Making a Case for Codes

Building codes are often the vehicle for pushing an energy efficiency agenda.

Sustainability and energy conservation goals remain a priority for the federal government and many state and local jurisdictions. However, as difficult political environments and budgetary constraints have hindered large-scale legislative and regulatory efforts, environmental initiatives have proliferated in the building code arena. New green building and energy codes are now being vetted for adoption nationwide, signaling that apartment firms should begin to prepare for a raft of changes that come with new costs and design challenges.

Most concerning to the apartment industry is that many jurisdictions are considering new energy codes that will require tremendous improvements in building energy performance. While apartment firms can benefit from better building performance, the feasibility of achieving arbitrary performance goals is questionable. For example, many proposals seek to increase the stringency of the International Energy Conservation Code (IECC)—the nation’s most widely adopted building energy code—by 30 percent to 50 percent. While snags in the legislative and regulatory rule-making process have stalled many of these proposals, concerted efforts to advance these initiatives through the code development process have ramped up significantly, starting with the 2009 edition. The more recent 2012 code is estimated to be 30 percent stricter than the earlier 2006 version.

So much of the energy conversation has focused on potential energy savings that the business consequences often are treated as an afterthought. New research commissioned by the National Multi Housing Council (NMHC) and National Apartment Association (NAA) finds that energy savings come at a real cost—one that could add thousands of dollars to the price of each new apartment unit and significantly undermine the affordability of multifamily housing.  The study, “Impact of the 2009 and 2012 International Energy Conservation Code in Multifamily Buildings,” compares the costs, benefits and practical limitations of the most recent 2009 and 2012 IECC editions using the 2006 code as a baseline.

New compliance costs will vary greatly across the country based on a building’s construction type, material composition and location. For example, in a moderate climate zone, compliance costs for the 2009 code range between $230 and $270 per apartment unit in a low-rise building and soar to $940 and $1,140 per unit in a high-rise project. At minimum, compliance with the 2012 IECC will cost an additional $1,770 to $2,060 for low-rise properties and $340 to $400 in high-rise buildings. These new costs stem from a broad range of new requirements including upgraded insulation, new compliance testing, enhanced window and door requirements, first-ever lighting efficiency requirements in apartment units and new performance measures for building amenity and common areas (for full study results, visit www.nmhc.org/goto/IECC-Study).

At the same time, nearly every state and hundreds of individual localities have enacted green building measures, ranging from incentive programs to construction mandates. Although relatively few of these measures require privately funded projects like market-rate apartment buildings to meet established green building criteria, that scope may change with the release of the new International Green Construction Code (IgCC).

Published by the International Code Council (ICC) in March, the IgCC is the first model code for green building, including apartment properties. Originally envisioned as an entry-level resource for green building, the final IgCC includes aggressive criteria that could prove costly and technically challenging for apartment firms. Not only does the IgCC provide comprehensive requirements related to land development, materials selection, energy and water efficiency and indoor air quality for builders, but it also requires a unique level of customization by adopting jurisdictions. The end result: Apartment firms operating in multiple regions may face significantly different compliance requirements.

The second issue with the IgCC is that it also represents a significant departure from the most prominent green building programs in use today, as it limits the flexibility developers usually have in selecting from a menu of sustainable practices to meet building performance goals. Instead, the IgCC requires local code authorities and policymakers to determine the full suite of mandatory components for their jurisdictions during adoption.

The IgCC may also be problematic for the apartment industry because residential construction was originally excluded from the code’s scope. Confusion over the applicability of the code to apartments persisted throughout the development process and, consequently, the IgCC was established with little input from the apartment sector. As published, the IgCC specifically applies to select apartment properties, although it provides an option for extending the code to all multifamily construction. Compliance for multifamily properties is based on building height, with high-rise apartment buildings automatically included in the scope of the IgCC. Multifamily buildings up to four stories in height are exempt from the IgCC—unless a jurisdiction selects an option specifically extending the code to low-rise residential buildings.

On the plus side, the code comes with a built-in Plan B. Multifamily buildings can meet IgCC compliance requirements using the National Green Building Standard (NGBS) ICC-700, which is the only green building standard developed specifically for residential properties. The apartment industry was very active in crafting the NGBS and so, unlike the IgCC, it reflects the building products and best practices most often used in multifamily development. The NGBS is also a points-based system, which allows owners and developers to select the design components that will be most meaningful and cost-effective for their projects. More important, the NGBS puts all multifamily development on equal footing and does not create different criteria for low- and high-rise buildings. To ensure that the standard remains rigorous and effective, revision of the NGBS began in 2010 and is now in its final stages. Publication of the updated NGBS is expected in late 2012 or 2013.

As state and local jurisdictions adopt new green building and energy codes, they will significantly impact the way apartments are developed, built and operated going forward. But, because all green building and energy codes are not created equal, it’s critical that apartment firms understand the technical and economic effects of the latest revisions in order to mitigate negative consequences.

Paula Cino is the director of energy and environmental policy at NMHC. She is based in Washington, D.C. and can be reached at pcino@nmhc.org.