How New Building Codes Could Sink Your Home’s Value

Building codes are changing faster and getting tougher. You could be in for a costly shock if you do a remodeling job and don’t check codes. Here’s what you need to know.

Development sign in a home's front yard
Image: Simple Sign Inc.

In November 2013, the city of Vancouver, B.C., modified the city building code and outlawed the doorknob.

That's right: the good old doorknob.

Why? Because lever-type door handles are so much easier to use than knobs, especially for people with limited mobility. Ever tried twisting a doorknob with arms full of groceries? A lever handle can be opened with an elbow.

Twenty years ago, mobility and accessibility weren't hot topics. Today, accommodating an aging population and those with limited physical abilities has altered the way our homes are designed. And the Vancouver code is just one example of how changes in society turn into laws that affect our homes.

Bottom-line: You don't want to be asleep at the wheel if you're remodeling, or worse, if you decide to sell and the inspector points out what’s not up to code.

But there is an upside.

4 Financial Benefits of Following Codes

Code changes hike homebuilding prices initially -- up to 5% more than the cost of a house built to older standards -- but code changes can pay for themselves over time.

1. Lower insurance premiums. Bringing an older home up to disaster-prevention standards -- retrofitting hurricane-proof windows in storm-prone areas; adding a steel roof in wildfire regions -- can lower insurance premiums, says Michael Barry, vice president with Insurance Information Institute.

"Almost every insurer is going to look favorably on proactive steps a homeowner takes to reduce the likelihood of a loss," says Barry.

Talk with your insurance provider to see if you get a break. Upgrades that can favorably affect your premiums depend on where you live and the potential disasters you face, but likely candidates include:

  • Fireproof exterior materials
  • Earthquake-strengthened foundations
  • Wind-resistant windows, framing, and roofing
  • Flood-proof landscape and drainage systems

Related: How to Design Your Landscaping to Protect Against Wildfires and Other Disasters

2. Added value when you sell. Homebuyers of the not-too-distant future will look favorably on houses that are built and remodeled to the latest standards of efficiency and safety.

A recent study of sales of new and existing houses by the Portland, Ore.-based nonprofit Earth Advantage Institute revealed that homes with third-party certification for sustainability and energy efficiency commanded an average 8% higher price than comparable new houses, and a whopping 30% higher for existing houses. Earth Advantage advocates for better building practices.

3. Better energy efficiency that saves on utility bills. The U.S. Department of Energy says changes in energy-efficiency requirements from the 2009 International Residential Code (IRC) to the 2012 version will pay for themselves in as little as a few years. 

The Online Code Environment & Advocacy Network, a repository for building best practices and news, agrees. After analyzing costs and benefits for every state, the Network found that a house built to 2012 codes for energy efficiency would cost an average of $1,494 to $2,201 more than one built to the 2009 standards.
However, the 2012 house will see an average energy savings of $296 to $392 per year -- annual savings that would increase as energy prices climb.

Easier-to-heat-and-cool houses mean less stress and maintenance on HVAC systems, plus the cherry on top: cozier homes.

4. Living in much safer houses. Codes make houses more resistant to fires, storms, earthquakes, and other disasters. Stronger, more disaster-resistant homes last longer with less maintenance and fewer repairs than comparable homes built without guidelines, saving money in the long run.

Not only that, but those stronger homes benefit the surrounding community. With less storm damage, post-disaster cleanup is easier and there's less burden on city services. That helps keep municipal budgets under control and translates to less property tax for homeowners.

In fact, studies from Texas A&M University and the National Science Foundation have found that every dollar spent on stronger wind and earthquake protection returns $3 to $16 in savings to the community.

Related: 6 Ways to Protect Your Home from Extreme Weather

What Does a Homeowner Need to Know About Codes?

You can't be expected to have an encyclopedic knowledge of building codes. But even if you're hiring a general contractor, you should check with your local building department for information and advice on your project, including:

  • What codes directly affect the work
  • What permits are required
  • What's required for plans and how to submit them

Your building department may have brochures that'll guide you through the permitting and inspection process.

