The relationship between the Massachusetts' building code and construction cost escalation

Abstract

Over the last twenty years in Massachusetts, there has been significant focus on a shrinking labor supply and material cost escalation as they relate to rising construction costs. However, there are other factors attributing to increased construction costs that are often overlooked. In these twenty years, four editions of the Massachusetts building code have been released; Massachusetts is currently governed by the 9 th edition. Since the 6 th edition was released in 1997, the code has expanded to include increased seismic requirements, improved fire prevention, and the energy stretch code. However, code changes are rarely included in the industry discussion when trying to explain rising costs. According to The Greater Boston Housing Report Card from 2015, "... the cost of developing urban projects in the Commonwealth increased by nearly 40 percent more than overall inflation" (Bluestone) since 2011. This suggests there is more at play than simply a high volume of work; and while there is no disputing the cyclic nature of the real estate market and the sheer economics of supply and demand, this conversation needs to be expanded to include regulatory influence - specifically building code. The building code in Massachusetts is reviewed and amended by a qualified, volunteer board of industry professionals called the Board of Building Regulations and Standards ("BBRS"). There is a public review process for code changes and avenues for the average person to request a variance or submit suggested amendments. However, this service is severely underutilized by the commercial industry. The intent of this paper is to analyze the relationship between the development and regulatory industries through the primary filter of cost management. Through this lens, I will look at the role of code ambiguity, the layers of regulatory enforcement, and the distribution of liability and the impact on construction cost. Based on interviews with industry professionals, I have identified the primary inefficiencies in the interactions between the two industries and developed three viable solutions to address some of the criticism. These solutions address the misalignment of interests between parties, the subjective assignment of liability, and the opaque, intimidating processes surrounding code variances and appeals.