Residential Building Codes, Affordability, and Health Protection: A Risk-Tradeoff Approach

Authors

  • James K. Hammitt,

    Corresponding author
    1. Associate Professor of Economics and Decision Sciences, Center for Risk Analysis, Harvard School of Public Health
      2 To whom correspondence should be addressed at Harvard Center for Risk Analysis, 718 Huntington Ave., Boston, MA 02115 (tel: 617/432-4497, fax: 617/432–0190).
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  • Eric S. Belsky,

    1. Executive Director, Joint Center for Housing Studies, Harvard University
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  • Jonathan I. Levy,

    1. Doctoral Candidate, Environmental Science and Risk Management, Harvard School of Public Health.
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  • John D. Graham

    Corresponding author
    1. Professor of Policy and Decision Sciences and Director, Center for Risk Analysis, Harvard School of Public Health.
      2 To whom correspondence should be addressed at Harvard Center for Risk Analysis, 718 Huntington Ave., Boston, MA 02115 (tel: 617/432-4497, fax: 617/432–0190).
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2 To whom correspondence should be addressed at Harvard Center for Risk Analysis, 718 Huntington Ave., Boston, MA 02115 (tel: 617/432-4497, fax: 617/432–0190).

Abstract

Residential building codes intended to promote health and safety may produce unintended countervailing risks by adding to the cost of construction. Higher construction costs increase the price of new homes and may increase health and safety risks through “income” and “stock” effects. The income effect arises because households that purchase a new home have less income remaining for spending on other goods that contribute to health and safety. The stock effect arises because suppression of new-home construction leads to slower replacement of less safe housing units. These countervailing risks are not presently considered in code debates. We demonstrate the feasibility of estimating the approximate magnitude of countervailing risks by combining the income effect with three relatively well understood and significant home-health risks. We estimate that a code change that increases the nationwide cost of constructing and maintaining homes by $150 (0.1% of the average cost to build a single-family home) would induce offsetting risks yielding between 2 and 60 premature fatalities or, including morbidity effects, between 20 and 800 lost quality-adjusted life years (both discounted at 3%)each year the code provision remains in effect. To provide a net health benefit, the code change would need to reduce risk by at least this amount. Future research should refine these estimates, incorporate quantitative uncertainty analysis, and apply a full risk-tradeoff approach to real-world casestudies of proposed code changes.

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