Understanding Elevator Costs and Developer Strategies

There’s so many acronyms in this episode, it might make your head spin. We talk about IRC, IBC, IEBC, ADA, FHA and more. John Anderson and I don’t do this to punish you, or make you feel confused. But, it’s critical to understanding the world of how buildings actually get built.

John is usually good for at least a couple of one-liners, and this one is my favorite in this episode:

Real estate development is a black box full of money and villains.

You’ll learn in this episode why requiring sprinklers in small and middle-scale building isn’t necessary, and how it makes housing less affordable. We talk about single-stair reform, and understanding how the Fair Housing Act is a very different animal than the Americans with Disabilities Act.

For more from John, check out his blog.

Find more content on The Messy City on Kevin’s Substack page.

Music notes: all songs by low standards, ca. 2010. Videos here. If you’d like a CD for low standards, message me and you can have one for only $5.

Intro: “Why Be Friends”

Outro: “Fairweather Friend”

Transcript of Episode:

Kevin K (00:01.81)

Welcome back to the Messy City podcast. This is Kevin Klinkenberg. You know, we spent a lot of time in the world of whatever you want to call it, urbanism, planning, design, urban design, talking about zoning reform, especially for what we kind of call missing middle housing and the need to reform zoning codes to enable the production of sort of smaller scale.

housing. And so I've had a number of episodes on that. We've talked about it. We'll continue to talk about it. But one thing we really haven't talked much about at all, and that's often overlooked, is the need for reform to building codes and building code and development approval processes generally with local governments. So my friend John Anderson started an email thread the other day.

that, kind of dug into this issue and like a lot of John's emails, it was long and thorough and a little bit grumpy. and so I thought John and I should just, talk about it, because there's a lot of really great stuff here that I'm not sure that people think about, terribly much, especially if you're one of those people who wants to do small scale, development.

whether new construction or rehab, especially for new construction, there's just a lot of other things to think about that you're going to have to consider and other things potentially to work on with your local government to try to reform. So that's a very long introduction to say, welcome John, how you doing?

R. John Anderson (01:44.944)

Good, I'm good. I'm glad that emails are really thin medium, so it's hard to get grumpiness to come across at the right amplitude.

Kevin K (01:55.902)

always comes across, you know, it's okay. But I've known you long enough to be able to even decipher it when it's kind of a little more subtle.

R. John Anderson (02:06.724)

Well, I'll tell you one thing that's.

Kevin K (02:08.766)

And then there are times that you and Gary Brewer go at it and it's not subtle at all.

R. John Anderson (02:13.468)

hi. I, it feels like, having a conversation with someone in Quebec where I just don't, our experience is so different. The world's way operator so far apart. It's it. I feel like we're too, you know, Neanderthal tribes meeting in the dark searching for a common word for fire without success. You know, so.

Kevin K (02:37.63)

Yeah.

No doubt. No doubt.

R. John Anderson (02:41.904)

No, Fog thinks small house 500 square feet. No, Og thinks small house 3000 square feet.

Kevin K (02:47.646)

Exactly. $2 million is a reasonable budget for any new house, Yeah.

R. John Anderson (02:52.046)

Right. And you ought to have it specially designed by an architect because that's the world that he's operating in.

Kevin K (02:58.812)

That's okay. We love, we love Gary too. He's a brilliant designer. but, he long operated in a different stratosphere in terms of architecture. So John, let's, let's get into this a little bit. I think there's, do you want to kind of lead off a little bit, just talking about building code reform generally before we get into some of the

R. John Anderson (03:01.818)

Yeah.

R. John Anderson (03:17.71)

Well, yeah, let's talk about why you'd want to reform the building code. We've seen a fair amount of uptake in zoning code reform where folks are, think, under the banner of making middle scale, missing middle housing legal again.

you see that find its way into comprehensive plans and then policy documents. And then from there, it goes through the gruesome process of actually changing the zoning. Often it takes two mentions in the comprehensive plan or three to get that to happen. It's in the implementation paragraph in the back. We should change the zoning to make this legal. And the, and you

To the credit of people that are trying to move a comprehensive plan forward, they really are trying to engage the big ideas and get enough consensus and buy -in to be able to pursue them. And then that can be a couple hundred thousand dollars down the road and you've exhausted all your staff and you have no budget left to actually change the zoning. So which is why it takes two or three cycles of the comp plan.

But when it finally comes around to it, then you get zoning that allows a duplex, an ADU, a fourplex. And then the fourplexes don't get built. And that's because when you move, in most places, when you move past two units, a duplex, into three units in a building, you move from the International Residential Code to the International Building Code or the Commercial Code. So.

And when that happens, you have fire sprinklers. And in order to have fire sprinklers, you need to make a connection at the water main. You have to protect the water main from stale water in your sprinkler system from washing back, backflow preventer. You need a sprinkler riser and a pressure reducing valve and a flow alarm. And like this red trombone that lives in a little closet that gets inspected by the building is the fire inspector before.

