August 7, 2025 • 14 mins
The state's "All-Electric Buildings" mandate will begin to be phased in next year and, while environmental advocates are welcoming the change, the construction industry is continuing to warn about unintended consequences. We discuss the transition with Mike Fazio, executive director of the New York State Builders Association.
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Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:04):
This summer, the State Fire and Prevention Building Code Council
approved an update to the code that moves New York
another step closer on the implementation of a law requiring
new single family homes, small commercial buildings, and new residential
construction with seven stories or less to forego fossil fuels
starting in twenty twenty six, meaning no gas heat, no
gas stoves, and yes, you guessed it, if you're seeing
(00:25):
a trend, no gas water heaters. The requirement is supposed
to apply to the vast majority of new buildings in
twenty twenty nine. The transition is championed by environmental advocates
and progressive lawmakers, who note that buildings account for about
forty percent of the state's carbon initiatives. But there are
also questions about what this means for the cost of
construction moving forward, and therefore the ability of the state
(00:46):
to build much needed new homes. To get the construction
perspective on this issue, we're joined in the Capitol press
room by Mike Fazio, executive director of the New York
State Builders Association. Welcome to the show, Mike.
Speaker 2 (00:58):
It's great to be here.
Speaker 1 (01:00):
So from your perspective, considering that we already have homes
that are so called all electric. How big of a
sea change is the mandate in twenty twenty six that
will make sure that all homes are all electric? Do
you see this as a natural transition or is it
a heavy lift?
Speaker 2 (01:16):
I would say yes, And the word you just use
is of great concern. Mandate. We oppose mandates. We believe
in affordability of energy, affordability of utility costs and overall
housing costs. Are concerned and we feel that this mandate
(01:37):
is going to increase costs around the state.
Speaker 1 (01:40):
Well, yeah, what is it about going all electrics, so
to speak, that makes construction more expensive? Is it the
technology that's involved, is it the installation process? Is it
on the back end, with say, the cost involved with
some running some of these appliances.
Speaker 2 (01:56):
I'll take you through in real time up until the
mandate starts through to next year. Currently, hundreds of builders
around the state who have large subdivisions, who've started projects,
who've entered in agreements with utilities, paid thousands and thousands
of dollars in deposits for infrastructure, many of whom have
(02:18):
installed the infrastructure in the project. Many of these projects
are phased over years, and they're going to get caught
and that infrastructure is going to lay abandoned because there
is no true grandfathering provision. The Code Council will tell you,
and they said last week at the vote that a
building permit and or a substantially completed building permit application
(02:44):
would grand father you. If you are in that situation,
that statement is very vague. It's not black and white.
In fact, there was a code official on the meeting
who spoke to it and said that is misleading. There
is no true definition of a substantially completed building permit application.
So what the Code Council has ostensibly done is they
(03:06):
punted it unfairly in my view to the local code
official for interpretation. So all of these developers who have
expended money for projects, they're betwixt in between. And as
we speak, the Public Service Commission has started the process
of figuring out and the criteria for which projects will
(03:29):
move forward with all electric or what I call the
hybrid of how we currently build gas and electric.
Speaker 1 (03:37):
So you mentioned this idea of grandfathering in certain projects,
and I brought in this question to the Assembly sponsor
of the All Electric Buildings Act, Emily Gallagher, Brooklyn Democrat,
And I made the case, you know, why shouldn't there
be maybe some more leeway. Why don't we figure out
a way to accommodate these people who might have been
(03:58):
caught flat footed for whatever reason? And this was her response, I.
Speaker 3 (04:02):
Believe that we've passed this bill two years ago. So
anybody that was getting ready to build a building knew
that that was coming. And so if they've baked their
cake in their gas oven, then you know that's they're
going to have to deal with the consequence of that.
Speaker 1 (04:25):
What do you think of that argument that there was
multiple years of lead time and people knew this was coming,
although maybe there was an expectation that it might get subverted,
that there was enough warning to plan for this twenty
twenty sixth st eight.
Speaker 2 (04:37):
Well, what she says is true. It was passed in
the budget two years ago. But as I said, there
are projects that are multi year projects, one hundred houses,
two hundred houses, three hundred houses all around the state.
