News Release

Model Energy Codes Could Add Thousands To The Cost Of New Apartment Construction, Seriously Exacerbating Nation’s Affordable Housing Shortage

Contact: Jim Lapides, 202/974-2360, jlapides@nmhc.org
For Release: March 27, 2012

WASHINGTON, DC – 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 Multifamily Housing Council (NMHC) and the National Apartment Association (NAA). The research examines the costs of adopting the 2009 and just released 2012 International Energy Conservation Code (IECC). View the full report online at www.nmhc.org/goto/IECC-Study.

The latest IECC versions represent a significant departure from the 2006 IECC code, adding upwards of hundreds of thousands in 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.

"We support building efficiency," said NMHC Director of Energy and Environmental Policy, Paula Cino in releasing the NMHC/NAA research. "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," says Cino. "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," explained Cino. "For example, the code requires thicker layers of exterior insulation, but when you exceed one inch in thickness, you face challenges installing certain building facades, such as bricks. The thicker walls may require expensive, custom products."

"These higher costs to comply aren’t limited to cold climates," elaborated Cino. "We found that new insulation requirements for a high-rise property in Climate Zone 1, the southernmost region, would cost several hundred dollars per unit."

"We urge policymakers to review this research to thoroughly understand the real implications adopting these codes will have on housing costs in their localities and to use the research to adopt energy codes that balance affordability and energy savings," said Cino.

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

  • Compliance costs differ widely based on the type and location of the building, and these cost differentials are not consistent across the codes.
  • In a moderate climate zone, 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.
  • The 2009 IECC will be most affordable for high-rise buildings in warmer climate zones—costing approximately $90–$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.
  • The costs to comply with the 2012 code are even more extreme. A low-rise building in the two warmest climate zones (Zones 1 and 2) will be required to spend an additional $480–$720 per apartment unit. Low-rise properties in the next two warmest zones (Zones 3 and 4) will spend a minimum of $1,820–$2,160 more per unit.

The report, Impact of the 2009 and 2012 International Energy Conservation Code on Multifamily Buildings, is available at www.nmhc.org/goto/IECC-Study. The web post also includes a series of individual summaries showing the impact of the codes in each climate zone.

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The National Multifamily Housing Council (NMHC) and National Apartment Association (NAA) operate a Joint Legislative Program and represent the nation's leading firms participating in the multifamily rental housing industry. NMHC/NAA's combined memberships are engaged in all aspects of the development and operation of apartment communities, including ownership, construction, finance and management. One-third of Americans rent their housing, and over 14 percent of all U.S. households live in an apartment home. For more information, contact NMHC at 202/974-2300, e-mail the Council at info@nmhc.org or visit NMHC's web site at www.nmhc.org.

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