Multifamily companies work to provide affordable housing while meeting requirements.
More than two-fifths (40.6%) of multifamily housing development costs stem from compliance with local, state and federal regulations, and 11.1% are attributable to building code changes in the past decade alone, according to a recent study conducted jointly by the National Multifamily Housing Council (NMHC) and the National Association of Home Builders (NAHB).
The multifamily housing industry is impacted by more than a dozen international model codes and dozens of industry standards, developed and published by independent organizations like the International Code Council, National Fire Protection Association and American Society of Heating, Refrigerating and Air-Conditioning Engineers (ASHRAE), as interpreted by states and municipalities to meet their own specific needs.
In general, the industry supports and actively participates in creating minimum requirements for design, construction, alteration and maintenance of apartment buildings in ways that are practical, cost-effective and well-tailored to the realities of multifamily housing construction; however, policymakers need to consider the costs of such requirements, which cover everything from fire safety to energy efficiency to accessibility.
To underscore the need for that balance, the National Apartment Association (NAA) and NMHC released a joint viewpoint statement stating: “The apartment industry supports building codes and standards that are technologically feasible, cost effective and reflect the unique needs of multifamily buildings to enable the apartment industry to deliver housing affordable to America’s working households.”
That balance is especially relevant at a time when post-COVID supply chain breakdowns, higher material and labor costs due to inflation and stricter lending practices in the wake of interest rate hikes have added to the already challenging affordable housing shortage in the U.S. According to the National Low Income Housing Coalition, there are 7.3 million fewer dwellings for extremely low-income renters than needed, for example, a gap that widened by more than 500,000 during the pandemic.
“Housing affordability has to be a massive consideration when developing any kind of new regulations that would affect the development of new housing,” says Ben Harrold, Manager of Public Policy for NAA. “If you implement these codes—which, by and large, are important for protecting health and safety, and environmental concerns—but if you create significant new costs, that would hinder the development of affordable housing. Codes that are less successful are ones that take fewer considerations of the industry into account. The inverse is that the most successful codes look at the regulations from many angles.”
Many states and municipalities adopt some form of the international codes, taking perhaps the International Fire Code taking perhaps the International Fire Code or International Energy Conservation Code template and amending it to fit their local needs, Harrold says. Multifamily housing companies that want to familiarize themselves with the International Code Council’s templates can buy codebooks from the organization’s website, he says. Municipalities and states typically post their own amended versions online, and if not, the town clerk will typically have them.
“Whenever a city council or state legislature is implementing a certain set of codes, it’s important to make sure that our membership—or anyone in rental housing or the development industry—turns up and gives their perspective on why codes are valuable to the industry and why they might detract from affordability,” Harrold says. “Or, in some cases, aren’t feasible because of local economics like the cost of labor and cost of materials.”
Harrold suspects that codes adopted at the local level tend to contain both the most innovative and the most counterproductive provisions from the industry’s standpoint. “Often, there are fewer hurdles to overcome in the policy making process, fewer conversations during code development and honestly, fewer resources for local lawmakers to be making decisions,” he says.
The most noteworthy trend that Harrold has tracked in recent years has been the greater focus on climate and sustainability, with increased attention to factors like insulation requirements and temperature sealing as well as standards related to vehicle technology. “We’ve seen some interest in laying out standards in how you install electric vehicle equipment in parking spaces, or how many parking spaces have to be EV capable,” he says.
Based in Franklin, Tenn., Bristol Development Group does work throughout the Southeastern U.S. and has to track a wide variety of state and local codes, says Glen Bartosh, Chief Development Officer. “Even when the codes are the same, their interpretations are different,” he says. “It’s a challenge keeping up with all the variables and the idiosyncrasies of the local inspectors, and just in general, the codes get more and more restrictive every year, which contributes to cost. I’m not saying that the code restrictions are frivolous or unneeded, although they are in some cases.”
Life safety and fire safety measures are continuously being ratcheted up in ways that Bartosh says typically makes sense. “It’s just a constantly moving target,” he says. “When you get the local authorities involved, they have their own interpretation, which may or may not match the rest of the world. One of the challenges of developing is figuring out what the rules of the road are, and determining whether or not you can live with those.”
But sometimes, the rules are hard to follow. For example, developers are required to place ground-fault-interruption devices on all circuits, not just in wet areas like the bathroom and kitchen, Bartosh says. “The manufacturing of electrical components has not kept up with the code requirements,” he says. “We’ve had projects where you plug in the refrigerator or dishwasher and it trips breakers. The new breaker has not been designed and tested thoroughly enough. You have a manufacturing problem not keeping up with the code changes.”
And sometimes, the rules are just very particular—for example, a mere speck of paint on a fire sprinkler requires that the sprinkler be replaced. “Even if it’s on a cover plate that doesn’t have anything to do with functionality,” he says. “That sounds like a simple thing to avoid, but in reality, it’s very difficult.”
Bartosh met recently with a local building code official about getting a certificate of occupancy and asked if the person had a summary of what would be required. They did not, in part because they were only one of five people involved in the process, none of whom turned out to have written guidelines for what was needed.
