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Builders say all-electric construction will drive up home prices, shrink total number of new homes built

Construction leaders predict an increase in home prices and decrease in new constructions due to New York’s mandate requiring all-electric buildings starting in 2026.


The construction industry asserts that the current electric grid may not accommodate the surge in demand resulting from the ban on natural gas in new buildings. Despite backing green initiatives, builders worry that the installation of heat pump or geothermal heating and cooling systems will escalate costs, both in new-home prices and energy bills, given potential grid investments and rising electricity demand.

The legislation is part of an environmental effort to reduce the state’s greenhouse gas emissions, with buildings accounting for over 30% of these emissions.


However, the construction industry and New York Independent System Operator (NYISO), which manages the state’s grid, warn of the existing electrical infrastructure’s incapacity to handle the increased load. The new mandate has also raised questions about the affordability of new homes, as costs associated with heat pump or geothermal systems will likely be passed onto consumers.

The law has further called into question Gov. Kathy Hochul’s push for affordable housing, with contractors expressing concerns over how power companies will meet the increased demand.



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