Wednesday, February 17, 2021

Going Beyond Minimum Building Codes

Recently I was approached by a building science expert to help get the word out that building to minimum building codes is not enough and higher energy savings and sustainability options should be used to build today’s new home.

Although I agree that minimum standards may not be enough, we have to look at the end consumer and ask them if they want higher standards. Then we have the modular housing industry which always seems to be held to a higher standard than site-built homes.

First, let’s take a look at why we have building codes. Having building codes protects us from structural, sanitary, and fire disasters while ensuring a minimum level of energy efficiency in buildings. The most widely used building standards in the US is the International Residential Code (IRC). New and improved Codes are the result of a problem, not its cause. 

Most new home buyers mistakenly believe that building a home to meet code means that it’s built to some great standard. The code doesn’t address best practices or suggestions about better options. It simply sets a bottom threshold to be used as a minimum.

Not only are there minimum codes, but there are also different versions of the IRC, depending on which year’s version a state chooses to adopt. Some states simply adopt the newest version while other states may continue using versions that are almost 10 years old.

After a state adopts a particular IRC version, the state may add more to it and even that version can be updated at the local level where even more stringent codes can be adopted. 

There are states where building codes are not enforced as vigorously as other states. There are even local planning and code offices that simply require just paying for a building permit is enough.

Building codes are extremely important, especially in urban areas, and generally speaking, they are strictly enforced in urban areas. 

The real culprit in not wanting to improve new home building standards isn’t the local builder or the modular home factory. No, it’s the tract builders who know that building to the absolute minimum standard is enough to get it passed for occupancy at a lower price than any local builder can match.

Then we have to look at financing a home built to a “higher than minimum” building code. One of the oldest axioms in selling is the customer asking “how much down and how much a month?”

Mortgage lenders require an appraisal for a new construction home before approving the loan to ensure the property is worth the amount of the loan it's contemplating extending the new homeowner.

Appraisers generally use the cost approach when considering values for new construction homes. The cost approach adds the estimated cost of the land on which a planned home will sit together with the current cost to replace or reproduce it.

It’s really easy to have a good appraisal when purchasing a new home from a tract builder. Lots of comps and recent sales. 

Looking at the scattered lot new home buyer and things tend to get a little tougher for the appraiser, especially when the builder and homeowner(s) want to pack a lot of things into the home above the minimum code standards. Adding a ground source heat pump, solar panels and other things like super-insulated walls, roof and floors can run the new homeowner a couple hundred dollars a month.

Since mortgage lenders want to make sure they can at least get back what the borrower owes on the house in case of default, sometimes adding all those energy-savings and sustainable options might not make it a good investment for the lender, especially when a new home is being financed with only 3% down.

I recently had a builder tell me that he builds to meet code and nothing more. He said lumber and building material costs are rising faster than he can keep up and building to the minimum code requirements make it a lot easier to stay profitable. Not sure he’s right about that but I think he’s not alone in his thinking.

There are so many things that can be added to a new single-family home that is far better than code requires but at what expense to the new home buyer. And would all those very good options keep the house from actually being “affordable” to most new home buyers?

It would be great to hear what you think of “going beyond the minimum?”

Gary Fleisher, the Modcoach, writes
Modcoach News and Modular Home Coach blogs as well as the best site for off-site consultants, Modcoach Connects

Contact Gary at

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