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Local codes and regulations often act as impediments to smart growth, urban revitalization, and livable communities. Developers who would protect the environment or restore a historic building are often stymied by inflexible regulations. Suppose you were interested in opening a bookstore, an antique shop, or other small business in a vacant downtown building. The typical building code would require you to bring all three floors of the building up to current code, even if you only intended to occupy the first floor of the building. The added expense of rehabilitating three floors instead of just one would discourage most investors.

Thankfully, this “by the book” approach to development is slowly changing. Several states, including Indiana, New Jersey, and Maryland have adopted legislation designed to encourage the rehabilitation and reuse of existing buildings. While these laws differ in their specifics, they all share a recognition that while older buildings need to meet standards for safety and accessibility (just as new buildings do), they can be evaluated and regulated differently. …

The New Jersey Rehabilitation Subcode has reduced building rehabilitation costs by as much as 50 percent — generating a dramatic rise in historic preservation and downtown revitalization projects. In 1998, the first year of the new Subcode, historic rehabilitation projects totaled $510 million, a 40 percent increase over the previous year. In 1999, rehabilitation totaled almost $600 million, a 60 percent increase from 1997.

According to New Jersey newspaper editor Ben Forest, “Until the new rules went into effect, the costs, construction constraints, and unpredictable application of building standards were huge obstacles to upgrading old buildings.” For builders and investors, the rehabilitation of an historic building was often fraught with delays and financial risk. In New Jersey, state law required the entire building to be brought up to new building standards if the cost of the renovation exceeded 50 percent of the structure’s value.

The new Subcode has abolished this 50 percent rule and introduced other changes that make the code more flexible and user friendly. Now older buildings being fixed up are not automatically required to meet all modern standards. For example, a property owner would no longer be required to remove all the transoms (small, hinged windows found above doors in many older buildings) if there were a sprinkler system. …

New Jersey’s approach has received national attention. In 1999, Maryland — already known for its pioneering efforts to curb sprawl and protect open space — used the New Jersey Subcode as a model for its own “Smart Codes” legislation. Maryland Governor Parris Glendening, speaking at a Smart Codes conference noted that, “Smart growth can not work if people can not build, if people can not reuse, if people can not redevelop. Yes, our buildings must be safe, accessible, and fit the historic character of their surroundings, but some requirements are counterproductive.” …

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Ed McMahon is one of the country’s most incisive analysts of planning and land use issues and trends. He holds the Charles Fraser Chair on Sustainable Development and is a Senior Resident Fellow at the Urban Land Institute in Washington, DC. McMahon is a frequent speaker at conferences on planning and land development.

Over the past 21 years, we’ve been pleased to have published more than two dozen articles by McMahon in the Planning Commissioners Journal, and now on PlannersWeb.com.

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