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Balancing Energy Efficiency and Affordability: The Impact of Updated Building Codes on Construction Costs and Housing Prices

As the global focus on climate change and sustainability continues to grow, many jurisdictions are updating their building codes to include more stringent energy efficiency requirements. While these updates are essential for reducing energy consumption and greenhouse gas emissions, they can also increase construction costs, ultimately impacting housing affordability. British Columbia Building Code is also undergoing changes, and the new requirements can affect the overall hard costs of construction, resulting in higher prices for consumers.


Increased insulation requirements

British Columbia has adopted a regiment to help the local government gradually enforce higher energy requirements in new buildings. The new BC Building Code ensures that most new constructions must be 20% more efficient. Higher insulation standards for walls, roofs, and floors can improve thermal performance and reduce building heat loss. However, this often necessitates using more expensive insulation materials and increases labor costs for installation. As a result, the overall hard costs of a construction project can increase, which may be reflected in the end sale price of housing units.


Enhanced window performance

The updated building codes may require higher-performance windows with lower U-values and solar heat gain coefficients (SHGC). These windows can reduce heat transfer and improve energy efficiency, but they are generally more expensive than their less efficient counterparts. The increased costs for these windows can contribute to higher construction costs and end sale prices.


Air tightness and ventilation

Stricter air leakage standards and the requirement for mechanical ventilation systems to maintain indoor air quality while reducing energy consumption may be implemented. Implementing these measures can increase the overall hard costs of construction projects, as they often require additional materials and labor to ensure proper air sealing and ventilation system installation.


Energy-efficient lighting

Building codes, such as LED or CFL fixtures, may require a certain percentage of installed lighting to be energy-efficient. While these types of lighting can result in long-term energy savings, their initial installation costs are often higher than traditional incandescent or halogen fixtures. This increase in upfront costs can affect the overall construction budget and end sale prices.


High-efficiency HVAC systems

Requirements for higher efficiency heating, ventilation, and air conditioning systems can help to reduce energy consumption and greenhouse gas emissions. However, these systems often come with higher price tags, and their installation may require additional modifications to the building’s design or layout. This can contribute to increased construction costs and, ultimately, higher housing prices.


Renewable energy

Updated codes might encourage or require using renewable energy sources, such as solar panels or geothermal heat pumps. While these technologies can provide long-term energy savings and environmental benefits, their installation costs can be significant, adding to the overall hard costs of construction projects.


While adopting updated building codes is necessary for improving energy efficiency and addressing climate change, balancing these goals with the need for affordable housing is essential. In cases where construction costs are already elevated due to complex design, unforgiving terrain, slopped grade or higher finishing/trade costs, the trade-off between managing economical viability, affordability for end-users, and environmental concerns will be a difficult one for the developer, particularly in an inflationary environment with rising interest and construction costs in the forecast.