R. John Anderson (05:29.36)

you run horizontally your pipes. And because you're tapping the water menu, that's a serious piece of plumbing work, but it also typically requires a tap fee. in Seattle, that was $16 ,000. And in Chattanooga, it was $18 ,000 if you wanted to build a fourplex.

Kevin K (05:54.204)

That's just the fee. That's just to check you right to the municipality. Right.

R. John Anderson (05:56.664)

Yeah, there's no tap. There's no water coming your way. There's just the promise of water now that you've paid the fee for the privilege. And it's at the discretion, typically, the fire official for an entirely residential building. If you're going to build a residential sprinkler system, the geek term for that is NFPA 13R, National Fire Protection Association, 13R. That means you can use PECs or PVC plastic pipe once

once you're inside the building and you've got it all set up. But for a 13 -hour system, for a residential system, it's the fire official has some discretion about whether or not they want a separate dedicated service, or you should be able to use the domestic service with a backflow preventer or check valve to keep the stagnant water and the fire sprinklers from contaminating your domestic water. But typically fire officials are

are creatures of habit and that habit is usually enforcing the strictest standard possible and not, they're not given to, making concessions. would make a builder's life easier. So it's good. It's got, you're deviating from the system, you

Kevin K (07:08.68)

Plus you're, yeah, and you are practicing the dark arts of real estate development, so you probably are serving to endanger the lives of whoever you're building for,

R. John Anderson (07:21.434)

Well, that's actually how we make our money. It's by endangering other people. The more of our customers we can put at risk, the better for us. And I think, know, in their defense, our culture says that real estate development and construction is a black box full of money and villains, and it's unknowable how much money is going to be made. So why would you complain about saving children from a fire?

Kevin K (07:30.558)

It's

R. John Anderson (07:49.552)

because there's just a huge amount of money you're going to make. it's a technical problem wrapped in myth and caricature.

Kevin K (07:59.518)

So if I just take a step back and think big picture again here, so especially maybe for a lay person, you know, a lot of people, I remember this, a lot of people refer to these codes as like fire codes. That's kind of like the vernacular for people who are not architects or in the professions, but they're actually technically called building codes. When I was a young architect, there were multiple different building codes. There was a uniform building code and there was a Southern building code.

BOKA code, and then they eventually all coalesced into what we call the International Building Code. And that is the standard now that most cities, local governments, and states adopt. There are different cycles and years at which you might adopt a But as you mentioned, there's also this companion piece called the International Residential Code, which for the most part governs just one family and two family

buildings.

R. John Anderson (09:00.428)

or attached one family, like a townhouse with a fire separation wall between them, no common hallways or anything. The entity that issues those codes is called the International Codes Council, it's a private nonprofit. And if you're a fire official or a local building official, this is probably your trade group. Also, if you manufacture

Kevin K (09:07.474)

Right.

R. John Anderson (09:29.872)

fire sprinklers, you're probably pretty active there. Because what happens is there's a code cycle where, okay, we have a new edition of the International Residential Code coming out for 2028 or 24 or whatever. so in between the last time the model, what they call model codes were issued and now folks have made proposals. This last round for the 2024

contains a lot of really good improvements on the codes for building decks, which were kind of a neglected area and there were a lot of deck failures and some smart folks got together and came up with some common sense solutions. So, and if you use those solutions, you don't actually have to have an engineer verify your deck construction. So the issue of the model code and then state by state, state legislatures

they'll review it in committee. It'll come to a vote. They'll adopt the such and such year, the 2024 international residential code, international existing building code, international FAR code, international, you know, all of those codes, kind of all at once. And then depending on your state, you can, when the state adopts it, then it goes over to a codes commission

does rulemaking where they might make some adjustments that are appropriate to that state, local climate and economics. And then it becomes law. And then the process for it to happen at the local level, your county, municipality, town, some places it immediately becomes the one you're supposed to work with. Others you have a window to

adopted in and if you don't do anything to amend it, it's the one you're going to work with. And other places, the only way you, so you could adopt it and make it less stringent in places like California or New York, and I believe Illinois, but in states that are what are called Dillon's rule state versus home rule states, Dillon's rule state, you can only adopt it to make it more

R. John Anderson (11:55.726)

So in Tennessee, recently basically legalized fourplexes without fire sprinklers. And they did that at the state level after attempting to do it just for Shelby County and Memphis. They had to go back and try again. most of the code reform issues that are going on in most states have to be engaged at the state legislature.

level. And a lot of states will eliminate the requirement for fire sprinklers in all new residential units.

Kevin K (12:36.178)

And so we should probably talk about like what's the whole big deal? Why wouldn't you want to have sprinklers required in buildings? And I want to give you a little background from my standpoint, but you go ahead and answer that first. What's the problem here?

