A new survey published by the National Multifamily Housing Council (NMHC) confirms that building codes can raise concerns about construction costs and make it increasingly difficult to develop much needed housing. Nearly 9 in 10 (89%) respondents agreed or strongly agreed that building code requirements in general impact the cost and viability of construction projects. While some of these requirements are necessary to protect the health and safety of residents as well as the integrity of the building or community, it is important to understand the financial impact of imposing each type—particularly in an era of widespread cost increases and worsening affordability problems for renters.
Building codes and standards play an important role as they establish core requirements for the design, construction, alteration and maintenance of rental housing communities. However, as government officials look to implement additional layers of code regulations, rental housing providers would encourage them to consider the reality that expansion to building code requirements can result in increased housing costs that negatively impact residents or may even impede the building of much-needed housing. For example, the survey found that over two-thirds (68%) of respondents agreed or strongly agreed that mechanical/electrical codes posed significant compliance challenges, followed by compliance challenges related to energy performance and efficiency (66%), electrification/net-zero emissions (63%) and fire protection (61%).
In 2022, NMHC and the National Association of Home Builders (NAHB) released a report on the Cost of Regulations. This research found that regulations imposed by all levels of government account for an average of 40.6 percent of multifamily development costs. Specifically, building code changes over the past 10 years were the single largest cost driver to multifamily development costs.
“At a time when we are confronting deep housing affordability challenges, lawmakers should be doing all they can to reduce costs and implement policies that make it easier and more efficient to build new housing and broaden housing supply,” said NMHC President Sharon Wilson Géno. “The current interest rate environment, soaring insurance costs and rapidly increasing state and local taxes are all making it increasingly difficult to build and preserve rental housing communities. We encourage lawmakers at all levels of government to work with rental housing providers to consider policy solutions that leads to the creation of new housing and lowers costs for renters.”
Among other findings, the 2024 NMHC Pulse Survey on Building Codes and Standards determined that:
- Of those respondents who reported challenges, 92% agreed or strongly agreed that those challenges could be attributed to variation in code requirements/interpretation between jurisdictions.
- Similarly, 82% of respondents agreed or strongly agreed that interpretability (i.e., that codes are difficult to interpret) was a source of significant challenges.
Read the full report here.
Based in Washington, D.C., the National Multifamily Housing Council (NMHC) is where rental housers and suppliers come together to help meet America’s housing needs by creating inclusive and resilient communities where people build their lives. We bring together the owners, managers, developers and suppliers who provide rental homes for 40 million Americans from every walk of life—including seniors, teachers, firefighters, healthcare workers, families with children and many others. NMHC provides a forum for leadership and advocacy that promotes thriving rental housing communities for all. 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.
