A Trailblazing Reform Supports Small-Scale Development in Memphis

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There’s no large city in America that’s doing a better job of pivoting to a Strong Towns approach than Memphis, Tennessee. And there are many working from easier starting points. For decades, Memphis aggressively annexed outlying land, juicing cheap suburban growth while older neighborhoods suffered poverty and blight. In recent years, city officials have made a remarkable U-turn, shifting their emphasis to building back up the city’s core neighborhoods and supporting the existing residents in them.

It’s working. Memphis is home to some stellar examples of bottom-up revitalization and urban reinvention, and no shortage of local heroes doing the work. Now, Memphis is continuing this impressive streak by tackling some deeper issues that are necessary for the city’s renaissance, but don’t really have a place in the public consciousness.

One of those is building codes. Memphis is now the site of a first-in-the-nation (as far as we, or they, can tell) building code reform intended to make it easier to build missing middle housing, by removing regulatory restrictions that too often cripple the financial feasibility of these small-scale projects.

Under Memphis’s new rules, three- to six-unit residential structures can now be built under the residential building code, instead of the commercial code. This is a change that may seem wonky and obscure to most laypeople, but any small-scale developer will tell you it’s a big deal. Here’s why.

Why Building Codes Need Reform

Nearly every American city and town uses a building code modeled on the International Building Code (IBC), and its counterpart, the International Residential Code (IRC). Cities are free to adjust the code for their own purposes—the model codes, published by a non-profit consortium, have no force of law. But because they are widely replicated, flaws in the code, where something reasonable to do becomes disallowed or prohibitively complicated, can now take a particular building and render it functionally illegal almost everywhere. Under these codes, a conservative approach to safety tends to result in one-size-fits-all requirements that make sense for big buildings, but kill the economics of small ones.

The most infamous example is that of fire sprinkler requirements. Under the commercial code, sprinkler systems are required; under the residential code, one- and two-unit buildings can be exempt from them. These systems are not truly necessary in a house-scaled building with modern construction techniques, and their expense can make it impossible to build a three- or four-plex with rents low enough for the local market to support in a place like Memphis.

To make matters worse, the cutoffs in the building code don’t line up with the ones often present in zoning, nor in financing arrangements. You can build a fourplex with a federally insured (FHA) mortgage that has a low interest rate, because it meets all of Fannie Mae and Freddie Mac’s requirements for a standard residential loan. But you can’t build it under the standard residential code. This creates a sort of twilight zone of buildings that should be the simple, replicable building blocks of our cities, but are extremely difficult to execute.

The IRC vs. IBC distinction also matters because many small-time and more affordable building contractors are familiar with the residential but not the commercial code. Conversely, a lot of the general contractors who know the IBC inside and out are building much bigger projects like block-size apartment complexes and large commercial buildings. So it’s difficult to find a contractor who knows the code to take on a missing-middle job.

“It’s really homebuilders who should be building those kinds of [three- to six-unit] buildings,” John Zeanah told me. Zeanah is the Director at the Memphis and Shelby County Division of Planning and Development, and he walked me through the changes Memphis is making.

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