R. John Anderson (12:55.662)

Well, I think the problem is one, first of cost, and then second of benefit. A two -story fourplex is actually safer than a single -family house of the same size because there are rated assemblies separating one unit from the rest. You have exiting that meets the requirements.

all those places that are sleeping rooms have to have an egress window. So in addition to going out through the hallway, you could go out through the window or a firefighter could come in from the window and they're sized. So firefighter with a Scott pack can go through the window. the, and there isn't much in the way of actual evidence that fire sprinklers save lives or save structures. They're mostly there even in commercial buildings to increase the amount of exiting

people have to get out of the building. They don't put out fires. They control smoke to a point. So, and it, you know, it makes sense if you're in a big quarter building or a hotel or, you know, a high rise, that getting out of the building in the case of a fire is a big serious issue. There's a big difference in scale between a high rise and a fourplex. So, and also the cost of, again, getting the system just to the building is significant.

actually costs more than running the pipe inside the building. So that additional cost, say you're trying to build market rate apartments adjacent to a daycare and a place for food and drink. And you get actually a little bit higher rents because you have those community amenities. But if the rents are not high enough to support a more expensive kind of construction, then

you probably build townhouses or something else. So the notion of the missing middle, there is a whole strata of easily built wood frame buildings that could be built, but for this fire sprinkler requirement that makes the cost too high to be able to recover either with a sales price or with rent. So basically, you can't get the rent, you probably shouldn't build the building. And it's

R. John Anderson (15:19.536)

I mean $18 ,000 before you install the system. you're going to, that's the same system you would use for 16 units. Just 16 units would have more pipe. But the core system being kind of, that cost being spread over just three or four units, it kills it off. And it's typically six units or more become kind of the threshold.

Kevin K (15:44.958)

Well, and there's also an ongoing maintenance cost. mean, you can't just like put in a backflow preventer in a fire sprinkler system and just like let it sit for 50 years and never touch it.

R. John Anderson (15:53.284)

Yep. Yep. Well, and also the, you'll often hear fire officials talk about, you're going to, you know, okay, so it costs a little bit more on the front end, but people are going to save money on their homeowner's insurance, you know, or, or the building owner will save money on their insurance. And that's just not true because there's more property damage from leaking fire sprinklers than there are from fires. And the folks that issue insurance are smart enough to, you know, look at the actuarial tables and say, Nope, no break for fire sprinklers. So.

Kevin K (16:22.59)

And I think you can – even if you don't know a of this stuff, you might intuitively kind of know it because if you look around and see what is actually built in terms of new construction and that's why I think one reason when you look around you see an awful lot of – not just single family. I mean there's obviously a big single family market but when you go to duplexes or a townhouse rows where you might have four, six townhouses in a row or something like

You're doing all of that with the international residential code and you're avoiding all of the complexities of the international building code or the requirements that come with having multiple units.

R. John Anderson (17:04.996)

Yeah. Also, if you were to do, there's a, there's a paragraph in the international residential code that says, okay, so you could have a duplex and up and down duplex, no fire sprinklers attached to that. know, so you had a ground floor, you know, one bedroom and upstairs, had a two or three bedroom, you know, three story building like you'd see in Savannah. you can't do that without fire sprinklers. Now, once you put two units in a, in a building and attach

with the firewall and everything, now you gotta do fire sprinklers. So, and that's a really, really practical, flexible building type that we can't do because every one of those individual buildings now needs a fire sprinkler system. And there's just, now you're looking at spreading the cost of that red trombone over two units, so.

Kevin K (17:56.882)

Yeah, it's interesting to me because I think about before the codes unified, there were very different philosophies between like the UBC and the BOCA code. broadly speaking, like one of them was, have very, it was more about building materials and assemblies. And then

what became the international code was really just basically about sprinklers. They say we're gonna be a lot more lenient on exiting and materials and other stuff as long as you put in sprinklers. And that's the one that won

R. John Anderson (18:35.93)

Yeah, there are other ways to build without sprinklers, but typically the amount of brain damage required is tough. And a lot of times when you take those alternative routes, the building official or file official will say, no, no, why don't you just sprinkle it? And the evolution of codes over time, it wasn't until the, I think the mid sixties.

It's been a long time since I had to take my journeyman's test as an electrician, but I think it was the mid 1960s. Before that time, you weren't required to ground outlets. So an old house with no ground, your answering machine, computer, television, anything is kind of at risk because there's no ground. So now grounding outlets became the thing. In about 1975, hardwired smoke detectors became required.

And that actually saved a lot of lives. So that was a really effective change in the building code. And when it all got consolidated, the kind of code caulking that was used to bring it all together was, well, yeah, we have all these differences, but I think we can agree that if you sprinkle it, it's no problem. We got it covered. So the end over time.

you see that's also the place where you would go to argue about whether how wide a street needs to be because that's incorporated into the fire code. And in recent additions, it went from being 20 foot clear to 26 foot clear, depending on which appendix you adopt. And this is the kind of thing where if some restrictions are a good idea in the name of safety, then more might be better. And I think that a lot of this comes

We have really specialized rules that are not integrated into making places worth caring about. They are specialized and the builder, the developer, the architect, or the people that are responsible to combine these ingredients in a capable way. And then we have them reviewed by a bunch of specialists who each have their own particular set of goals when they do the review.

