THE ALLIANCE FOR BUILDING REGULATORY REFORM IN THE DIGITAL AGE, A PUBLIC-PRIVATE PARTERNSHP TO STRENGTHEN THE NATION BY BUILDING FASTER, BETTER, SAFER AND AT LESS COST
STAYING NUMBER ONE – ACTIONS TO ASSURE THE NATIONŐS SECURITY, ECONOMIC VIABILITY AND COMPETITIVENESS
As we move into the midway point of the first decade of the Twenty First Century the United States is at a critical juncture, a crossroads in our history. Where the Twentieth Century was the American Century, a century dominated by American productivity, economic and political strength; forces are at work that may see the dynamism of our economy supplanted by that of other nations before the new centuryŐs end.
Consider the following: globalization and the information revolution are shifting more and more of our jobs and industry overseas (especially to Asia); we are entering an era of increased competition for world oil resources, our population is aging and will place major pressures on our housing, health care and social security systems; our nation remains a target for terrorists who together with major natural disasters continue to threaten our people and place our economy at risk.
At this juncture, it is essential that our nation make public policy and funding decisions that maximize our effective and efficient use of our manpower and limited financial resources to address the above forces. We need to identify key focal or pressure points in our economy where a targeted adjustment can be made that enhances our productivity and enable us to successfully address these forces of change.
A KEY FOCAL POINT – OUR CONTRUCTION INDUSTRY
Construction has long played a pivotal roll in our nationŐs history. Administrations have used incentives in the housing and construction industry to help pull the nation up and out of recessions and have implemented fiscal policies to slow down construction to cool off hyperinflation. This has been possible because construction touches nearly every aspect of our economic structure. New construction and renovation are responsible for over 20% of our gross domestic product. Our buildings comprise over 60 % of our national wealth, make up much of our national infrastructure, are the site of over 90% of our economic activity, shelter all of our people, and buildings consume over 40% of our energy. Reflecting their importance, our buildings have proven to be the selected targets of terrorists, both foreign and domestic. Lastly the major natural disasters of 2004 and 2005 have demonstrated the vital importance of disaster resistant construction and infrastructure.
While many segments of our economy, agriculture, health care, telecommunications, manufacturing, have all gone through major increases in productivity, our construction industry has not. In most cases, today we still regulate, design, construct, and operate buildings in much the same manner as we did at the beginning of the 20th Century. For example, a September 2004 study funded by the National Institute of Standards and Technology documented that better and interoperable software systems could have saved the U.S. construction industryŐs commercial, institutional and industry building sectors as much as $15.8 billion during 2002 from added costs due to multiple data entry, inefficient building operation and maintenance and lost business opportunity.
In addition to these significant drivers, we are at a unique point in our nationŐs history where our infrastructure – water, sewer, power and transportation are late in their projected life cycle and require replacement. Performing any substantial portion of that replacement or renewal without optimizing the efficiency of all aspects of our design, construction, regulatory oversight, operation and maintenance will cost the nation and its cities and states billions of dollars in added expenses that could have been avoided.
Recent changes in technology afford our nation an opportunity to increase productivity to all segments of our building construction industry. The following public/private sector initiative, coordinated and properly supported could significantly improve homeland security, increase productivity in our construction sector and aid the nation in addressing our pressing problems of jobs, economic growth and competitiveness, disaster resistance, infrastructure renovation, energy conservation, public safety and help us better house our growing number of elderly.
REGULATORY STREAMLINING AND THE USE OF INTEROPERABLE INFORMATION TECHNOLOGY
Regulations governing the design and construction of buildings contribute up to 20% of the cost of construction. Even in building a mid-rise residential structure, a single dayŐs delay caused by the regulatory process adds an additional $100,000 to the cost of construction. The regulation of the design and construction of buildings are carried out by approximately 44,000 jurisdictions in this nation, most of which operate using processes and procedures little changed in over fifty years.
Streamlined building regulatory practices combined with the effective use of information technology have been identified and supported by a public –private partnership, the Alliance for Building Regulatory Reform in the Digital Age. The Alliance has supported projects and documented ways in which such streamlining is reducing the regulatory cost of construction by up to 60%. Coupled with interoperable hardware and software, these practices can radically increase the ability of state and local governments to assure the effectiveness of their public safety programs and speed up the construction process. For example, the simple use of online permit processing alone can save government and industry over $ 15 billion a year and enable jurisdictions to share with each other and their first responders critical information about buildings during a disaster.
