NAHB and State Builders Secure Delay of All-Electric Buildings Act Through Legal Challenge
Legal Victory Halts Implementation
The National Association of Home Builders and New York State Builders Association secured a suspension of New York’s statewide gas ban while appealing the regulation in the Second Circuit Court of Appeals. The 2023 All-Electric Buildings Act, which would prohibit natural gas use in new construction under seven stories beginning January 1, 2026, now faces delayed implementation pending legal resolution.
First Statewide Gas Prohibition
New York’s legislation represents the first statewide ban on natural gas use in new residential construction nationwide. After a federal district judge ruled in favor of the state in July 2025, attorneys negotiated a stipulation suspending implementation during the appeals process. If the appeal fails, the state agreed to provide a 120-day grace period before enforcement begins, according to National Association of Home Builders.
Housing Affordability Concerns Emerge
Cracks appeared in the coalition supporting the law when 17 Democratic New York State Assembly members sent a letter to Governor Kathy Hochul urging delay over housing affordability concerns and additional strain on the electric grid. The lawmakers called for creating a task force to study the rules’ impact on housing costs and grid capacity. NAHB and NYSBA also requested intervention from U.S. Attorney General Pam Bondi, arguing federal regulations supersede state law.
Industry Arguments Against Ban
NAHB opposes blanket bans on energy sources in residential construction, arguing they limit consumer choice and can lead to higher utility bills. “Natural gas bans, while well intended for environmental impact, limit consumer choice and can lead to higher utility bills,” the organization stated. The association warns of unintended consequences placing additional strain on a national electric grid already stressed by surging data center construction.
Implications for NYC Development
The suspension provides temporary relief for developers and homebuilders planning projects in New York City and throughout the state. The case’s ultimate resolution–whether at the appellate level or potentially the U.S. Supreme Court–will significantly impact construction practices and housing development costs. As Mayor-elect Zohran Mamdani prepares an administration focused on housing affordability and his ambitious universal child care proposal, the gas ban debate intersects with broader questions about balancing environmental goals with economic accessibility. The legal challenge continues as stakeholders await the Second Circuit’s decision on this precedent-setting energy policy.
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