R. John Anderson (20:57.956)

And if you've ever worked on a big serious building that had elevators and you had a local electrical inspector and a state elevator inspector, both operating under perfectly good codes, you could be hung up for six months while they fight. And you've built it the way you thought was, the way the architect got it signed off. But in the final turf competition, you could

really jammed up because now you have specialists that are in conflict. And both of them feel like they have the authority to win.

Kevin K (21:36.926)

But of course, one of the great ironies of all this is the sort of buildings that we're often trying to reproduce or emulate or do new again have been around for 100, 100 plus years. The truth is most of those were built with a very similar construction method as how we build today. A lot of them were like balloon framed with like a, maybe they have a brick veneer or something like that. But a lot of them aren't like Clay Chapman's structural masonry buildings. They're actually

wood -framed. have no, right, I mean they have no fire rated assemblies at all between the units or between the hallways. Single stair often in many cases, no sprinklers, none of those features at all. And I'm not to say there haven't been fires and tragedies in any of those buildings, but by and large, if you look around, there's enormous wealth of them that have existed for over a

R. John Anderson (22:09.124)

with really, really thick brick paint that goes on

R. John Anderson (22:36.922)

Yeah, and I think that the.

If the decision about how much risk are we willing to take on, say as a community, that decision is delegated to elected officials and elected officials have staff and they adopt these model codes and enforce them. And the, isn't a lot of defensible territory in the, wait a minute. The rules that you are playing by and you want me to play by are,

What's the technical term? Kind of b******t. And I would like to make a case for that. And people get very defensive because I think also people have a really good internal gyroscope for the slippery slope of having to rethink all their assumptions. And they'll put their heels in the ground and it doesn't take much to say no.

as opposed to, you you make some interesting points. I would really like to dig into the research on this. I appreciate you brought it to our attention. know, that more commonly is like, look, you make a pretty good case, but if we let you do it, we'd have to let everyone do it. And I know you're a very careful builder, but there are some schlocky guys out there that are gonna make terrible things happen. And we have to protect the public from them. So we're gonna throw you under the same bus we throw them under.

So, you know, so a lot of this comes down to how do people perceive and measure risk? How do they communicate about it? And are there benefits out the other side of it that are worth taking that effort? So right now, they're, last count, there are like nine different states that are, that have legislation pending about going to single stair for six stories in a sprinkled building.

R. John Anderson (24:36.56)

And what that does, if you Google single stair buildings in Seattle, you'll see that the ability to do just one stair allows you to work on a smaller footprint. So it creates a lot of really good infill on 50 by 100 lots or 100 by 100 lots instead of a full half block podium building. The requirement for two stairs and

a third of the diagonal distance of that rectangle separating the two stairs. So you got your room to make a choice which stair you're going to. That requirement creates a lot of, and then two rated stair stair assemblies. That creates a lot of corridor buildings to amortize all that common area and all those additional stairs. So they've been building single -story single stair buildings with sprinklers in Europe for a very long time. And it's kind of

it's the established standard for, you know, that portion of the Western world. And so about 12 years ago, there was an amendment made to the local building code in Seattle to allow for single stair buildings. And a lot of them have been built with good success and are perfectly safe. And now the legislature has, I believe, passed it and it's on to the codes commission for rulemaking.

The fourplexes don't need fire sprinklers rule didn't make it out of committee. But the but you can see, you know, looking around the country, there's at least nine states that are looking for single stair. And I think that we'll see a similar Montana, you can build a fourplex with no sprinklers in Vermont. You can build a fourplex with no sprinklers. But the.

These things end up often sponsored by the local home builders association. In North Carolina, home builders came in with that. It passed in the legislature. It also involves some reduction in the requirements for the energy code. So Republican supermajority got it passed. Democratic governor vetoed it. Supermajority overruled them. Now those are

R. John Anderson (26:59.482)

Those are supposed to be the rules except that it still has to go to the codes commission and the codes commission doesn't have enough members and members are appointed by the democratic governor. So it became a turf issue about if those guys are for it, I'm against it. Plus, you know, energy codes are for important purposes like climate change. So we can't give ground on that ideologically. So that's kind of the process. And I think that the kind of bottom

support for these things at a state legislature, you know, one at a time. I think that probably has a better chance than a top -down approach where you make code proposals to the ICC and need to survive the committee review process to be able to have those proposals incorporated in the next round of the

I've, I've resisted, I've resisted joining, but I figured out that membership costs this, you know, the same as buying all the hard copy code books, as the non -member. So.

Kevin K (27:55.038)

Have you

Kevin K (28:06.398)

There you go. Have you seen any discussion at all from the ICC about changing the one and two family to go up to three and four family?

R. John Anderson (28:17.808)

Not at the ICC in general. There's no proposals currently in the mix. But I think that

It's a, you know, I only have so much room for research and development and missionary work in my life. the, and my batting average on that is pretty dismal.

thought about trying to rally the troops and get multiple proposals in from all over the country. So absent a grant from Melinda and Bill Gates, I don't think I'm going to storm the battlements of a top -down solution.

