Will New Energy Codes Raise Multifamily Construction Costs?

Posted by Orb Staff on March 29, 2012 No Comments
Categories : Commercial Mortgage

11201_cre_construction Will New Energy Codes Raise Multifamily Construction Costs? New energy codes could add thousands of dollars to the construction costs of each individual apartment residence in a multifamily building, according to new research commissioned by the National Multi Housing Council (NMHC) and the National Apartment Association (NAA).

According to the NMHC and NAA, the research examines the costs of adopting the 2009 International Energy Conservation Code (IECC) and the recently released 2012 IECC, which they say represents a ‘significant departure from the 2006 IECC code, adding upwards of hundreds of thousands of dollarsin additional costs to new construction. These new burdens come at a time when the U.S. is already suffering from a shortage of affordable housing.’

Key findings of the new energy code research, which was completed by multifamily architect firm Niles Bolton Associates Inc., include the following:

  • Compliance costs differ widely based on the type and location of the building, and these cost differentials are not consistent across the codes;
  • Compliance costs for the 2009 and 2012 codes will range between $760 and $3,590 per apartment unit in a low-rise building and soar to $1,860 and $4,440 per unit in a high-rise project in moderate climate zone areas;
  • The 2009 IECC will be most affordable for high-rise buildings in warmer climate zones – costing approximately $90 to $140 per apartment unit.
  • In cooler climates, however, the cost increases for high-rise properties range from $940 to a whopping $3,410 per unit, depending on the specific building location and design characteristics.

‘We support building efficiency,’ says Paula Cino, NMHC's director of energy and environmental policy. ‘Apartments are, by definition, more energy efficient than other residential options, such as single-family houses. But these codes are meant to set minimum requirements, and they set a very expensive minimum. In some cases, it would take more than 200 years for the energy savings produced by the codes to pay for the required upgrades.

‘Relying on the building codes to improve building energy efficiency is a flawed strategy because much of a building's energy use is outside of the scope of building codes,’ Cino adds. ‘Only counting the changes covered by the building codes forces property owners to invest in expensive changes to the building shell to meet increasing energy-conservation thresholds. In many areas of the country, these codes would require dramatic changes to the way apartments are designed and constructed.’

The full research is available onlines.

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