Stretch Code Changes Have Developers Seeing Red, Not Green

This article appeared in the May 28, 2012 edition of Banker & Tradesman.

“Green building” is a term that can be broadly defined. For some, it may mean building a LEED Platinum building. For others, it could be installing water and energy saving measures. There is no question, however, that most developers are more conscious of green building practices. The question is how to encourage this movement? The industry believes the market should be allowed to lead the way when it comes to green building. Mandates imposed by the government requiring specific technologies or energy efficiency measures are not the most effective way to get there. They will only increase costs and slow development of all building types.

The Stretch Energy Code mandate passed in 2009 is one example of government’s attempt to promote energy efficiency. This local option code applies to both residential and commercial buildings. More than 100 communities have adopted it to date. Under the Stretch Energy Code, commercial buildings are required to meet higher energy efficiency standards – approximately 20 percent more than the current statewide energy code.

In 2012, the statewide energy code, as required under the Green Communities Act passed in 2008, will be updated to comply with the more energy efficient International Energy Conservation Code (IECC 2012) – an energy efficiency increase of approximately 20 percent over existing standards. Massachusetts will be leading the way by adopting this new energy code (only two other states have adopted the IECC 2012 to date). Furthermore, the statewide energy code must be updated within one year of any revision to the IECC – contributing to the commonwealth’s current position as the national leader in energy efficiency.

Change Is Coming

However, a change is being proposed to the Stretch Energy Code that will jeopardize our recent, modest economic recovery. In June, the Massachusetts Department of Energy Resources (DOER) is planning to propose a 15 percent increase to the current Stretch Energy Code (to take effect when the IECC 2012 is adopted for the rest of the state). In other words, the new Stretch Code would require buildings to be 35 percent more energy efficient than the current statewide code. Such a change would increase the cost of the construction and maintenance of residential and commercial buildings. Current rents, even in traditionally high rent communities, would be challenged to cover the increased costs associated with such projects. In addition, the change would dramatically alter project design, affecting their marketability to tenants.

Many communities chose to adopt the Stretch Energy Code in order to qualify as a Green Community. By earning this designation, they became eligible for grant money that could be used to make energy efficient upgrades in public buildings. Green Communities are required to minimize the life cycle costs of buildings by utilizing “energy efficiency, water conservation and other renewable or alternative energy technologies,” but this requirement could be achieved by adopting the IECC 2012 rather than the Stretch Energy Code.

Most of these Stretch Code communities believed that once the statewide building code was upgraded to the IECC 2012, the entire state would be on a level playing field. Unfortunately, many cities and towns are now discovering that the changes to the stretch code will take effect automatically in all Stretch Code communities without any vote by City Council or Town Meeting. Furthermore, many Stretch Code communities were not aware that they would continually be subject to an automatic upgrade every three years.

Given the impact this extreme proposal will have on housing production, jobs and a very fragile economic recovery, it is time to recognize its unintended consequences. Maintaining the commonwealth’s lead in energy efficiency should not come with a price tag we cannot afford – the loss of jobs and economic growth.

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