If You're a DIYer or Acting as Your Own General Contractor

Being your own general contractor or doing all the work yourself shifts the burden of code knowledge over to you. If you're inspected and not up to code, you might face an expensive tear out and redo. 

If you try to sidestep codes (and permit costs) and get caught, you could be fined. For example, the city of Clarkstown, N.Y., recently proposed revamping fines for code violators, charging up to $15,000 and requiring jail time for repeat offenders.

Head off unknown code snafus by chatting up your project with your building department. Ask what codes affect your project, and where to get instruction for compliance. Think of your remodeling permit cost as payment for that know-how.

Why Do Building Codes Change?

Codes change in response to new building technologies, new construction methods, new materials, and society's needs. That last is important because the needs of society often trump the added expense a code change might cause a builder or homebuyer. 

Building codes are changing at a more rapid pace than ever, notes Glenn Mathewson, a Colorado building inspector and certified master code professional.

"The 2000 IRC was about 560 pages," he says. "The 2012 version is about 968 pages. New products, new technologies -- in my opinion, we are close to being overwhelmed by code changes."

How Have Building Codes Changed Our Homes?

Headlining societal topics that have caused significant changes to building codes over the past 10 years include:
Water conservation: low-flow toilets, faucets, and shower heads; irrigation restrictions in times of drought.

Pollution reduction: particulate emission standards for wood-burning stoves; restrictions on open burning; reduced VOC allowances for materials, paints, and other finishes.

Ergonomic safety and convenience: increased illumination; smoke and carbon-monoxide detectors; stair construction and handrail design; emergency egress.

Preventing damage from storms and other disasters: High-performance, wind-resistant materials such as roofing and windows in areas at risk for storms; bracing and metal framing straps required in high-risk areas; earthquake proofing; flood prevention techniques.

Fire: Outlawing wood shake roofs in fire-prone areas; mandating fire-resistant doors between garages and houses.

Saving energy: new standards for insulation values; ductwork sealing; light bulb efficiency.

Building codes callout

Who Makes Building Codes?

Proposed residential building codes are written by the International Code Council, or ICC. The ICC is made up of more than 50,000 regulators, builders, designers, manufacturers, and other industry professionals. Any ICC member can propose new codes or changes to existing codes.

The proposed codes for homes, the International Residential Code, is updated every three years.

Are All Building Codes the Law?

The IRC is a guideline; codes don't become law until mandated by state and municipal authorities.

It's up to your local regulators or building commission to adopt, amend, or choose to ignore IRC updates. For example, requiring earthquake-proof foundations makes more sense in Southern California than, say, Wisconsin.

With so many variables, codes can differ even between adjacent cities. That can make keeping up with codes a challenge for contractors who cover large areas.

Some Things in My House Aren't Up to Code — Am I Breaking the Law?

For the most part, you aren't breaking the law if your house has code violations that are grandfathered in. For example, your 1968 rambler might have insulation that was fine by 1968 standards but is terribly under-insulated by today's codes. However, you won't be required to add insulation unless you're remodeling, and then only for the portion of the house you're improving.

But even grandfathering is evolving. In water-starved California, for example, owners of houses built before 1994 now are required to upgrade all their home's plumbing fixtures to water-conserving models as a condition of applying for a remodeling permit, regardless of what room is being remodeled.

Where are Codes Headed?

  • Higher standards for energy performance in new houses
  • Better performance standards for wind and storm resistance
  • More restrictions on the amount of volatile organic compounds (VOCs) being emitted from building materials
  • Energy crediting for alternative energy sources

It's a good bet that if you proactively upgrade your home to meet or exceed current standards in any of these areas, you'll be making a solid investment.


John Riha
John Riha

John Riha has written seven books on home improvement and hundreds of articles on home-related topics. He’s been a residential builder, the editorial director of the Black & Decker Home Improvement Library, and the executive editor of Better Homes and Gardens magazine.