“You ask questions, try not to be a pest, and try to be really well-prepared when you sit down with them—have your questions queued up, and then try to get them to make a commitment as to their expectations and requirements,” he says. “We learn frequently that commitments aren’t really commitments. We get told something, and when they come out to do the inspection, here’s something else you need to be concerned about. Why didn’t you tell me that a year ago?”
Bartosh adds that he realizes that sounds like sour grapes. “I sympathize with code officials,” he says. “In so many locations, there’s too much work for the staff they have.”
Bristol has been paying close attention to the new Florida legislation, signed in March and effective as of July 1, called the Live Local Act, which enables developers to bypass local zoning approvals as long as at least 40% of a development is deemed affordable housing. “It could change the way things happen in Florida fairly dramatically,” Bartosh says. “They’ve realized they have a significant need, as most every place in the country does, for more affordable housing.… They take all the NIMBYism out of the equation. As long as you meet code requirements, there are no public hearings.”
One piece of property that Bristol has been trying to get rezoned for multifamily has required 27 public hearings over the course of a year. “If this law had been in place, it would have taken a few months,” he says. “It’s very helpful for developers if they’re willing to do affordable housing. I’m sure it’s going to be challenged by a lot of Florida municipalities. It’s taken the control out of their hands. But it’s with good intentions. As a developer, shortening the process saves money, which allows us to spend more on affordability than lawyers or engineers.”
Matt Borger, Vice President of Bethesda, Md.-based Donohoe Commercial Real Estate, has a prime seat at the table in how building codes are developed in Washington, D.C., as a member of the D.C. Construction Code Coordinating Board (CCCB), an all-volunteer, mayor-appointed body that writes building codes for the District. The CCCB in turn works closely with Technical Advisory Groups, comprised of subject matter experts related to various provisions of the building code, he says.
Borger finds it problematic that full, searchable international codes come with a cost and are thus not easily accessible to the general public. When the CCCB approves its amended versions, the board publishes them in the D.C. Register and add links to government websites. “Our goal at the code board is to make as small a change as possible to meet the requirements of the District of Columbia,” he says.
To keep abreast of what’s happening in Maryland and Virginia, where Donohoe and its Borger Residential division (the former Borger Management merged with Donohoe on January 1) also does business, the company stays in touch with local lobbyists in both state capitals from the Apartment Office Building Association (AOBA), Borger says. Government affairs committees meet monthly in all three jurisdictions to review the latest developments found in newsletters, blog posts, webinars and emailed updates. “If there are code changes that impact us, that will be brought up for member discussion and input,” he says.
Overall, echoing NAA’s view, Borger sees the building code first and foremost as a fire-life-safety structure code that ensures safe structures. But in the last couple cycles of amendments in D.C., energy efficiency measures have been codified that in many cases exceed federal requirements—increasing construction costs and, in turn, rents.
“Keeping that in balance with the District’s requirements for energy efficiency, as well as trying to preserve affordable housing, is a very tough thing,” he says. “I’ve been on the record numerous times that building owners, whether multifamily or commercial, have an incentive for energy efficiency because it keeps costs down. But at some point, you reach a point of diminishing returns. You can put in LED lighting—but you don’t want to dim the lighting in a corridor. To me, that’s a safety issue. Those are the things we try to balance.”
A hot issue in D.C. at the moment is the City Council’s proposal to ban the use of natural gas in all newly constructed buildings, Borger says. “There’s been a lot of push-back from multiple industry groups—colleges and universities, commercial laundromats—who have had discussions on what kinds of carveouts are acceptable,” he says. “Whether it be a commercial kitchen, or in the case of an apartment building, a rooftop grill where propane would not be safe, we’re actively discussing that right now.”
Another issue the CCCB has been exploring is the use of energy-efficient mass timber in new construction. “Changes being added [to the building code] are mostly for green energy—airtightness, insulation—that don’t necessarily have to do with the stability and fire-life-safety of the building,” Borger says. “But new technology comes around all the time. This mass timber is new—it’s exciting, it’s environmentally sustainable. When new technologies come out, we look at them and take expert opinion on where we should go with them.”
The question of EV chargers is one that Borger says code-writers should weigh carefully. “Do we let the free market figure out what kind of chargers and how many?” he says. “If you codify it, are we limiting new technology coming out in the future? … Should we ask [residents] what’s their demand for charging—and if there’s demand, we add chargers, and if there’s not, we don’t? This technology, especially on the green side, is changing so fast.”
And that’s problematic in part because changes to the D.C. Code can take almost three years to become law from the time the CCCB weighs an issue, decides to adopt an international regulation in some form, puts a notice in the D.C. Register, takes comments from the public and possibly amends it further, Borger says.
“For the most part, we don’t receive much input from the general public, but instead receive comments and input from special interest groups,” he says. It’s important that if we get any special interest group, we talk to the other side, so the code doesn’t just go one way, on green energy, car charging, insulation, roofing material. The special interest groups are very vocal about some of the changes they want to see made.”
Ed Finkel is a frequent contributor to units.