Regardless of all the talk of a recession, soft landing, or something in between. Many…
A local HVAC contractor said of the new code “This is like a really obese person drinking a 12-pack of Diet Coke and feeling good about themselves.” What is in Aspen’s new building code proposal? What impact will this have on new construction, property values, and affordable housing?
What is in Aspen’s new building code proposal?
The new building codes make 49 amendments to the International Building Code, which is the international standard for building safety and efficiency. Some of the larger changes:
- automatic fire sprinklers
- fire-resistant exteriors on all new homes.
- Insulation requirements are all increased, with a requirement for triple-pane windows in all new homes.
- All air conditioning units in new homes must be heat pumps.
- The new codes cap the total amount of energy spent on exterior heating at 200 million BTUs for all homes
- The new building codes incentivize electrification of everything with expedited review of homes that run on just electricity.
Will the proposals increase costs?
Absolutely, the proposals will add significant costs and expenses to any new builds or remodels. On a percentage basis, it will likely not be huge as the average build price is well over 1,500 a foot.
Will the new building codes requirements slow building in Aspen?
It is highly unlikely that new building codes will do anything to dent the insatiable appetite for new construction/remodeling in the area. They will increase the “hassle factor” of approvals, but will not do anything to slow the pace of construction.
Will prices increase due to the new building requirements
Making new construction more expensive will only increase existing property prices. I do not think this will be a monumental shift as prices are already extremely high, but it will definitely help ensure prices remain high for existing properties.
How will the new building codes impact affordable housing in Aspen
Unfortunately the affordable housing ship has already sailed in Aspen, any affordable housing would be down valley and not subject to the Aspen city building regulations. But if affordable housing is an option on infill properties it would cost substantially more to construct due to the building code changes.
Whatever happens in Aspen, typically happens in other ski towns whether it is nightly rental regulations, development applications, etc… Once Aspen works the bugs out of the new building codes look for other mountain towns to quickly follow suit. I understand the premise behind the new regulations, but I don’t think they will be market moving. A local HVAC contractor summed up the new regulations: “The city is pursuing goals that can be quantified as having a positive effect but if you look at the overall metabolism of the city, are you reducing its obesity? This is like a really obese person drinking a 12-pack of Diet Coke and feeling good about themselves.”
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Written by Glen Weinberg, Owner Fairview Commercial Lending. Glen has been published as an expert in hard money lending, real estate valuation, financing, and various other real estate topics in Bloomberg, Businessweek ,the Colorado Real Estate Journal, National Association of Realtors Magazine, The Real Deal real estate news, the CO Biz Magazine, The Denver Post, The Scotsman mortgage broker guide, Mortgage Professional America and various other national publications.
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