By Darlene Bremer
Developers have learned a few tricks to meet varying building codes when operating in multiple jurisdictions
Imagine if every time you drove over a state or county line you had to remember a whole new set of traffic laws—which side of the road to drive on, the color of traffic lights, etc. Even if the rules were similar, knowing and adhering to the variations would be at the very least a time-consuming task. But that is often the situation real estate companies that operate in multiple jurisdictions face when it comes to adhering to building and safety codes.
The problem with code compliance is that standards vary from state to state, and from county to county. Most codes are derived from one of three sources: the Building Officials and Code Administrators (BOCA), the Southern Building Code Congress International (SBCCI) or the International Conference of Building Officials (ICBO). It is up to each jurisdiction to choose which of the three building codes to adopt and to decide whether to adhere to the entire code or make additions or subtractions. There is, of course, an evaluation process the jurisdiction has to perform, since those codes are only similar, but not identical.
Over the years, the standards developed by BOCA have been used mostly in the Northeast and Midwest. The codes published by SBCCI have been generally accepted in the South. And jurisdictions west of the Mississippi have mainly adhered to the standards and codes developed by ICBO. "It is rare to see a jurisdiction change which code the construction industry must adhere to in the region," observes Brooke Stauffer, director of codes and standards for the National Electrical Contractors Association.
Operating in one region with a similar set of standards is one thing, but for a company in multiple regions the code issue can be more daunting. For example, residential REIT AvalonBay Communities, Inc. is currently constructing new communities in 11 different states, in addition to roughly 140 existing communities spread throughout 14 states. "We are currently involved with a countless number of jurisdictions," says Rick Morris, AvalonBay's vice president of construction.
Need Directions? Ask a Local
AvalonBay begins the process of code compliance by researching and understanding the codes that are in place in a jurisdiction before construction begins. "We hire mostly local and regional code consultants that have a history of knowledge and a staff that is certified by various code bodies," Morris says.
Complying with codes in smaller jurisdictions presents AvalonBay with its own set of challenges. "Some smaller areas don't have the staffs or budgets to keep current in code changes," Morris explains. Another challenge in complying with codes in multiple jurisdictions is understanding how the local building officials interpret the various standards because personal experiences can skew an individual's subjective understanding of the code.
To help overcome these challenges, the company places the responsibility of code compliance on regional offices. "Compliance is assured by regional employees, along with the code, architect and engineering consultants we hire locally," Morris says. It is at the national office, however, where the staff works with national code organizations on current issues and concerns.
Many REITs utilize a similar strategy to be sure they are in code compliance at all levels. Even though the jurisdictions in which Duke Realty Corporation operates generally comply with the BOCA and SBCCI codes in new construction, the company still has to contend with anywhere from three to 12 local county or municipal jurisdictions in each of the 13 cities in 10 states it operates.
"We have offices in all 13 cities in which the company operates, and a construction office in 12 of those cities that are staffed with people who manage the design professionals and the construction process," says Steve Kennedy, Duke Realty's senior vice president of construction. Those local offices report to the regional offices of construction, but it is at the local level where the nuts and bolts of compliance occur.
Kennedy views code compliance as a difficult, but certainly not insurmountable, task. "In every municipality in which we are building properties, we hire properly licensed design consultants and rely on them to design the facilities in accordance with local building codes," he says.
Coordination Key to Compliance
However, code compliance is not a hard and fast science. As mentioned before, there are many interpretations of the same code, often within the same jurisdiction. And many code provisions allow builders to minimize one requirement as long as other code requirements are maximized in compensation. In addition, many local jurisdictions have different permitting processes, and Kennedy says those requirements can be even more taxing than code compliance.
Even after hiring trusted local professionals, those varying interpretations can still cause problems. "After submitting construction plans, we will occasionally receive notes from the jurisdiction's building officials to make certain changes," says Joseph Denis, vice president of construction for Kimco Realty Corporation.
Kimco is one of the largest owners and operators of neighborhood and community shopping centers with interests in more than 500 properties throughout 42 states. Denis estimates that the company operates in a minimum of 300 separate jurisdictions with a minimum of 300 construction projects underway during any given year.
Even though local architects are hired to draw up construction plans, coordination of the consulting companies used is performed on a more regional level. "Although it is the consultants' responsibility to ensure compliance, there are checks and balances in place," Denis says. The jurisdiction has a review process of the submitted construction plans that it performs before issuing project approval or permits, and a final check that the project complies with all applicable codes occurs during the final inspection.
