Issue link: https://read.dmtmag.com/i/406201
NOVEMBER 2014 14 THE JOURNAL Bad Law Yields Bad Policy MHARR VIEWPOINT BY DANNY GHORBANI Computer scientists and programmers have a saying – "garbage in, garbage out." In other words, if a program is based on faulty, invalid data, the output from the program will be equally invalid. Well, the same wisdom holds true in other fields, including government reg- ulation. If you start with a bad, inaccurate, disingenuous, or faulty premise in the govern- ing law, the resulting policies and regulations will likely be misguided, counter-productive and potentially harmful to both regulated parties and society at large. Such, unfortunately, is the case with the manufactured housing provi- sion of the Energy Independence and Security Act of 2007 (EISA), now being converted into federal standards by the U.S. Department of Energy (DOE). Best known for its edict against the tradi- tional incandescent light bulb – and correspon- ding mandate for higher-cost, potentially hazardous (if broken) "compact fluorescent" light bulbs -- EISA carves-out a portion of HUD's comprehensive regulatory jurisdiction over the manufactured housing industry under the National Manufactured Housing Construc- tion and Safety Standards Act of 1974, and di- rects DOE to: (1) "Establish" energy conservation stan- dards for manufactured homes; (2) "In consultation" with HUD, which "may seek further counsel from the Man- ufactured Housing Consensus Committee" (MHCC); (3) "Based on the most recent version of the International Energy Conservation Code ["IECC"] except in cases in which … that the code is not cost effective … based on … the purchase price of manu- factured housing and on total life-cycle construction and operating costs;" (Emphasis added). While EISA has been dressed-up and mar- keted as "consumer" legislation by its supporters in the "green energy" industry, the actual facts show that it is nothing of the sort. Rather than benefiting consumers, it is a bonanza for energy spe- cial interests, while its manufactured housing provision, in particular, will result in sharp price increases that, even its supporters tacitly admit, will freeze millions of moderate and lower-in- come Americans out of the market for the na- tion's most affordable source of home owner- ship, while crippling much of the industry with severe losses at both the lower and higher ends of its already-diminished existing market. The first problem with this one-size-fits-all big government mandate – i.e., the "garbage in" -- is that it rests on a raft of false and inac- curate assumptions which are refuted by the fol- lowing facts: • First, energy operating costs for manufac- tured homes produced under the current HUD standards are equal to or significantly lower (de- pending on energy type) than energy operating costs for other types of homes already built to the IECC, as shown by the U.S. Census Bu- reau's 2011 American Housing Survey (AHS). • Second, while energy special interests (and other industry detractors) continue to advance the canard that low-cost manufactured homes are not truly "affordable" because of supposedly "high" operating costs, the AHS shows that the total median monthly operating cost of a man- ufactured home is less than one-third of other homes. • Third, the EISA directive to "establish" energy standards for manufactured homes had no factual basis from the start, as HUD already had (and still has) cost-effective energy effi- ciency standards for manu- factured homes that result in affordable, energy efficient homes; and • Fourth, enhanced en- ergy efficiency packages are already available to home- buyers under the existing HUD standards, which allow manufacturers the flexibility to offer a wide range of energy efficiency options as a matter of consumer choice. Worse yet, as bad and misguided as EISA's substantive directive is, its implementation by DOE -- over the past seven years, now -- has ranged from chaotic and confusing at best, to arguably unethical and unlawful at worst. After EISA was adopted seven years ago, DOE began a conventional rulemaking process to develop the required manufactured housing standards. Subsequently, in 2011 or 2012, copies of the "draft proposed" manufactured housing energy rule developed by DOE were se- lectively leaked to certain parties in interest (in- cluded a national industry association), as reported by MHARR at the time and now con- firmed publicly by attorneys from DOE's Office of General Counsel (OGC). This "impermissi- ble" advance disclosure (as characterized by DOE-OGC) of a proposed rule to – and poten- tial receipt of selective input from – undisclosed parties in interest, resulted in the rejection of the draft DOE rule by the Office of Manage- ment and Budget (OMB) and an OMB direc-