Encouraging Residential Rehabilitation with Building Codes: New Jersey's Experience

Abstract

Building codes designed to protect public safety from substandard construction may stifle efforts to revitalize urban areas by increasing the cost of renovating and reusing existing buildings. To remedy this problem, several states have adopted “smart building codes” to spur the renovation of older buildings. This article examines the impact of the first of these, New Jersey's rehabilitation subcode, on residential rehabilitation activity. Comparing residential rehabilitation activity in a sample of New Jersey jurisdictions with that in a sample of jurisdictions in nearby states without smart codes reveals that the subcode has increased the number of housing units rehabilitated, but not the aggregate value of rehabilitation activity. Localities enhance the positive effects of the New Jersey rehabilitation subcode when they allow building inspectors to use their discretion to remove additional barriers to rehabilitation that are difficult to foresee in a uniform state code.