Kevin K (29:09.886)

So it wasn't there, was it Memphis that did up to six units without sprinklers?

R. John Anderson (29:15.118)

Yeah. Yeah. And then it was killed off by the state fire marshal. And so the so the legislative fix to that was to say that the state fire marshal does not have jurisdiction in Shelby County or kind of was like in there, tagged on to some other bill. So the so now you can do six units, no forest reclures, but with

typically two hour separations between units, which is not a heavy cost because by the building code, the sound transmission requirements you have, if you just pick the right wall sandwich, you will exceed the two hour fire rating by the time you get to the sound transmission coefficient number of 59, which is

the minimum between units and multifamily.

Kevin K (30:14.43)

Isn't it mostly just like a double layer of Type X drywall on both sides?

R. John Anderson (30:18.352)

Yeah, typically double layer on resilient channel or double layer on double studs with air gap. So, you know, and it's 5 -8, two layers of 5 -8.

Kevin K (30:27.912)

Yeah, okay.

Kevin K (30:33.65)

Yeah, and the whole scheme of things that's cheaper than the sprinkler deal.

R. John Anderson (30:38.5)

Yeah, it's also the, just makes for a much quieter unit, you know, which is a benefit that your residents would see as a good thing.

Kevin K (30:46.034)

Yeah, no doubt.

Kevin K (30:53.586)

Right. Right. So we've talked a little bit about, you know, the sprinkler issues that relates to three, four, five, six plexes, that sort of thing. We've talked about the single stair exiting possibility. What else are you seeing that like small developers should be really aware of when it comes to, or like red flags when it comes to other code issues besides what you might see in the zoning

R. John Anderson (31:18.698)

the, one of the things that you'll, it's a confusing problem. all, facial tissues are not manufactured by Kimberly Clark called Kleenex, right? But if you said pass me a Kleenex, people know exactly what you're talking about. The brand name has become kind of the generic name. The same thing happens with accessibility requirements.

the Americans with Disabilities Act governs basically places of public accommodation, commercial offices, retail, movie theaters, universities, hospitals, state capitals. And the Fair Housing Act governs the accessibility requirements for residential.

and you need to have four units or more to have that building be covered by that set of standards. So if you were going to have four units in a fourplex, two up, two down, all of the ground floor units would be required to be accessible, adaptable. That doesn't mean they have to be accessible when you build them, but they have to be adapted to be accessible in a reasonable period of time if someone with a disability wants to rent

So what that turns into is doors with enough clearance, lever hardware, enough backing in the bathrooms to put in grab bars, enough space between appliances and counters, and be able to get into the building with a zero -slip entry. So we typically build porches, you know, two and a half feet over the surrounding grade. And the way that we handle

that adaptability issue is in a fourplex with a raised floor. The ramp you put in goes down the side of a narrow deep building and brings you up to the front porch elevation. So, and you don't have to do that until someone shows up and wants to rent that, you know, is in a wheelchair or whatever. So, but the people can, a lot of people conflate accessibility for residential with ADA.

R. John Anderson (33:44.634)

people talk about ADA requirements as if that's all of the accessibility requirements. So for small developers, it's important to understand if you did a mixed use building, the commercial on the ground floor is governed by the ADA, although there's some square footage exceptions for certain things. And then the units upstairs, if you decided to put all four units on top of the commercial space on the ground floor, as far as the Fair Housing Act is concerned,

the second floor is now the ground floor, because that's the first place that housing occurs. So now you either need a really big difference in grade or an elevator, which you're not going to amortize over four units. So the better play is to put one unit, however small or modest on the ground floor, because in a non -elevator building, all ground floor units need to be accessible, adaptable, all one of them in this case.

Kevin K (34:41.534)

John, what might an elevator cost in round numbers, just to by way of thinking about

R. John Anderson (34:47.504)

Well, there's like the base, the cab and the equipment round numbers, that's going to be 50 to 75 ,000. And then you're going to see typically about 25 ,000 a stop in the additional shaft way. And that's for hydraulic. Once you've ever stayed on the fifth floor of a Hampton Inn, that's a hydraulic elevator and you're able to

some maybe some bad life choices by the time you get to the fifth floor because they're very slow at that point. So four stories is kind of the effective maximum for a hydraulic and at which point now you go to a traction elevator which is significant but another 50 to 60 percent more expensive per floor. So again if you are in a situation where you're going to have to have an elevator for market reasons or

for accessibility reasons, you need a lot of units to be able to spread that cost. Because it's not only a first cost, there's the ongoing maintenance and your insurance is gonna go up. But also your construction cost is gonna go up because as soon as you introduce an elevator into the building, kind of all the trades sort of start to move their numbers up or drop out because, yeah.

Elevator inspector as an HVAC guy used to doing two story buildings. I don't think I need that guy in my life, you know, because I'm supposed to provide exhaust for the shaft and they're really picky about how you do that. And I just don't do enough elevator buildings to, and I'm busy anyway, you know, so there there's a point where, it's like there, there are buildings that are scaled right for a small developer. And then there's the next

Kevin K (36:22.034)

Yeah.