And part of me says that this is a very
(04:59):
downstate city view of the issue. And when I say
the mandate unfairly covers the whole state because there are
different climate zones in the state. There are different energy
needs in the state, and to do a one size
fits all blanket mandate is grossly unfair. It's unfair to
(05:21):
not only the business people, the builders or even business
people who want to build factories or new buildings, it's
unfair to the consumer because you're taking away energy choice
and it's going to push up the price of housing.
It's going to push up utility bills, as we've seen
in California, which we've beat them now where we're always
(05:45):
in competition with California for some reason, and we've seen
in California that their utility rates have skyrocketed the past
two or three years. And also, to go back to
your earlier question, to go forward after the mandate, what
many people don't realize. In order to get the proper
(06:08):
power to the site, whether it's fifty houses, one hundred houses,
new construction, the utility has to upgrade the substation. They
have to install new transformers, of which there's a big
shortage of transformers right now. Sidebar, there's only one company
(06:32):
in the United States that makes these type of transformers
that for this high energy electricity use. So the utility
has to get the proper capacity to the site, depending
how far away it is, depending on the amount of
work that this can cost an additional hundreds of thousands
of dollars for these sites. Who pays for all this?
It gets passed on to the consumer. Now, our concern
(06:55):
is that how much can you pass on? Housing prices
have almost doubled in less years in New York State.
Speaker 1 (07:01):
Well, you mentioned if housing prices are doubling and demand
has consistently kept up with those price increases, is there
reason to think that the market can't hold some additional
cost increases.
Speaker 2 (07:14):
We need more housing in the state. We are in
the midst of it. I call it a housing emergency
at this point because every year that goes by New
York State, many other states fall further and further behind
in housing production. I think the Governor hocals about a
year and a half ago it was eight hundred thousand
units behind, and now every year that goes by, I
(07:36):
believe we fall by another fifty thousand units of housing
that's needed. And if we don't address this problem in
a expeditious fashion, it's just going to get worse.
Speaker 1 (07:52):
It seems though that the problem when it comes to
new housing has primarily been that it is difficult in
New York to build housing, not necessarily that it is
too expensive, it's that regulations keep people from developing housing.
That say, zoning requirements, you know, prevent a two family
house from going in or building more per acre or
(08:15):
whatever it is. Are you saying that the cost of
housing you think is also going to be detrimental in
the future, that how much it costs actually build a
house could slow the pace of construction.
Speaker 2 (08:24):
All the above, Our power needs in the state are
increasing at the same time is our capacity is falling behind.
We have a power shortage. There's no question. All these
added costs, these mandates, all these added costs, and there's
other issues as well, not only electrification. We have fire
(08:47):
sprinkler mandates. We have doubling of wetlands and inner city
areas where we need housing and we can build housing rapidly.
We have a pushback from localities on the I call
it the stick approach to rezoning, the cart and stick.
But what I'd like to mention is that a lot
and we don't hear much, is that these added costs,
(09:11):
they have a disparate impact on lower and middle income folks.
Lower and middle income buyers, as well as seniors, young families,
disadvantaged communities, and let's not forget black and brown communities.
These are folks who are trying to attain homeownership and
generational wealth for their families. And what are we doing.
(09:33):
We're making it more expensive for them to get that
home ownership, the American dream, so to speak. And there's
no question that all these expenses supply chain interest rates
which are out of our control. But these mandates are
very much in our control in this state. And I
(09:53):
want to go back to, you know what the Governor's
been focusing on, to her credit, affordability, afford ability, keeping
middle class folks in the state, keeping working families in
this state. Affordable housing. When I say affordable mousing, I
need attainable housing. I need middle income housing. And people
who are lower middle income, who maybe have saved enough
(10:16):
money to buy a house. Over the past four years
from COVID till today, that dream of home ownership has
evaporated for these folks.
Speaker 1 (10:26):
So what is it about an all electric home that
makes it more expensive? From your perspective, does a heat
pump cost more than the infrastructure for gas? Is an
electric water heater more expensive? Is an induction oven more expensive?
I mean, what is it that makes the actual home production?
(10:47):
Is it something about the way the house needs to
be built that makes it more expensive, because you know,
it doesn't seem like it should be twenty thirty thousand
dollars more.