AMB Property Corporation, which operates in approximately 100 jurisdictions in more than 20 markets throughout 16 states, solves the problem of complying with various codes and standards in multiple jurisdictions by building properties with local partners. But even in this situation it boils down to coordinating the various relationships.
"By using the knowledge of local companies, we make code compliance relatively easy for AMB," says Luis Belmonte, director of development. The company carefully chooses its project partners through first conducting market research and then cultivating relationships with the top developers in the area. "We currently have ongoing relationships with 15 developers around the country that we work with consistently."
It is the developer/partner that is responsible for ensuring that all code requirements are met, but local AMB market officers who are assigned to each market must also work to ensure code compliance. The process for all the projects that are underway is ultimately overseen, however, by Belmonte.
Needed Resources
In keeping up-to-date with changing building codes and standards, a real estate company that is a member of various code organizations will be able to participate in code development at the grass roots level. "It is the use of consultants at the local level, however, that allows us to keep current on code amendments made by jurisdictions," Morris says.
To ensure success in code compliance, it is necessary to invest in a trained construction staff and in the appropriate design consultants, including architects, engineers and code experts, according to Kennedy. "Architectural and engineering costs can run 4 percent to 8 percent of a project, and that's strictly for code compliance," he says.
A company needs the financial resources to hire the most qualified consultants to perform the work, agrees Denis. Finding the right firms is a constantly evolving process. Repeated problems with code compliance demonstrates that the firm hired is not performing at the highest level of quality and the search for a replacement must begin immediately, he says.
Staying on Schedule
Do changes in codes and standards seriously affect construction schedules? Not really, claims AvalonBay's Morris. "Most roadblocks caused by changing codes occur in the design phase, long before construction begins," he says. If the company performs due diligence up front and learns just how the jurisdiction wants the project to proceed and ensures everyone involved has an understanding of local codes, there should be no major roadblocks concerning code compliance, Morris says.
Avalon on the Alameda (San Jose, CA), is
a 305-unit apartment
home community
with 16,000 square feet of ground floor retail space in one of AvalonBay's "countless jurisdictions." |
Duke Realty's Kennedy agrees that code compliance does not impact construction schedules. Instead, he says it is the zoning, project approval and permit processes that have the greatest impact. Generally, local jurisdictions approve projects based on drawings and specifications and, in most cases, inspectors ultimately ensure the building is constructed in accordance with those drawings. "The design consultant is the one that is obligated to ensure that the submitted drawings comply with all the applicable codes," Kennedy says.
Kimco's Denis agrees that code compliance does not generally affect construction schedules and that there are usually no huge surprises. "The only real effect on the schedule is the time it takes for the permit process," he says. Having a firm project schedule in place can actually speed up the process by allowing the company to find out early what a jurisdiction's requirements are and adjust to them accordingly.
However, if those adjustments are not made then the project can be delayed, according to Belmonte. "If the developer has made mistakes and does not adhere to codes or comply with local standards in the original drawings, then the whole construction process, from project approval to completion, can be delayed," he says.
Going National?
At the present time, there are no true "national" codes. Codes and standards promulgated by BOCA, ICBO, SBCCI or the National Fire Protection Association (NFPA) are not mandatory. They become regulatory only after being adopted by reference by a jurisdiction. There is movement in this area, however. In 1994, BOCA, ICBO and the SBCCI joined in a coalition named the International Code Council (ICC) and produced a single family of model building codes that could be used anywhere in the country, and possibly even overseas.
The set of International Codes was largely completed in 1999. "A well-developed national code would decrease learning curves in new jurisdictions, and help a company achieve consistency of design requirements and of code interpretation," Morris says.
In terms of ease of compliance, Kennedy also believes that national building codes would be beneficial. "However, there will still be variations by geographic areas, such as earthquake design for California projects, snow loading requirements in northern states, and flooding considerations in places such as Florida," he says.
"When agencies adopt BOCA codes, for example, it is easier on the company to comply because most architects are already familiar with these codes' nuances," says Denis. Codes promulgated by the NFPA, such as the National Electric Code (NEC), are also used by most agencies and are well accepted throughout the country.
National codes, according to Belmonte, are not the issue and he believes that any national building codes promulgated by the ICC would neither benefit nor harm new construction projects. "It is the local codes and standards that change the most frequently and that pose the greatest challenges," he says.
Darlene Bremer, a frequent contributor to Real Estate Portfolio, is a freelance writer based in Solomons, MD.
Cracking the Code