R. John Anderson (36:45.104)

which is a significant bump in the number of units, the cost, the overall scale and complexity of the project. there's, and the folks have a, often have a mistaken notion about that being same as, you know, that's the same as, as the four townhouses I built, just 40 units with an elevator and corridors and fire sprinklers. What's the worry? You know, you know, if I'm going to do four units in this town with all the brain damage I got to go through, I may as well do

You know, so now I get to raise more money. It costs more to build on a per square foot basis. My rents have to be higher. Everything sort of starts to snowball in complexity and scale. And what you should have done as a small developer is instead of, you know, swinging for the fences with that home run, that great project that now you don't have to work anymore. You should do a series of small projects and have a portfolio that is made up of things that.

You weren't just doubling down until you lost everything. And you see conventional developers doing the same thing. it's like, you know, if I'm going to, you know, in California, it's probably the best example. If I'm going to do 400 units, may as well do 4 ,000 because the environmental litigation will cost about the same. You know, and also if I can get the stuff approved now, because the barriers to entry are so high, I can definitely make money on 4 ,000 units.

400 is kind of sketchy, I don't know, it's a small deal.

Kevin K (38:17.534)

Yeah, I was just having this conversation with a couple of developers, friends the other day here and like in our city. Like there's just, there's no, there's a lot of great discussion and talk about reform to enable small scale stuff. But when you actually put pencil to paper and start to do a project, like the, the review machine has no mechanism to handle.

smaller scale stuff or at all. And so everything pushes for bigness. And it's frustrating because there are a lot of us who I think would like to do some smaller scale stuff. But know, John, this is one reason like you developed, you created the 4F building prototype was to really kind of help smaller developers understand like a hack around some of these different codes.

R. John Anderson (39:12.622)

Yeah, and that's around the same time that, at that time you could in Texas, Idaho, Nevada, and a few other places, you could build a fourplex without, fire sprinklers. and those were some of the very few places during the great recession that you could build anything. So, it seemed to make sense. What's happened since then is that the fire sprinklers will, you know, the form follows finance fourplex really at this point should be two duplexes on the same lot or.

a four unit cottage court or something. David Kim was really instrumental in hacking the code to come up with the three story single stair walk up. And that could be a mixed use building with one unit on the ground floor and then no more than four units on each of the second and third floor and had a maximum exiting number. So we kind

It's kind of like working an investment strategy around the tax code. You know, it's like that's that we're going to have to fit this box. And what we found was that you do wood frame construction. You could do a tall ground floor if you needed retail. And you could do either nine units, four on each of the second and third floor and one unit on the ground floor, the rest commercial, or you could do 12 units all the way down to the bottom, or you can add additional units on the ground floor as long as they

direct access for exiting on the outside wings or something on the back. So that type is getting a lot of traction. The same time Eric Brown and Union Studio had developed similar buildings using the same analysis of the code. So there's a number of those that have been built.

That one of the benefits when you're doing a small multi -family building with fire sprinklers and the like is that you, if you're only doing four units on a floor, the common area is basically the stairway at a very large landing. So you end up with maybe four, about six to 8 % of the building area is common area compared to the 15 to 18 % you see in corridor buildings.

R. John Anderson (41:36.752)

So got to pay to build it, you got to pay to clean it, maintain it, insure it, et cetera. And so being able to reduce the common area, being able to reduce the number of stairs, together buildings that would fit on a 50 or 100 foot lot opens up a lot of opportunities for three story buildings and for mixed use. But again, ADA for the commercial and Fair Housing Act for the rest.

Kevin K (42:04.712)

Right. So it's really kind of funny because I think I don't think I ever really learned about the Fair Housing Act until you and I started working together, which was, you know, easily almost a decade into my career as an architect. And then we started like looking at the Fair Housing Act. There actually are some interesting workarounds besides like the ground floor thing in the Fair Housing Act. So one or two that I want you to talk about the townhouse rules for fair housing.

But one I remember is I think it was adopted in what 1983 and it exempts all buildings built before that year if I remember right. 91, okay.

R. John Anderson (42:45.127)

1991, May, March of 1991, March 30th, 1991. So if you have an older built.

Kevin K (42:48.902)

Okay. It's almost like you'd memorize that or like tattooed it somewhere.

R. John Anderson (42:53.712)

You remember back in the early days of computers when offices didn't have IT people and whoever had figured out how to stay on hold for three hours with Dell computers to get a technical support answer?

Kevin K (43:13.534)

or was like me, was like the 18 or 19 year old who just grew up with computers, that was the IT person.

R. John Anderson (43:16.644)

Yep. Yep. And the fact that you could figure out how to download a print driver, you were now the go -to guy. And the more people came to you and asked for help with their print driver, the more problems you solve. the, you know, the fact that you never got a raise because you were the de facto IT guy. So these days for our own purposes, we have dug into this stuff. And then you start to look around and say, wait a minute, not everybody has done this homework. No, no, it's like

Kevin K (43:23.228)

Yeah. yeah.

