Turning Houses into Tax Cuts

Turning Houses into Tax Cuts

Believe it or not, an easy way to give Mainers an average of $800 more in their pocket per year is to enforce current building and energy codes. Modern energy codes turn houses into tax cuts.

The Situation in Maine

Maine law requires municipalities with 4,000 or more residents to enforce the Maine Uniform Building and Energy Code, known as MUBEC. The current MUBEC is the 2009 International Code Council (ICC) family of building codes, including the 2009 International Energy Conservation Code (IECC). Since most of Maine lies outside these municipalities of 4000 or more people, most of Maine has no building or energy code. Maine’s 2009-based code is also two code revision cycles out of date. There was an update in 2012, and another in 2015. Each update increased energy efficiency requirements over the previous version.

Energy inefficient homes cost more to own. Most of the money Mainers spend on energy pays for energy generation from out of state. Mainers would have more money in their pockets if they all lived in energy efficient homes. Spending less on energy will raise the living standard of all Mainers, but especially those in low income brackets. The overall benefit to the economy will be significant and meaningful. Enforcing building codes in Maine will turn houses into tax cuts.

The Arguments Against

I often hear two arguments against building codes in Maine. The first is that building codes make buildings expensive. The second is that enforcement costs will be an unnecessary burden on Maine municipalities. These arguments are false.

Do building codes make buildings more expensive? Yes, the first cost goes up. Compared to a poorly insulated, structurally suspect  building that will fall apart in short order, a building built to minimum standards to protect the health, safety and welfare of the public (the definition of building code intent) will cost more.  However, analyses of the annual cost of mortgages and fuel bills find the savings in fuel costs far outweigh the increase in mortgage payments from better construction.

The Reality

In fact, an analysis of the difference in energy use between a 2009 IECC-compliant residence and a 2012 IECC-compliant residence showed payback was available after the first year of mortgage. On average, a Maine homeowner would have a net cash savings of $800 per year (US Department of Energy, “Maine Energy and Cost Savings for New Single- and Multifamily Homes: 2012 IECC as Compared to the 2009 IECC”)

Will every Mainer realize these benefits? No. There is a set of designers and builders in Maine who are already making buildings that exceed even the 2015 IECC energy standard. Passive House folks are well beyond code-minimum. The people who will be most affected are lower income people, who are buying houses at the lower end of the quality scale. Saving $800 per year may equal five percent of their take-home pay. Enforcing building codes is the financial equivalent of tax relief.

What about Enforcement?

Will enforcement costs sink municipal budgets? No. It is a falsehood to say municipalities must enforce building codes using taxpayer money. In many states with building and energy codes, enforcement is paid by permit costs. In other words, enforcing a building code is a revenue neutral service. What about small municipality’s limited capacity to run building departments? It is true Maine’s many towns with populations under 4,000 would be hard pressed to create and administer their own building departments. However, Maine counties would have a much easier time running building departments. A county-level building department that operated as a revenue-neutral service would be a nearly perfect vehicle for Maine.

 

Follow Mike Sealander, Maine Licensed Architect:

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Principal at Sealander Architects, Ellsworth Maine. Revit guru. Married with 3 children. Avid gardener. Lived in San Francisco for nine years. Master in Architecture from Columbia University Bachelor of arts in religious studies, Wesleyan University. Graduated Staples High School, Westport CT. Hope to spend some time in Hokkaido before all is said and done.