Speaker 2 (10:57):
Well, last week I saw a piece that was a
government related document where they actually stated that the cost
of a heat pump and that electrification in a new
house can cost up to thirty thousand dollars more. And
that's what we've been saying for the past two and
a half years. This is nothing new on our part
as an industry. We've been saying this for a long time.
(11:20):
And I understand. I mean, climate change is real, and
climate change deserves an important consideration, but it has to
be balanced with common sense and economic reality. What does
that look at people in the state?
Speaker 1 (11:37):
Yeah, what does that look like? You mentioned the hybrid approach,
You mentioned sort of a reversion to mandates, So what
do you think a green transitions.
Speaker 2 (11:43):
Because we're not going to make our clima goals, that's obvious.
You see a new article every day and whatever publication
you pick up, you see it correct. Why not push
this back. Why do it now? Why not?
Speaker 1 (11:56):
What needs to be in place? Do you think before
a mandate like this takes effect, what would you want
to say?
Speaker 2 (12:01):
I'd like to see, aside from housing and all of
the above approach in energy use, why is there a
war on natural gas? I remember ten years ago natural
gas was considered clean, and now it's the enemy. Many
(12:22):
people also, I want to mention even many builders I
found out recently don't realize that propane is not allowed.
You cannot use propane after Ary January first. Propane is
an important energy source for people in rural areas in
this state, upstate, and that circles back now to my
(12:48):
view that this is a very downstate, city centric issue.
People are not focusing on people who live in rural
areas who depend on pro pe for their energy use,
and they have a skinny USY drive farmland, skinny little
electric line going from the main road to the royal house.
Speaker 1 (13:12):
Well, unfortunately we have to leave things there. We've been
speaking with Mike Fozzio, executive director of the New York
State Builders Association. Mike, thanks for visiting us the studio.
I really appreciate it.
Speaker 2 (13:21):
David's great to be with you. Thank you so much.
Speaker 3 (13:37):
Is your business, agency or service interested in delivering your
message to more than two dozen radio stations statewide carrying
Capital Pressroom.
Speaker 2 (13:46):
If so, visit Capitolpressroom dot org to contact our underwriting team.
Speaker 1 (13:52):
Join us again for Capital Pressroom, a production of WCNY
Connected Syracuse
This summer, the State Fire and Prevention Building Code Council
approved an update to the code that moves New York
another step closer on the implementation of a law requiring
new single family homes, small commercial buildings, and new residential
construction with seven stories or less to forego fossil fuels
starting in twenty twenty six, meaning no gas heat, no
gas stoves, and yes, you guessed it, if you're seeing
(00:25):
a trend, no gas water heaters. The requirement is supposed
to apply to the vast majority of new buildings in
twenty twenty nine. The transition is championed by environmental advocates
and progressive lawmakers, who note that buildings account for about
forty percent of the state's carbon initiatives. But there are
also questions about what this means for the cost of
construction moving forward, and therefore the ability of the state
(00:46):
to build much needed new homes. To get the construction
perspective on this issue, we're joined in the Capitol press
room by Mike Fazio, executive director of the New York
State Builders Association. Welcome to the show, Mike.
Speaker 2 (00:58):
It's great to be here.
Speaker 1 (01:00):
So from your perspective, considering that we already have homes
that are so called all electric. How big of a
sea change is the mandate in twenty twenty six that
will make sure that all homes are all electric? Do
you see this as a natural transition or is it
a heavy lift?
Speaker 2 (01:16):
I would say yes, And the word you just use
is of great concern. Mandate. We oppose mandates. We believe
in affordability of energy, affordability of utility costs and overall
housing costs. Are concerned and we feel that this mandate
(01:37):
is going to increase costs around the state.
Speaker 1 (01:40):
Well, yeah, what is it about going all electrics, so
to speak, that makes construction more expensive? Is it the
technology that's involved, is it the installation process? Is it
on the back end, with say, the cost involved with
some running some of these appliances.