R. John Anderson (43:46.126)

No, we're really busy and it's really hard and really complicated already. You know, we already have the building code and the fire code and everything else. Fair Housing Act. Jesus. So the, so I really, I have a hard time passing up on a chance to reduce my sense of imposter syndrome. It's like, I really am a legitimate guy, you know? No, no, I've read this. Let me send it to you, you

Did you read it? No, I didn't. just took a word for it. So no, you got to read it and tell other people about it. You know, it's like, so you, you, ended up coming across as some sort of, you know, uh, crazy person, you know, the kind of people who nailed their 19 thesis to the door of the church and Wittenberg kind of guy, you know, like, uh, that was not my intent, but it's sort of evolved that

Kevin K (44:40.072)

So anyway, one thing I remember, so a great workaround in the Fair Housing Act, I've had a lot of people over the years talk to me about, have like a old historic mixed use building and they don't want to, they're scared to renovate the upstairs for residential because of what they say ADA, just like to your point, it's not ADA, it's actually fair housing. And my point was no, you're exempt.

R. John Anderson (45:06.212)

You're exempt. One of the problems, those buildings are covered by the international existing building code, which gives fire officials and building officials a lot of latitude about how you get to the intent of the code, how much effort is going to be required given the level of renovation you're doing. And that same sort of metric is applied

accessibility upgrades for places covered with the ADA, know, more than 20, you know, can you devote 25 % of your budget to accessibility? Well, $25 ,000 in bathroom upgrades doesn't go very far. It's pretty easy to do. But when it comes time, when, when, uh, the current building code says, if you have residential occupancy over mercantile or business or, know, anything else, that's a big.

hazard and now you need to have fire sprinklers because it's under the international building code. International residential existing building code says look if you can put another layer of drywall on the ceiling and create a two -hour rating around the stairway you're good you know. Also you need to use a firecock anytime conduits go through a through a rated floor or

A lot of building officials are not ready to, you know, to learn about how much discretion they have or why they should use it in order to be able to get those second story apartments back online on Main Street. So the so even though it's in the code that they have adopted that this could happen, they're not trained at it. They don't get any practice at it. It basically, you know, goes through kind of the code egg sorter. Let's you know, you're spending this much money. You're now you need to bring it all up to code.

So in those settings,

R. John Anderson (47:06.434)

Eric Cromberg is probably the best person to talk to about what the international existing code will allow you to do if you can explain it to the people enforcing it. And I think it's important to do that before you submit your plans with your code analysis and your stamp and wet signature next to the code analysis that says, I really do know what I'm talking about. Please look up these sections.

You need to, you you need to talk with your building officials about the intent of the code and the like. And have you seen this section of the, know, you have to cultivate those relationships so that people trust you rather than they feel like they have to defend their turf. So, but the, the, the townhouse exemption and fair housing act is two story units are exempt from being covered by fair housing act, which.

accounts for some of the enthusiasm for building rental townhouses.

Kevin K (48:07.868)

Yeah, yeah. And can you stack them then?

R. John Anderson (48:12.75)

No. No, if you stack a townhouse now, that's two units between, even though they have a firewall, once you put two units into a townhouse, now you're into fire sprinklers.

Kevin K (48:24.86)

Okay, yeah. Yeah, that makes sense. All right, so yeah, so just again to clarify a little bit in case we're making people's heads spin a little bit. I think it might be, but like when you talked about the international existing building codes is yet another code that's part of the model code family and it has to be adopted. I don't think like my city has adopted it. I think there are a lot of local governments

R. John Anderson (48:36.624)

I think the odds in that are pretty high.

R. John Anderson (48:53.392)

I would, if you look, it's in there in the alphabet soup of adopted codes. Most, most folks.

Kevin K (48:56.188)

Yeah. Okay. But it was, it was created, okay. It was created for the express purpose of making renovation of more historic buildings easier.

R. John Anderson (49:07.588)

Yeah. And the, all of the, the, the best parts of the international existing building code are all the paragraphs about intent, you know, and if you're sitting down with a code official about that, said, okay, so this says the intent is this, can we agree that that's, you know, that's a good intent? And if we can get, if we can satisfy that, you know, this project, can we get to yes, you know, the,

But folks in those kind of positions don't want to be called out for being wrong or dogmatic or they wouldn't want to be characterized as Pharisees, which is usually the word that's like, I'm thinking that really loud and I'm in those meetings. The blind guides. So I think that it's about building relationships with the staff that are dealing with that.

And I think in order to get to that point, small developers probably need to international residential code compliant buildings and establish trust with their neighbors so that you've built that foundation of support and you're blunting some of the opposition that might come if you're looking for some kind of entitlement later. But if you're just asking for building permits,

build your track record and build your trust, be the person who does what they say they're going to do. Hire local folks, train local folks, create enough daylight in between you and the big production builder from out of town or the developer from the other side of town where you are, if this is going to happen, we would rather our person do it. Janine is the person who's built all those great carriage houses in our neighborhood.

