{"id":176171,"date":"2024-08-07T14:01:27","date_gmt":"2024-08-07T20:01:27","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=176171"},"modified":"2024-08-07T14:04:08","modified_gmt":"2024-08-07T20:04:08","slug":"how-building-codes-have-impacted-the-housing-crisis","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-building-codes-have-impacted-the-housing-crisis","title":{"rendered":"How Building Codes Have Helped Create Gigantic Supply Gaps."},"content":{"rendered":"\n

The affordable housing crisis in the U.S. is getting worse, according to a new <\/span>report<\/span><\/a> from the Joint Center for Housing Studies of Harvard University. While many factors are to blame for the increase in cost-burdened homeowners and renters, experts agree that constrained supply <\/span>is keeping<\/span> housing costs elevated. <\/span><\/p>\n\n\n\n

Many point to the strict zoning ordinances in most cities as the <\/span>primary barrier<\/span><\/a> to new housing construction. The <\/span>YIMBY<\/span><\/a> (\u201cYes In My Backyard\u201d) movement, which has support from both sides of the political spectrum, aims to relax zoning laws in cities <\/span>across the nation<\/span>. <\/span><\/p>\n\n\n\n

Local governments have responded with a <\/span>wave of zoning reforms<\/span><\/a>, including changes that allow <\/span>ADU development<\/span><\/a> in many cities. But, some <\/span>research<\/span><\/a> shows these reforms have a limited impact on the <\/span>supply of housing<\/span>, and many developers have called attention to the regulatory hurdles that remain. <\/span><\/p>\n\n\n\n

Recent revisions to standard <\/span>building codes<\/span><\/a> have had the <\/span>largest impact<\/span><\/a> on multifamily development costs over the last decade, according to a report from the National Multifamily Housing Council (NMHC) and the National Association of Home Builders. In addition, a recent NMHC <\/span>survey<\/span><\/a> of developers, builders, and operators found that 89% of respondents believe building codes affect the cost and feasibility of new projects. <\/span><\/p>\n\n\n\n

It\u2019s a complex problem that doesn\u2019t have a straightforward solution. Building codes have an <\/span>important<\/span> purpose<\/span><\/a>\u2014primarily, the health and safety of residents. Repealing them entirely could lead to unsafe living conditions and even further reduce the supply of homes due to the effect of quality uncertainty on local housing markets. Building codes aren\u2019t inherently costly, but local governments are beginning to question whether the newer code updates, which include energy efficiency and aesthetic standards, add unnecessary costs to new development without delivering sufficient benefit. <\/span><\/p>\n\n\n\n

Problems vary from one market to the next, but we\u2019ve identified six key issues with building codes that may <\/span>be negatively impacting<\/span> housing affordability. <\/span><\/p>\n\n\n\n

Standard Building Codes Lack a Necessary Flexibility, but Local Nuances Are Also a Problem for Developers<\/span><\/h2>\n\n\n\n

Building <\/span>standards that are flexible<\/span> depending on the climate, housing market, and type of building can improve the average affordability of new developments. For example, applying the same <\/span>fire safety standards<\/span><\/a> to small apartment buildings as large apartment buildings puts an unnecessary cost burden on developers of small buildings. <\/span><\/p>\n\n\n\n

Most municipalities use the International Building Code (IBC) for buildings with greater than two units, which requires the installation of sprinkler systems. <\/span>That cost cuts into profits and may make <\/span>it infeasible to build<\/span> an affordable fourplex in some markets.<\/span> <\/span><\/p>\n\n\n\n

Likewise, enhanced standards may be necessary for the specific climate threats of a particular jurisdiction, but uniformly applying those standards to all communities may induce an unnecessary cost burden in some. <\/span><\/p>\n\n\n\n

For example, building components <\/span>need to<\/span> withstand <\/span>high wind speeds<\/span><\/a> in areas at risk for tornadoes. <\/span>The<\/span> geographical location and footprint <\/span>of a building<\/span> determine the minimum requirements for safe construction. Designing for high wind speeds is more expensive, so it pays to adapt the building code according to the <\/span>threat level of the area<\/span>.<\/span> <\/span><\/p>\n\n\n\n

However, <\/span>several states<\/span><\/a> have statewide codes and don\u2019t allow for local amendments. Below is a visual of how codes are adopted by state.<\/span><\/p>\n\n\n