Housing and New Buildings Codes
"We are at a crossroads of climate and housing." This opening statement, given by Bob Brennan, attorney at Smolak and Vaughn, set the tone for an important and collaborative conversation among building and real estate stakeholders on the impacts of new building codes on the housing sector.
All of the panel agreed that homeowner education is key!
The panel discussion on Sept. 7, The New Reality of Climate-Friendly Building Codes, was organized by Middlesex 3 as part of their Real Estate Leadership Series. The goal was to gain critical insights into the new Municipal Opt-In Specialized Stretch Code and the impacts, challenges, and opportunities the adoption of this code will present to the real estate and construction industry. Bob went on to talk about the basics of the Specialized Stretch code and the historical benchmark of 2006 which is the index year for the Heat Energy Rating System (HERS). At that time, the building code demanded a 100 HERS rating. Our current stretch code for new home construction is a HERS rating of approximately 52-55. The Opt In Specialized Stretch Code will move us towards a HERS rating of 42 which is necessary to achieve net-zero greenhouse gas emissions by 2050.
The biggest concern to real estate agents and builders is adding additional costs to the building of homes. The home building industry is trying to figure out how to offset those costs through the possible use of zoning reforms, legislation, state tax credits, and highlighting the increased value of homes built with a better HERS rating.
Recently, two studies were published by Wentworth Institute and MIT to find out the cost differential in building a new home under the Specialized Code. They found that the cost of a single family home increased by $23,000 and that the cost for a multifamily home increased by 2-3%. It's important to note that these figures do not factor in federal and state incentives and rebates. Unfortunately these studies compare the opt-in stretch code to the old stretch code, not current stretch code, so they do not accurately portray the cost differential. The current stretch code is much closer to the opt-in specialized stretch code than the old stretch code was.
Joyce Losick-Yang, Andover's Director of Sustainability, talked about the many ways to look at costs and that all need to be factored in when purchasing a home. This includes upfront building costs, lifecycle costs of maintenance and replacement, rebates (e.g. $16,000 savings for putting in a full heat pump system), life-long savings, less exposure to the fluctuations of the energy markets, and healthier indoor air quality through advanced HVAC systems. Adoption of the Opt-In Specialized Stretch Code will avoid costly retrofits by requiring new buildings that are not all-electric to prewire for future electrification.
Both JoAnn Kalogianis Spaneas, CEO of Land and Sea Real Estate and Grace Construction, and Lillian Montalto of Signature Properties International, agreed that there is not widespread acceptance at this point especially with the concern that heat pumps translates to a cold house in the winter. Real estate agents can only sell what people want to buy. Taking a prospective homeowner to see an all electric house is "the kiss of death" given the uncertainty of using heat pumps in New England. Younger homeowners in this area are less interested in the health and energy savings benefits in all electric homes. This does not align with the experience of builders in the Somerville/Cambridge area. In that location, the thirties-to-forties homeowner demographic is driving the desire for energy efficient housing. All of the panel agreed that homeowner education is key!
An additional topic discussed is the readiness of our power grid to handle decarbonization. According to Losick-Yang, National Grid has 20% more capacity than is being used. The question we need to ask is how ready the grid is here in Andover. Decarbonization is part of the solution but we also need to focus on reducing our energy use! Improving housing envelopes will help reduce energy demand as will the improvement of battery storage.
The panel discussion concluded with an acknowledgment that this conversation had been hugely helpful and had opened lines of communication between the public and private sector.
This conversation will continue to unfold over the course of the year as the town of Andover gathers input from tradespeople, architects, builders, and developers on the new Massachusetts Municipal Opt-In Specialized Stretch Code.