And we would like to see her be able to continue to do that. So we think that, you know, it's reasonable that we should, you when she renovates the old trolley stop, mixed use buildings, she shouldn't have to put in fire sprinklers, you

Kevin K (51:19.954)

Yeah. Yeah. And to kind of put a last piece on it that is ever much so fun is there's the human element to all of this. And I was, I actually saw a tweet this morning from our friend Aaron Lubeck about, I think a builder friend in where he is in Durham had a project submitted and one staff reviewer for some, I can't remember the exact story, but there were like two different staff reviewers or code reviewers on it. And one of them came back with like

No,

R. John Anderson (51:53.264)

Hard to get good help.

Kevin K (51:54.686)

That's OK.

R. John Anderson (51:57.216)

I'm being protected from marauding squirrels on the telephone wires.

Kevin K (52:01.022)

I fully understand. But basically, one staff person had no comments, and another one came back with 25 comments. And so there's a human element to this that the people who review your application and are looking to apply the building code may end up with very different interpretations of what is required and what is not required. So John, advice on how to navigate

R. John Anderson (52:27.182)

Well, the plan checkers and the building inspectors report to the chief building official. And that's a position that you have to identify when you adopt the building code. You know, you're, you're, you know, that's a job description that, that has to get filled. And sometimes that person has many other responsibilities, but there's somebody identified as the last word as the chief building official. Appointments with that person.

and conversations about intent and, you know, demonstrating that you're trying to build something that will be safe and reasonable. And that you're trying to get to the intent of the code. If you can build that relationship,

if you're sideways with a plan checker, it's like, well, we have, we have two very different opinions about this. Can we bring in the chief building official to, you know, break the tie or maybe advise a different approach? You know, are you okay with that? It's like, it's, it's, you know, it's not personal, you know, I definitely think this is working and my, my architect who's responsible for the safety of this building until the end of their natural life,

that person, you know, has signed off on it. The city's got no liability here, even though you believe it does. So we think we've got you covered for liability. We think we've been responsible as professionals. How about it? I mean, come on, you know, but you need to build that relationship demonstrating that you are not not someone who's, you know, given to tantrums

or calling city council members, city manager, you're not gonna go over their head. You wanna work it out within that smaller circle. The day you go overhead, you go up the food chain, you can mark that day because now from now on, all your plan checks are gonna be given extra scrutiny and given to the most senior person and the most careful person in the group.

R. John Anderson (54:41.014)

More difficult is the situation where somebody will pick up a set of plans that are pretty much done by a junior person and then redline it and say, no, no, it has to be like this. And your conversation likely when you get your plans back is going to be with the junior person who can't actually articulate what the senior person did. And it's quite possible that they were wrong.

but now you got that extra layer to go through. So to be able to get to the person who can say grace on the whole arrangement and build that relationship and demonstrate that while you have that relationship, you're not always going to pull that card. You're not going to do it for every little thing. And it's like the...

There's kind of a quick sorting system that plan check and building inspectors have. If this person is basically doing a good job, I'm going to give them the benefit of the doubt because they're consistently doing a good job. If this person is a jerk, I think it's my duty to protect my fellow building inspectors from this monster.

You know, and I need to actually maybe cross the line a little bit in order to be able to put this guy in his place because he never read the code. You know, so the, there's a whole lot of high school hallway one -upsmanship that goes on usually between males. I think that female building officials and female contractors and developers typically are more rigorous in

study and their presentation and their communication skills. and I think recovering elementary school teachers who've become small developers, their communication skills are awesome because their expectation for human behavior is fairly modest.

Kevin K (56:41.662)

No doubt, no doubt. All right, John, before we wrap, any final words or thoughts for people to think about as they look at codes?

R. John Anderson (56:53.602)

Well, I think that particularly for small developers, it's really important because of the level of complexity and kind of the possibility that code issue will just stop your project altogether. It's important to become, don't leave it to your architect to be the last word on the code. It's OK to have spirited discussions about it. But

Get Francis Ching's books about, you know, the building codes illustrated or the international residential code illustrated, which when you read the code, there are a lot of things that you end up making a sketch or a diagram. So you see if you've got it figured out because it makes references from one section to another. You can't just hold it all in your head. The great thing about the Frank Ching books is that he's made those drawings much better than you

and they communicate really effectively and you can bring that into the meeting. don't subcontract code compliance to somebody else because just like you wouldn't subcontract your personal guarantee on the construction loan to someone else, it's that serious. And start with small projects. Make small code problems and solve

Kevin K (58:10.386)

Yeah, no

Kevin K (58:16.638)

Yes, some of us may. We may learn to take that advice one day or maybe not, who knows.

R. John Anderson (58:24.448)

Well, I have a steady stream of I told you so's on any day of the week. So I'm happy to help people out with that.

Kevin K (58:33.054)

Yeah. All right, John, thanks so much. this. All right. See you later.

R. John Anderson (58:35.994)

Sure, take care.

Thank you.