Other benefits to our nation from streamlining and effective use of information technology include:
á Increasing the speed and effectiveness with which governments can assure that the buildings and other infrastructure that are designed and built or renovated in this nation are safe, energy efficient, and accessible.
á Supporting efforts by the nationŐs capital facilities industry, the Department of Commerce and the General Services Administration to incorporate interoperable information technology into the building design, construction, operation and maintenance (A NIST commissioned study in 2004 found that lack of interoperability costs the owners of capital facilities over $15.8 billion a year in time delays, additional construction costs and lost business opportunities).
á Facilitating technology transfer to both government and the construction industry including the application of innovative technologies to both new houses and to existing homes being retrofit to enable more AmericanŐs to age in place (Eldertech).
á Stimulating greater national uniformity in the codes and standards that jurisdictions adopt thus reducing costs of building products and materials and facilitating the adoption and use of new technologies.
á Making our communities more competitive in the global marketplace by reducing the regulatory cost of construction and infrastructure renovation and re-purposing.
WHY A FEDERAL ROLE?
If the above areas are so critical to our construction industry and to state and local governments then why have they not undertaken such reforms?
To start with our construction industry is too fragmented and too bound by short term construction deadlines and financial pressures to organize itself to lead such national reforms. Moreover, faced with the reality that construction is regulated at the state and/or local levels and not the federal level, the path of least resistance to the construction industry is to continue to Ňgo along to get along,Ó in terms of their daily interactions with state and local government.
For their part, State and local governments, with their over 40,000 regulatory bodies, do not have either the financial resources or the critical mass to undertake such changes. Moreover, neither the construction industry, nor individual political jurisdictions at the state and local level own an overarching view or responsibility for such issues as housing our baby boomers, replacing or renovating an aging infrastructure, homeland security, let alone our nationŐs overall ability to continue to effectively compete in the global economy. These are issues of national policy--issues where well targeted federal leadership and funding can play the catalyst role in rapidly bringing about the changes that are possible in our building construction and regulatory process to address the challenges outlined in this paper and in the National Science and Technology CouncilŐs Subcommittee on Disaster ReductionŐs Report, ŇGrand Challenges for Disaster Reduction.Ó
REQUESTED ACTION – SUPPORT FUNDING OF STREAMLINING AND INTEROPERABILITY INITIATIVES
For the above reasons, left to current levels of activity, the AllianceŐs streamlining project could well take decades to bring about changes in the productivity level of our nationŐs construction industry. With well placed funding support the Alliance for Building Regulatory Reform in the Digital Age can speed the transformation of these critical aspects of our nationŐs economy and enhance public safety.
In that regard the Alliance members are pledging $500,000 in in-kind services and are seeking $7 million in federal funding over a three year period for the following activities:
á Complete the development of regulatory streamlining tools that state and local governments can adopt and use. These include interoperability standards for hardware and software used in building design and construction and regulatory processes, national distribution of a Guide on How To Streamline the Building Regulatory Process, Model Procurement Requirements and expanding the website for state and local governments to access streamlining resources. ($300,000)
á Matching streamlining implementation grants to state and local governments.
($6,500,000 over three years)
á Model mutual aid agreements and other disaster management tools for state and local building departments. ($50,000)
á Development of a prototype of an interoperable secure database of building and evacuation plans for first responders. ($100,000)
á Coordination of interoperable software between the building regulatory and building construction processes. ($50,000)
The $7,000,000 over three year period in requested federal funding would result in a potential annual savings of over $15 billion to our construction industry and to state and local governments.
The Alliance is a 44 member public-private partnership comprised of associations representing state and local government, the building construction industry, academic institutions and federal agencies. The Alliance was founded in the summer of 2001 to develop programs that help reduce the regulatory cost of construction through the effective use of information technology in the building regulatory process.
The AllianceŐs mission is to enhance public safety and improve economic competitiveness through the use of information technology to enable the nationŐs construction industry to building faster, better, safer and at less cost.
Alliance partners include: U.S. Conference of Mayors, National Governors Association, National Association of Counties, American Institute of Architects, American Society of Civil Engineers, National Association of Home Builders, Association of Major City and County Building Officials, International Code Council, National Fire Protection Association, FIATECH and six federal agencies including the National Institute of Standards and Technology, General Services Administration, U.S. Department of Energy, U.S. Department of Housing and Urban Development and the U.S. Department of AgricultureŐs Rural Housing Service.
Secretariat Services have been provided to the Alliance by Robert Wible, former Executive Director of the National Conference of States on Building Codes and Standards, an executive branch organization affiliated with the National Governors Association and the Council of State Governments.