CHARLOTTE — After severe weather strikes and homeowners sort through the aftermath, they often see their insurance skyrocket or they’re getting dropped altogether.
In states like California and Florida, insurance providers are pulling out due to the increased risk of extreme weather.
In North Carolina, insurance rates are rising too, though reports show providers are still seeing profits in the state.
Rob Howard, a Boone-based developer and a member of the North Carolina Building Code Council, expects things will worsen unless the state builds better, more resilient homes. According to FEMA, the state has some of the weakest codes in the region.
“The first step is they’re raising rates, you know, so homeowners’ insurance premiums are going up, making housing less affordable,” he said. “Who’s going to suffer? It’s the people who are buying and living in these homes.”
Along with the rest of the Building Code Council, he proposed updating the code to the 2021 edition of the International Building Code, requiring developers to build homes to higher weather resiliency and energy efficiency standards.
Last year, the state legislature blocked those efforts by passing a law that froze building codes until 2031 and created a new residential building code council to examine and update the code. This session, Senate Bill 166 further overhauls the Building Code Council, reducing the number of members from 17 to 13, roughly half of whom will be appointed by the legislature, instead of the governor.
The reduction also removes certain longtime member positions on the council, such as the seat for a public member and an architect.
“How do you eliminate architects from the Building Code Council?” Howard said. “Those are exactly the kind of seats ... the kind of professionals and professional opinions knowledge that we need on that council.”
The bill passed the legislature with bipartisan support but Gov. Roy Cooper (D) vetoed it earlier this summer due to his concerns about how it would impact resiliency and future energy efficiency efforts. The North Carolina Senate is expected to take the bill up again in September.
The North Carolina Home Builders Association calls SB 166 one of their top legislative priorities of the session. Tim Minton, the group’s executive vice president, said NCHBA was not involved in drafting the parts of the bill focused on the code council, but he said the organization believes SB 166 is essential for keeping home building and therefore home costs as low as possible in the state.
“We’re always in terms of looking at ways that we can help reduce the cost of housing in the sense of affordability,” he said. “Our national folks did a study that 24% of the cost of a house is regulations.”
Specifically, Minton said the energy efficiency and weather resilience requirements the Building Code Council were pushing would add roughly $20,000 to the cost of a new home. At that cost, he said any energy savings from the efficiency standards provide no long-term cost-savings to homeowners. He is also skeptical that adding stricter building codes would have any impact on insurance rates.
“Florida has more restrictive building codes in North Carolina, but insurance companies are leaving there. California has more restrictive building codes than North Carolina, and insurance companies are leaving there,” he said.
For its part, the Insurance Institute for Business and Home Safety called the previous year’s legislation “one of the most detrimental steps of any state reducing its building code system of protections.”
Howard rejects the NCHBA’s $20,000 estimate. As a homebuilder who builds energy efficient housing himself, he said it adds closer to $7,000 to his construction costs, most of which is offset by a $5,000 tax credit.
He believes the real cost to homebuyers would come down the road, should they need to rebuild if disaster strikes or simply retrofit their home to take advantage of the latest technology.
“You have to do it right the first time,” he said. “That’s when you have the opportunity. It’s most cost-effective when you’re building it.”
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