Building Code Changes Affecting Rental Housing Affordability

Building code changes over the past 10 years have been the single biggest driver in increasing rental housing affordability

Building code changes over the past 10 years have been the single biggest driver in increasing rental housing affordability, according to a release from the National Multifamily Housing Council (NMHC).

The NMHC conducted a survey of its membership to gain more clarity on specific building-code cost drivers and feasibility deterrents.

The NMHC Pulse Survey on Building Codes and Standards was conducted from March 5 -19, 2024, and received 41 responses from multifamily builders, developers and operators across the United States. All data are available in a downloadable PDF.

The release says that on average, respondents reported that more than half (55%) of the projects they are involved with are townhouse/garden style, while a third (34%) are mid-rise and 10% are high-rise.

As government officials put in more layers of building codes and regulations, “housing providers grapple with increased costs and technologically or structurally infeasible requirements.”

Building code changes over the past 10 years have been the single biggest driver in increasing rental housing affordability

Topics that cause the most challenges for rental housing providers

The codes and standards that caused the most significant challenges were:

  • Over two-thirds (68%) of respondents agreed or strongly agreed that mechanical/electrical codes posed significant compliance challenges, followed by compliance challenges related to energy performance and efficiency (66%), electrification/net-zero emissions (63%) and fire protection (61%).
  • Over half of respondents agreed or strongly agreed that codes and standards related to sustainability/green building (54%) and accessibility (51%) caused them significant challenges.
  • Although 49% of respondents agreed or strongly agreed that structural codes and standards caused significant compliance challenges, another 49% of respondents reported being neutral or disagreed about the challenges related to structural codes and standards.
  • Codes and standards related to existing buildings as well as those related to resiliency were reported as less problematic. The largest share of respondents for both groups reported being neutral—37% for codes and standards related to existing buildings and 63% for those related to resiliency.

Inconsistency between jurisdictions – Key factors

The report said for those respondents who agreed or strongly agreed that at least one area of codes and standards posed significant challenges for their business, they heavily attributed those challenges to a few key factors:

  • Of those respondents who reported challenges, 92% agreed or strongly agreed that those challenges could be attributed to variation in code requirements/interpretation between jurisdictions. Respondents noted that interpretations of fire codes, for example, could even differ depending on an individual fire marshal.
  • Similarly, 82% of respondents agreed or strongly agreed that interpretability (i.e., that codes are difficult to interpret) was a source of significant challenges.
  • Eighty-nine percent of respondents agreed or strongly agreed that compliance challenges could be attributed to the effect of construction costs.
  • Separately, 89% of respondents agreed or strongly agreed that building code requirements in general affect the cost and viability of construction projects.
  • Respondents also largely agreed that challenges could be attributed to design issues (82% agree or strongly agree), material selection and availability (79%), as well as enforcement and inspection (79%).
  • Compliance challenges were less attributed to workforce availability and training (50% agree or strongly agree; 47% neutral or disagree) or resident preferences and marketability (37% neutral and 26% disagree).

“Multiple respondents highlighted Austin as a place where these issues were particularly acute, as well as locales in North Carolina such as Chapel Hill or Charlotte,” the report says.

Read the full report here.

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