The 2012 edition of the International Energy Conservation Code (IECC) was recently released, and multifamily builders and owners are giving it a big thumbs down. The bad news for the industry: Construction costs will rise, putting a great financial strain on multifamily building. The bad news for renters: Rental rates are likely to increase, and affordable housing will become even scarcer. Complying with the 2012 or earlier, 2009 IECC standard could be complicated by a host of variables, including where the property is located, the size of the building, and the use of the property, all of which can have varying effects on the cost of compliance for multifamily builders, owners, and managers. Worse yet for owners, the updated codes don’t promise a timely payback.
According to the report “Impact of the 2009 and 2012 International Energy Conservation Code in Multifamily Buildings,” conducted by Atlanta-based Niles Bolton Associates for the National Multi Housing Council (NMHC) and the National Apartment Association, the average payback period associated with adopting the codes is 191 to 252 years.
Paula Cino, the NMHC’s director of energy and environmental policy, reacted to the research much as many eco-conscious multifamily owners might. “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,” such as the electricity expended from various consumer appliances.
Builders can expect costs per unit to increase for construction items such as mechanical and lighting systems, ductwork, insulation, and insulated windows and doors if the codes are adopted.
The real problem, pointed out in the report, is that the changes associated with the 2009 and 2012 energy codes could compromise affordability, an issue with which many renters are already struggling. Investments in energy-efficient upgrades are becoming more and more prevalent, as a new generation of eco-conscious renter demands a home that reflects their concerns about environmental impacts. But as code-compliance costs rise, so too will rental rates and amenity fees.