H.R. 7282: Freeing Residential Affordable Markets from Excess Regulation Act

This bill, titled the Freeing Residential Affordable Markets from Excess Regulation Act or FRAMER Act, aims to incentivize states to avoid implementing costly and burdensome energy code housing policies. Here are the main provisions of the bill broken down:

Incentives for States

To qualify for federal funding, states must offer financial payments to builders of residential units in designated opportunity zones after the units have been inspected and approved for occupancy. Specifically, the payment should equal the difference between:

• The cost incurred by the builder to comply with the state’s energy housing code.
• The cost to comply with the Department of Housing and Urban Development’s (HUD) Minimum Energy Standard.

This financial incentive is designed to encourage states to adopt standards that are less expensive than those set by HUD. If a state’s housing code is already cheaper, the payment provision won’t apply.

Disclosure Requirements

Builders who receive financial aid must also provide a disclosure document to the first buyer of the residential unit. This document must include:

• The cost difference between the state energy housing code and HUD’s Minimum Energy Standard.
• Any amounts received from the state under this program that were used to lower the sale price of the unit.

Annual Reporting

The bill mandates annual reporting by the Comptroller General of the United States to Congress regarding:

• The states that provided payments to builders.
• The specific amounts paid in these transactions, categorized by region.
• The total payments made over the year.
• Cost comparisons between state codes and HUD standards.

Duration of the Program

The provisions of this new section will expire seven years after the law is enacted, indicating a limited time frame for these incentives and reporting requirements.

Definitions

For clarity, the bill defines key terms such as covered dwelling unit, which refers to a residential building defined in federal regulations, and opportunity zone, referring to areas designated under tax incentive regulations to encourage investment and development.

Relevant Companies

• DHI - D.R. Horton, Inc.: As a prominent homebuilder, changes in energy code regulations and associated costs could significantly impact their construction practices and profitability in opportunity zones.
• KBH - KB Home: Another major homebuilding company that may be affected due to shifts in energy regulation costs and reimbursement structures outlined in the bill.
• PHM - PulteGroup, Inc.: As a large-scale residential builder, PulteGroup could see changes in operational costs and financial incentives under this new legislative framework.