Homeowners, are you being punished for doing nothing wrong? The true cost impacts of evolving building codes

7 March 2019

There is a pretty hot topic going on around the country, but if you aren't a home builder or tradesmen there is a good chance you haven't heard anything about it...

Here's the kicker: you're at the heart of the discussion.

The question is a matter of what codes to select for home building, and it's happening across the state of Tennessee, as well as other parts of the country.

Right now, the state of Tennessee is on the 2009 & 2006 sets of codes. Nashville is on the 2012 codes, but amended to the point that they are basically the 2009. (For your reference, a new set of codes is published every three years that prescribes how to safely, effectively, & efficiently build homes.)

What I'm saying in a nutshell

We use a lot of car analogies, so let me try another one here:

If you were buying a new car, and I'm talking brand new, would you be okay buying one made to the 2009 standards of fuel efficiency, comfort and tech? We're talking 19 mpg, CD & cassette player, etc?

So why are you with a house? Its a place you'll spend more time in every day, and that you'll have for longer than a car.

So what is the argument against upgrading codes?

In a nutshell: cost.

There are some other arguments, but the bottom line of it boils down to cost. Will it cost too much for a builder to build? Will it add too much cost to a home so that you can't afford to buy a new home?

And that is a great argument, and an important question to note. It's also one we'll get to in a minute.

And what is the argument for upgrading codes?

Basically: quality and safety.

This may or may not surprise you, but the building industry is seriously scientific. There are tons of groups doing research on different building techniques, trying to invent new materials (sheathing, insulation, windows, you name it), and innovating in designs.

So every three years a group of industry professionals convenes and they put together the new set of codes (its obviously not that simple, but the process of writing the codes isn't the topic here).

What you get from a newer code is a more energy efficient home. It will (most likely) also be more durable and resilient, meaning lower maintenance costs. Finally, it will be a healthier home because you'll have cleaner air to breathe & fewer contaminants like mold.

Don't worry, we'll walk through that in a minute, too.

What are the increased costs to build to the 2012, 2015 or 2018 ICC?

In general, there are stricter requirements on quality of materials to be used. Also, the standards for performance during code testing are more stringent.

What will you get? Well, you'll get a much more insulated home. The jump from 2009 to 2012 requires that homes increase the insulation in both the walls and the ceilings.

The jump to 2018 also requires an increase in doors and windows ability to prevent heat loss.

[Quick note: insulation doesn't just keep your house warmer in the winter. It will also help keep your home cooler all summer. What that really means is that you won't have to use as much energy (or money) to make your home a comfortable temperature.]

On the performance side, when you jump from the 2009 to the 2012 IECC (the ICC dealing with energy & energy efficiency) the home and ductwork have to make big jumps in terms of how leaky they can be.

To builders and tradesmen this means they have to be much more diligent in air sealing every part of the home and ductwork. It doesn't add much of an increase in cost, but it does take more time and effort. The major driver of cost increase is the new levels of insulation. Depending on how the builder chooses to reach those numbers, it can come with a bit of a price tag.

To you, this means that you won't be paying to condition air that then leaks out of the home or into your unconditioned crawlspace/attic.

Another big change is the requirement for high-efficacy lighting. This basically will manifest itself as no more incandescent bulbs being used, and mostly making the switch to CFLs and LEDs. For more information on that, check out our other blog on lighting, or use this other great resource.

All sorts of different groups have done research and analysis on what the total costs would be for homeowners, and each group has a different projection of what those costs would be...and you know what? That makes sense. Every single builder has a different set of costs depending on the materials they pick, the design of the home, the cost of the subcontractors, the plot of land & the margin they are going to make for doing their job.

However, every estimate agrees on two things:

  1. There will be an increased upfront cost for homebuyers (projections range from $235 to $4,000 on the downpayment)
  2. There will be a positive ROI for homebuyers (meaning that over the term of the mortgage, you will actually pay less money due to energy savings alone, not even factoring in maintenance costs) (projections range from 10 months to 17 years)

What are the potential savings due to upgrading to the 2012, 2015 or 2018 ICC?

The primary driver of savings will be lower utility bills. Often that's a downplayed concern here in Tennessee thanks to our low utility rates coming from TVA. However, the numbers I'm going to tell you in a second are specifically aimed at Tennessee, and they are still pretty wild.

The other places you may save are through having to do less repair and upgrades to the house (that's time and money), and in decreased medical bills. That last one may not make sense initially, but check out these other blogs here about the associated medical effects from energy efficiency(mold, VOCs, radon).

Now, on to energy bills.

Just like we saw a spread on increased costs, there is a wide spread here. This is because there is a big spread in how efficient homes are, and there are also a ton of behavioral factors that really can increase or decrease your bills (like what temperature you have your house at, how much hot water you use, and how long you run lights for). Finally, the amount you save is affected by the extra amount spent, and so is the amount of time it will take to see a positive ROI.

Overall, the range for energy savings that these reports found is $200 to just over $400 each year; that's enough to max out a month's Roth IRA contribution, or its groceries or finally fixing that wonky thing on your car.

What's the bottom line on the cost of upgrading the building code?

You will spend slightly more money up front, and you will see real savings from that investment in a couple of years.

Once you total up all the costs, it seems like a no-brainer. We use a lot of car analogies, so let me try another one here:

If you were buying a new car, and I'm talking brand new, would you be okay buying one made to the 2009 standards of fuel efficiency, comfort and tech? We're talking 19 mpg, CD & cassette player, etc?

So why are you with a house? Its a place you'll spend more time in every day, and that you'll have for longer than a car.

 

https://www.tn.gov/commerce/fire/residential-permits.html

https://www.nahb.org/~/media/Sites/NAHB/Research/Priorities/construction-codes-and-standards/research/Estimated%20Cost%202012%20IRC%20Code%20Changes.ashx?la=en

https://www.homeinnovation.com/trends_and_reports/featured_reports/estimated_costs_of_the_2015_irc_code_changes

https://www.nahb.org/en/research/nahb-priorities/construction-codes-and-standards/code-adoption/-/media/F547E473BA2643F8963F960A59DDA636.ashx

http://bcapcodes.org/wp-content/uploads/2015/11/Tennessee-cz4-2012-IECC-Incremental-Cost-Analysis.pdf

http://bcapcodes.org/tools/ica-2012/

https://www.energycodes.gov/adoption/states/tennessee

http://bcapcodes.org/tools/ica-2012/tennessee-cz4-2012-iecc-incremental-cost-analysis/