Code Games
Happy Tuesday and welcome to another edition of Rent Free. This week’s stories include:
- A federal appeals court slaps down the federal government’s odd argument that it doesn’t have to compensate landlords for its eviction moratorium because the moratorium was illegal.
- Vice President Kamala Harris sets a first-term goal of building 3 million middle-class homes.
- A Michigan judge sides with property owners trying to build a “green cemetery.”
But first, a look at an under-the-radar federal regulation change that might make it easier for builders to create more small multifamily “missing middle” homes.
Code Games
In his 1942 book Capitalism, Socialism, and Democracy Joseph Schumpeter praised capitalist mass production for bringing almost every basic commodity, from food to clothing, within the affordable reach of the working man. The one exception he highlighted was housing, which he confidently predicted would soon see a similar collapse in prices due to mass-produced manufactured housing.
As it happens, manufactured housing production—which is built in factories and then shipped and installed on-site—peaked in the mid-1970s and has been limping along as a small share of overall home construction ever since.
Nevertheless, the dream that cheap, factory-built homes can deliver lower-cost housing has never died.
It’s certainly alive and well in the current White House.
This past week, the Biden-Harris administration released a “fact sheet” of actions it was taking to lower housing costs. It included an in-progress regulatory change that would allow two-, three-, and four-unit homes to be built under the federal manufactured housing code set by the U.S. Department of Housing and Urban Development (HUD).
“The HUD Code creates economies of scale for manufacturers, resulting in significantly lower costs for buyers,” says the White House in that fact sheet. Letting small multifamily housing be built under the HUD code will extend “the cost-saving benefits of manufactured housing to denser urban and suburban infill contexts,” it says.
IRC, IBC, IDK
The proposed change comes at an interesting time for small multifamily housing construction.
Across the country, more and more states and localities are allowing more two-, three-, and four-unit homes to be built in formerly single-family-only areas.
That liberalization of the zoning code (which regulates what types of buildings can be built where) has set off a follow-on debate about which building code (which regulates construction standards) newly legal multiplexes should be regulated under.
Currently, the options are either the International Building Code (IBC) or the International Residential Code (IRC).
The IBC and IRC are model codes created by the non-profit International Code Council, which are then adopted (often with tweaks and changes) by states and localities.
The IBC typically covers apartment buildings of three or more units, while the IRC covers single-family homes. Neither is particularly well-suited for the regulation of smaller multi-family buildings that cities are now legalizing.
The IBC, for instance, requires expensive sprinkler systems that don’t do much to improve fire safety in smaller buildings but can make their construction cost-prohibitive.
Zoning reformers have responded by trying to shift the regulation of smaller apartments into the IRC. But that raises its own problems, says Stephen Smith of the Center for Building in North America.
“It’s a complicated thing to do because the IRC is not written for small multi-family. It’s written for detached single-family,” he says. “For traditional apartment buildings with a single entrance and stairs and halls and stuff, it’s not really clear how the IRC would work with that.”
The White House’s proposed changes open the possibility of sidestepping this IRC-IBC dilemma entirely by letting builders of manufactured, multifamily housing opt into a single, national set of regulations.
A Floor or a Ceiling?
The question then is whether this will actually make life easier for builders.
The effect of HUD regulation on the production of single-family manufactured housing is a topic of intense debate.
Prior to the 1970s, manufactured housing was governed by a patchwork of state and local building codes. In 1974 Congress passed legislation that gives HUD the power to regulate manufactured housing.
Critics of HUD regulation argue that its initial implementation caused the steep decline in manufactured housing production in the 1970s.
In particular, they point to the HUD requirement that manufactured housing mus
Article from Reason.com
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