Costly new state building code impact unknown

Just when it seems the housing construction industry may be gaining some strength for a 2010 recovery, Gov. Christine Gregoire is asking for a faster implementation of more strict energy efficiency standards that could have a serious impact on any recovery, according to two concerned state legislators.

In October, the State Legislature’s Joint Administrative Rules Review Committee (JARRC) voted unanimously to require the Washington State Building Code Council (SBCC) to provide specific details about the costs and economic impacts of proposed changes to the state’s building code.

The rare meeting was prompted by JARRC members Reps. Dan Kristiansen and Joel Kretz of Omak (R-Wauconda, 7th District) who expressed concerns that the SBCC did not adequately spell out potential costs and job losses to those who could be impacted by the increased regulations.

“It’s been estimated that more than 15,000 employers are going to be potentially affected by these rules. We need to have a more rigorous and accurate estimate of how these new codes would affect jobs and employers before we move forward,” said Kristiansen, who serves as House Republican Caucus chairman and is a former small-business owner in the construction industry.

Kristiansen and Kretz contend the Legislature set implementation parameters this year when it passed Senate Bill 5854. The measure incrementally increases energy efficiency codes for buildings, beginning in 2013, with the goal of a 70 percent reduction in energy consumption by 2031.

“In direct conflict with the law, the governor directed the SBCC to move the timeline up to require a 30 percent reduction in energy consumption for buildings by 2010,” Kristiansen said.

A cursory small business impact statement provided by the SBCC noted that “the number of jobs created or lost as a result of compliance with the proposed rule is unknown.”

Kretz said it’s unacceptable to advance such heavy-hitting and costly regulations without knowing the impacts to employers and jobs.

“There were a lot of questions in the Legislature on the timetable of moving forward with the code changes,” he said. “Unanswered questions were the reason the timeline in the bill was pushed out to 2013.”

The two legislators want answers to such questions as whether the energy savings and cost-benefits are accurate; do these changes make sense in the current weak economy; what is the impact on jobs and could the changes impact potential financing for projects?

“All those things are concerns,” said Kretz. “This analysis cannot be business as usual. It needs to be more rigorous and require a higher standard.”

The SBCC report also noted that the proposed code changes would result in less than a quarter percent change of cost for many of the modifications. Kristiansen said he believes the council low-balled those figures, which were based on theory from code change proponents, not from builders or suppliers.

“The people I’ve talked to about these costs, who are out there providing the materials, found it laughable and not even close to reality. I still think the goals of energy reduction are laudable. However, I want to make sure it’s not going to cost me 30 percent in building expenses to save 15 percent on an energy bill,” noted Kristiansen, R-Snohomish.

“Are we going to add $30,000 to a $300,000 house so that I can save $20 a month?” asked Kristiansen. “We really need to have a good estimate on materials and labor costs. What we are seeing here is too broad and too vague. I don’t think it’s accurate, especially if it is coming from theoretical expertise rather than from those who have actual experience with the hard costs. We need clear information about whether the benefits would outweigh the costs.”

Kretz, who serves as vice-chair of JARRC, proposed two motions. The first requires the SBCC “to include a more rigorous and detailed analysis of the comprehensive impact of the proposed 100 or more changes on small businesses,” including an estimate of how many jobs would be lost or created.

The second requires a more detailed cost-benefit analysis of the proposed code changes. The motions were approved 5-0.

The SBCC has held public hearings in Renton and Spokane on the accelerated code changes and had intended to adopt the rules during its Oct. 29 work session. The results of the new cost-benefit analysis and small business impact statement, including estimated job losses, have been requested prior to approval of the building code changes.

Efforts to move ahead with requiring the code changes have been moved into early December but Kristiansen and Kretz are contining to push for more accurate research on the impact of the proposals.

Further information is available from Rep. Kristiansen at 360-786-7967 or from his web site, www.houserepublicans.wa.gov/Kristiansen.