Speaker 2 (01:56):
I'll take you through in real time up until the
mandate starts through to next year. Currently, hundreds of builders
around the state who have large subdivisions, who've started projects,
who've entered in agreements with utilities, paid thousands and thousands
of dollars in deposits for infrastructure, many of whom have
(02:18):
installed the infrastructure in the project. Many of these projects
are phased over years, and they're going to get caught
and that infrastructure is going to lay abandoned because there
is no true grandfathering provision. The Code Council will tell you,
and they said last week at the vote that a
building permit and or a substantially completed building permit application
(02:44):
would grand father you. If you are in that situation,
that statement is very vague. It's not black and white.
In fact, there was a code official on the meeting
who spoke to it and said that is misleading. There
is no true definition of a substantially completed building permit application.
So what the Code Council has ostensibly done is they
(03:06):
punted it unfairly in my view to the local code
official for interpretation. So all of these developers who have
expended money for projects, they're betwixt in between. And as
we speak, the Public Service Commission has started the process
of figuring out and the criteria for which projects will
(03:29):
move forward with all electric or what I call the
hybrid of how we currently build gas and electric.
Speaker 1 (03:37):
So you mentioned this idea of grandfathering in certain projects,
and I brought in this question to the Assembly sponsor
of the All Electric Buildings Act, Emily Gallagher, Brooklyn Democrat,
And I made the case, you know, why shouldn't there
be maybe some more leeway. Why don't we figure out
a way to accommodate these people who might have been
(03:58):
caught flat footed for whatever reason? And this was her response, I.
Speaker 3 (04:02):
Believe that we've passed this bill two years ago. So
anybody that was getting ready to build a building knew
that that was coming. And so if they've baked their
cake in their gas oven, then you know that's they're
going to have to deal with the consequence of that.
Speaker 1 (04:25):
What do you think of that argument that there was
multiple years of lead time and people knew this was coming,
although maybe there was an expectation that it might get subverted,
that there was enough warning to plan for this twenty
twenty sixth st eight.
Speaker 2 (04:37):
Well, what she says is true. It was passed in
the budget two years ago. But as I said, there
are projects that are multi year projects, one hundred houses,
two hundred houses, three hundred houses all around the state.
And part of me says that this is a very
(04:59):
downstate city view of the issue. And when I say
the mandate unfairly covers the whole state because there are
different climate zones in the state. There are different energy
needs in the state, and to do a one size
fits all blanket mandate is grossly unfair. It's unfair to
(05:21):
not only the business people, the builders or even business
people who want to build factories or new buildings, it's
unfair to the consumer because you're taking away energy choice
and it's going to push up the price of housing.
It's going to push up utility bills, as we've seen
in California, which we've beat them now where we're always
(05:45):
in competition with California for some reason, and we've seen
in California that their utility rates have skyrocketed the past
two or three years. And also, to go back to
your earlier question, to go forward after the mandate, what
many people don't realize. In order to get the proper
(06:08):
power to the site, whether it's fifty houses, one hundred houses,
new construction, the utility has to upgrade the substation. They
have to install new transformers, of which there's a big
shortage of transformers right now. Sidebar, there's only one company
(06:32):
in the United States that makes these type of transformers
that for this high energy electricity use. So the utility
has to get the proper capacity to the site, depending
how far away it is, depending on the amount of
work that this can cost an additional hundreds of thousands
of dollars for these sites. Who pays for all this?
It gets passed on to the consumer. Now, our concern
(06:55):
is that how much can you pass on? Housing prices
have almost doubled in less years in New York State.
Speaker 1 (07:01):
Well, you mentioned if housing prices are doubling and demand
has consistently kept up with those price increases, is there
reason to think that the market can't hold some additional
cost increases.
Speaker 2 (07:14):
We need more housing in the state. We are in
the midst of it. I call it a housing emergency
at this point because every year that goes by New
York State, many other states fall further and further behind
in housing production. I think the Governor hocals about a
year and a half ago it was eight hundred thousand
units behind, and now every year that goes by, I
(07:36):
believe we fall by another fifty thousand units of housing
that's needed. And if we don't address this problem in
a expeditious fashion, it's just going to get worse.
Speaker 1 (07:52):
It seems though that the problem when it comes to
new housing has primarily been that it is difficult in
New York to build housing, not necessarily that it is
too expensive, it's that regulations keep people from developing housing.
That say, zoning requirements, you know, prevent a two family
house from going in or building more per acre or
(08:15):
whatever it is. Are you saying that the cost of
housing you think is also going to be detrimental in
the future, that how much it costs actually build a
house could slow the pace of construction.
