and policy team. Out of more than 2,000 bills analyzed during the 2025 legislative sessions, 338 were prioritized and 26 identified for proactive engagement. These bills cover a wide spectrum, including building code reform, housing affordability linked to energy performance, and financial incentives for sustainable materials or systems. One standout example comes from Oklahoma, where the Housing Finance Agency has released the initial draft of its 2026 Qualified Allocation Plan. This document governs how Low-Income Housing Tax Credits are awarded and has significant bearing on project competitiveness. USGBC has weighed in, urging Oklahoma to grant additional scoring points to developments that achieve sustainable building certifications like LEED. These certifications not only validate the environmental integrity of a project but also improve long-term operating performance and market appeal.
The draft plan is undergoing a phased review process, with another public comment window slated for mid-August and a final version to be published by September 1. The stakes are high for developers and advocates alike, as the inclusion of green building metrics within allocation plans has a direct impact on the adoption of sustainable practices within affordable housing. Advocates in Oklahoma and beyond are being encouraged to engage in the process and submit comments reinforcing the value of high-performance construction within taxpayer-supported housing initiatives. It is a key opportunity for local voices to shape policy in ways that resonate far beyond state borders.
Meanwhile, momentum is building at the municipal level through initiatives like USGBC’s Local Green Building Policy Accelerator, which began a new session with 20 participating local governments in July 2025. This program serves as an incubator for policy innovation, enabling cities and counties to share best practices, pilot new regulations, and craft actionable strategies tailored to local needs. Local governments increasingly understand that building performance standards are not abstract ideals but real tools that can improve quality of life, reduce public infrastructure costs, and stimulate green job growth. The accelerator provides technical assistance, peer learning opportunities, and access to a broader network of support. Governments that missed the application deadline are still encouraged to express interest for future rounds or seek customized assistance to help design and implement local green building policy frameworks.
These developments underscore the growing sophistication and coordination across jurisdictions when it comes to embedding sustainability into building construction policy. From federal appropriations and tax code changes to state housing finance mechanisms and municipal implementation projects, the entire policy stack is being mobilized to drive green building transformation. Yet this complex environment also requires constant vigilance and engagement from stakeholders who understand the nuances of both policy and practice. Architects, engineers, contractors, planners, and sustainability professionals all have a role to play, not just in complying with these policies but in shaping them through public comment, professional testimony, and participation in working groups.
The underlying theme across all of these policy updates is the balancing act between performance and affordability. High-performance green buildings must not become a luxury accessible only to a few. On the contrary, as energy prices rise and climate impacts become more pronounced, such buildings should be viewed as essential infrastructure—tools for social equity, climate resilience, and long-term economic stability. This reframing is necessary to ensure that sustainability is not merely a marketing buzzword but a core principle embedded in every brick, beam, and kilowatt of America’s built environment. The ongoing debates over ENERGY STAR funding, HUD energy codes, green mortgage incentives, and local building regulations are all part of this broader transformation.
For construction professionals, staying informed about these policies is no longer optional. Every permit pulled, every financing application submitted, and every construction bid made is increasingly influenced by a patchwork of requirements, incentives, and constraints driven by public policy. Understanding the direction of federal legislation or interpreting a state's Qualified Allocation Plan can determine project viability. Even small shifts—like a revision in MIP eligibility or a new points system in a housing finance formula—can have ripple effects on project financing, timelines, and design decisions.
Advocacy has become an essential counterpart to design and engineering in the construction sector. Trade associations, professional organizations, and even individual practitioners can wield considerable influence by participating in comment periods, providing testimony, or working directly with policymakers. This active engagement ensures that the realities of construction—costs, materials, schedules, and skilled labor—are reflected in the laws that govern the built environment. As more governments experiment with performance-based codes and green incentive structures, feedback from those on the front lines will be vital in making policies workable and impactful.
As we move deeper into the decade, the convergence of environmental necessity, technological advancement, and public policy will continue to reshape the construction landscape. Whether it’s through refining tax incentives, tightening energy performance standards, or experimenting with new financing models, one thing is clear: the future of construction will be defined not just by how buildings are built, but by how smartly and sustainably they perform. For stakeholders in this field, the time to engage is now—not only to navigate change, but to help lead it.