Do Building Codes Prevent Disasters?
Data show 2,500 to 3,000 people die in India every year because of poor construction methods. The government believes that implementing new building bye-laws in Indian states will deal with the problem to a large degree.
It is true that certain forms of construction make buildings more prone to collapse and regulations that prohibit developers from undertaking such modes of construction will prevent the collapse of certain buildings, and many possible deaths. However, this does not mean that setting uniform standards for construction will generally lower the likelihood of buildings collapsing.
Construction norms in India are outdated and do not take the advancement in technology into account. For example, if a new technological method is devised, the building laws do not change quickly enough and developers are forced to follow the existing norms. This itself may lead to many deaths that could have been prevented. Similarly, laws are not tailored for individual needs of home buyers and developers.
It is in the self-interest of real estate developers to build residential projects that do not collapse. If a residential project built by a certain developer collapses, his reputation suffers. In an industry where home buyers are not sure whether or not they will get their flats delivered on time, and whether or not they will get the amenities promised, track records of developers matter a lot. In fact, this is their most important asset. Whether a developer will be able to raise funds in the securities market or whether he will be able to easily get loans depends on his track record and reputation. So, if a developer has a track record of constructing better housing projects, he will be able to attract customers, investors and creditors more easily than the less scrupulous ones.
When building codes are imposed, a developer who has built a good reputation for himself over decades will be judged according to the same standards as a fly-by-night operator. Average developers will be able to meet the minimum standards more easily than experienced and reputed ones. It will not only kill incentives for innovation but also force real estate builders to spend money, time and effort in meeting arbitrary standards that do not otherwise make much sense.
Besides, when minimum standards are set, there will be a tendency among real estate developers to vastly exceed the minimum standards. This may seem paradoxical. But it is not. To draw an analogy, minimum standards set by academic institutions do not give students strong incentives to vastly exceed those standards.
If developers find that new technology will make buildings safer, and last longer, when there are minimum standards, they will still be forced to stick to the accepted methods of construction. They will be forced more to spend valuable resources, money and time meeting the building code than to adopt the new method that would have made houses safer to live in.