Speaker 2 (08:24):
All the above, Our power needs in the state are
increasing at the same time is our capacity is falling behind.
We have a power shortage. There's no question. All these
added costs, these mandates, all these added costs, and there's
other issues as well, not only electrification. We have fire
(08:47):
sprinkler mandates. We have doubling of wetlands and inner city
areas where we need housing and we can build housing rapidly.
We have a pushback from localities on the I call
it the stick approach to rezoning, the cart and stick.
But what I'd like to mention is that a lot
and we don't hear much, is that these added costs,
(09:11):
they have a disparate impact on lower and middle income folks.
Lower and middle income buyers, as well as seniors, young families,
disadvantaged communities, and let's not forget black and brown communities.
These are folks who are trying to attain homeownership and
generational wealth for their families. And what are we doing.
(09:33):
We're making it more expensive for them to get that
home ownership, the American dream, so to speak. And there's
no question that all these expenses supply chain interest rates
which are out of our control. But these mandates are
very much in our control in this state. And I
(09:53):
want to go back to, you know what the Governor's
been focusing on, to her credit, affordability, afford ability, keeping
middle class folks in the state, keeping working families in
this state. Affordable housing. When I say affordable mousing, I
need attainable housing. I need middle income housing. And people
who are lower middle income, who maybe have saved enough
(10:16):
money to buy a house. Over the past four years
from COVID till today, that dream of home ownership has
evaporated for these folks.
Speaker 1 (10:26):
So what is it about an all electric home that
makes it more expensive? From your perspective, does a heat
pump cost more than the infrastructure for gas? Is an
electric water heater more expensive? Is an induction oven more expensive?
I mean, what is it that makes the actual home production?
(10:47):
Is it something about the way the house needs to
be built that makes it more expensive, because you know,
it doesn't seem like it should be twenty thirty thousand
dollars more.
Speaker 2 (10:57):
Well, last week I saw a piece that was a
government related document where they actually stated that the cost
of a heat pump and that electrification in a new
house can cost up to thirty thousand dollars more. And
that's what we've been saying for the past two and
a half years. This is nothing new on our part
as an industry. We've been saying this for a long time.
(11:20):
And I understand. I mean, climate change is real, and
climate change deserves an important consideration, but it has to
be balanced with common sense and economic reality. What does
that look at people in the state?
Speaker 1 (11:37):
Yeah, what does that look like? You mentioned the hybrid approach,
You mentioned sort of a reversion to mandates, So what
do you think a green transitions.
Speaker 2 (11:43):
Because we're not going to make our clima goals, that's obvious.
You see a new article every day and whatever publication
you pick up, you see it correct. Why not push
this back. Why do it now? Why not?
Speaker 1 (11:56):
What needs to be in place? Do you think before
a mandate like this takes effect, what would you want
to say?
Speaker 2 (12:01):
I'd like to see, aside from housing and all of
the above approach in energy use, why is there a
war on natural gas? I remember ten years ago natural
gas was considered clean, and now it's the enemy. Many
(12:22):
people also, I want to mention even many builders I
found out recently don't realize that propane is not allowed.
You cannot use propane after Ary January first. Propane is
an important energy source for people in rural areas in
this state, upstate, and that circles back now to my
(12:48):
view that this is a very downstate, city centric issue.
People are not focusing on people who live in rural
areas who depend on pro pe for their energy use,
and they have a skinny USY drive farmland, skinny little
electric line going from the main road to the royal house.
Speaker 1 (13:12):
Well, unfortunately we have to leave things there. We've been
speaking with Mike Fozzio, executive director of the New York
State Builders Association. Mike, thanks for visiting us the studio.
I really appreciate it.
Speaker 2 (13:21):
David's great to be with you. Thank you so much.
Speaker 3 (13:37):
Is your business, agency or service interested in delivering your
message to more than two dozen radio stations statewide carrying
Capital Pressroom.
Speaker 2 (13:46):
If so, visit Capitolpressroom dot org to contact our underwriting team.
Speaker 1 (13:52):
Join us again for Capital Pressroom, a production of WCNY
Connected Syracuse
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