As kitchen-table living costs continue to strain consumer household budgets, some builders are marketing new homes to help reduce monthly expenses.
KB Home is one of them. The company contends that energy-efficient, high-performance and resilient homes can lower utility and maintenance costs, helping homeowners save money month after month.
KB Home’s newly released 2025 Sustainability Report underscores this effort. KB Home customers in 2025, the report concludes, will save an average of $1,900 a year on utility bills compared to the typical home. These savings highlight that affordability is about more than upfront sticker price, extending into ongoing costs such as utility bills, maintenance and insurance.
To market these cost savings to customers, KB Home’s sales teams place an energy-cost label in every model home that estimates monthly utility expenses compared to those of an older home of a similar size.
The labels, modeled after vehicle fuel-efficiency stickers, educate buyers on expected savings.
KB Home considers its leadership in water conservation, energy efficiency and resilience to be a major differentiator that stands out among potential buyers. While lower energy bills often capture buyers’ attention first, KB Home also uses the labels to start conversations about other benefits.
“There are these tangible benefits of comfort, a healthier [indoor air] environment, less maintenance, potentially lower insurance premiums and things of that sort. I think that the message comes across very clearly,” Jacob Atalla, VP of Innovation and Sustainability, told HousingWire’s The Builder’s Daily.
Conserving water and lowering costs
KB Home built more than 4,300 homes last year that matched or exceeded the U.S. Environmental Protection Agency’s WaterSense-labeled standards. This is more than any other homebuilder and represents about 33% of KB Home’s total deliveries. Atalla sees this distinction as one of KB Home’s key differentiators, particularly in regions like the Southwest, where water is in short supply, and where new-home communities can come across to home-seekers as a “sea of sameness.”
In dry climates, the outside of the home can actually use more water than the inside, driving up ongoing utility costs for homeowners. To address this, KB Home plants water-efficient landscaping and implements efficient irrigation systems in its yards, particularly in the Southwest.
Inside the home, the WaterSense standards address everything from fixtures and hot water distribution to more efficient plumbing layouts. These design features work to reduce water consumption by about 30% to 40% compared with a typical home.
“It’s the whole home working as a system to reduce water consumption, including the yard, and with that, there is about between $400 to $500 in water utility savings on an annual basis,” Atalla explained.
To date, KB Home has built more than 31,000 WaterSense-labeled homes, saving an estimated 2.3 billion gallons of water annually.
(Source: KB Home’s 2025 Sustainability Report)Energy efficiency and livability
The typical KB Home community is now 57% more energy efficient than the average homes built in 2006, and roughly 10% more efficient than the average newly built, RESNET HERS (Home Energy Rating System) rated home built in 2025, according to the sustainability report.
KB Home’s efficiency gains over the past couple of decades have come through a mix of steady incremental improvements and larger breakthrough innovations. Early improvements included measures such as using radiant barriers in attics, while more recent advancements are centered on placing ducts and air handlers within conditioned space.
Other recent innovations, such as microgrid communities in California, which are all-electric, solar- and battery-powered communities, could prove to increase energy efficiency even further.
KB Home additionally incorporates wellness into its design through features that improve both efficiency and indoor air quality, such as energy recovery ventilation systems, healthier lighting designs, low-VOC paint and carpeting and smart thermostats.
Solar communities are aso a big part of KB Home’s business, with roughly 3,400 solar-powered homes delivered last year. However, the company’s solar strategy is now mainly focused on California, where it is required by code.
“We didn’t see as much demand as we hoped for that would sustain that business in other states, so for these reasons and others, we scaled it down to just California,” Atalla said.
California’s stringent environmental regulations and standards have received pushback from some legislators and homebuilding leaders, who argue that these high standards push up the cost of housing. The U.S. Department of Housing and Urban Development (HUD) recently released a report urging states and municipalities to scrap a host of regulations, including strict environmental standards.
However, proponents of these strict environmental standards argue that it forces homebuilders to deliver better and more efficient housing. To this end, KB Home’s latest sustainability report notes that homes in California markets, including those in Los Angeles, San Diego, the Inland Empire, Sacramento and the Bay Area, are far more efficient and sustainable and emit far fewer greenhouse gas emissions than other KB Home divisions.
KB Home estimates an average impact of 2.5 tons of CO2e (carbon dioxide equivalent) for each house built in 2025. Some markets, like Boise and Dallas-Fort Worth, eclipsed 5.0 CO2e per home. Other divisions like Charlotte, Raleigh/Durham and Denver weren’t far behind.
However, every KB Home California division was far more efficient, with an impact of 1.0 tons of CO2e or less. Most California divisions registered less than 0.5 CO2e, indicating that the strict environmental building requirements in the Golden State have some positive impacts on sustainability and performance.
How resiliency plays into affordability
KB Home is also a leader in fire-resiliency, having delivered the first two communities in California that met the Insurance Institute for Business & Home Safety (IBHS) home- and neighborhood-level wildfire resilience standards.
California already has strict wildfire building requirements, but IBHS standards go above and beyond what state law mandates.
The IBHS wildfire resilience framework combines home-level and community-wide protections.
Individual homes must include Class A fire-rated roofs, durable windows and doors, noncombustible gutters, ember- and flame-resistant vents, and a 5-foot noncombustible buffer around the structure.
Community standards include maintaining at least 10 feet of separation between most buildings, installing fire-resistant features such as metal fencing and rock materials, and limiting combustible fuels throughout the development.
KB Home plans to employ these standards in future communities built in fire-prone areas, whether in California or in other states.
The overarching goal is to improve safety and make communities more resilient to hurricanes, but the IBHS standards are also aimed at making homes easier to insure, a growing problem in California’s fire-prone foothill regions.
A cost-benefit analysis
Nam Joe, KB Home’s Sacramento Division President, previously told The Builder’s Daily that his team was able to implement the strong fire-resiliency standards at no additional cost by virtue of the firm’s early partnership with IBHS.
However, in the sustainability report, KB Home admits that implementing sustainable and resilient features beyond what municipal and state codes require can add additional upfront costs. The report similarly notes the downsides of delivering a home that isn’t as efficient or resilient as it could be.
“In evaluating whether to implement voluntary improvements, we consider that choosing not to enhance our homes’ resource efficiency can make them less attractive to municipalities, and increase the vulnerability of residents in our communities to rising energy and water expenses and use restrictions,” the report read. “We balance these costs against our goals of profitability and affordability for first-time and first move-up buyers.”
Therein lies the debate. While building sustainable and resilient homes can lower ongoing costs, it can also add more to the initial sticker “first-cost” price of a home. In this vein, the report notes that KB Home is leveraging its experience and scale to identify ways to streamline sustainable homebuilding and make it attainable for a growing share of buyers.
As Atalla put it, this can mean searching for alternative materials or leveraging technology to lower building costs.
“The things that we’re now looking at for the next few years are more related to how we can evolve our offsite construction to help in reducing costs and improving the quality of construction, which improves efficiencies as well,” Atalla said.
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