Incentivizing Installation of Residential Sprinklers

Incentivizing Installation of Residential
Sprinklers

Appendix A: Incentivizing the Installation of Residential Sprinklers

Some jurisdictions don't have the authority to require sprinkler systems in residential dwellings. This may be due to a legislative prohibition, recognition that the community isn't ready to impose the requirement, or some other reason. There are, however, developments where the installation of residential sprinkler systems would greatly enhance the overall community's safety and reduce the need for reactive fire response even though there is no regulatory requirement. In these cases, some code officials or other public safety officials will develop a package of incentives to offset the cost of the sprinkler installation, creating a "win-win" for the community and the developer.

When identifying appropriate incentives for residential sprinklers, it's necessary to review the benefits (and weaknesses) of these systems. The residential sprinkler standard (NFPA 13D) was developed to provide a solution to the residential death and injury problem at a lower cost than a typical commercial sprinkler system. From NFPA 13D:

"Recognizing the need to reduce the annual life loss from fire in residential occupancies (about 50 percent of total loss of life by fire), the Committee on Automatic Sprinklers appointed a subcommittee in May 1973 to prepare the Standard on the Installation of Sprinkler Systems in One- and Two-Family Dwellings and Mobile Homes."

Although these systems have a very positive impact on property loss, they are primarily intended to reduce the loss of life from fire; therefore, the standard doesn't require many spaces in a home to be covered by the sprinkler system. Areas that do not require coverage include attics, closets, most bathrooms, and some under-floor areas. And, the required duration of the water supply to the system is seven to ten minutes, depending upon the supply arrangement.

Highlighting these issues is not intended to discourage incentivizing developers and builders to install sprinklers, and it is not intended to promote modifications to the national standard to make it more restrictive. It is simply to provide some balance to the thought processes necessary for reasonable, appropriate incentives. According to the latest report from Scottsdale, Arizona, where about half of the homes are sprinklered, the property loss from fire is about a third of the national average, and life loss is nonexistent in sprinklered homes. These data appear to be consistent with information available from other sources. Based upon this, it is clear that residential sprinkler installations will improve a community's fire safety environment, so finding the appropriate incentives to offset the cost of their installation could be a net benefit to the citizens served.

The Fire Protection Research Foundation (FPRF) completed a study in 2010 of incentives offered in 16 jurisdictions. The purpose of the study was to identify "common" incentives being offered, and to quantify the value of those. This was a follow-on report to their study of the cost of installing residential sprinkler systems. In the latest study, it is reported that the average value of an incentive package of the 16 jurisdictions studied is $3,365. This includes $145 for the first year's value of homeowner incentives (reduced property tax, special financing options, etc.); $1,945 for builder-oriented incentives (reduced fees, reduced fire ratings, etc.); and $1,271 for developer-oriented incentives (increased hydrant spacing, reduced fire flows, etc.). Based upon this report, it's likely that an incentive program can be assembled that will offset most, if not all, of a residential sprinkler system installation. The following discussion of common incentives should provide for a reasonably complete discussion about the efficacy of each incentive based upon the conditions in a specific community.

Incentives for Homeowners:

Property tax reduction: The portion of property taxes (or other funding methods) that are used for fire protection can be easily identified in any jurisdiction's budget. Developing a formula that can be used to provide for a reduction in taxes paid for fire response will be logical in many communities. If a community expects the fire response need to be reduced by some percentage by installing residential sprinklers, the amount of taxes that go to fire response activities might be reduced by a like amount.
Financing incentives: At least one state has instituted a grant program whereby individual grants are made available to those who install residential sprinkler systems. This is an innovative concept that essentially rebates a portion of property taxes, an amount determined by the local fire commission or fire district.
Insurance cost reduction: While not technically an incentive that a jurisdiction can offer, homeowners should know that they may enjoy fire insurance savings of up to 10 percent of their premium. The FPRF study indicates that the average is about 7 percent in the communities they studied. This incentive will recur every year for the life of the home, and can be shown to be very valuable over time.

Incentives for Homebuilders:

Reduced water service impact fee: This incentive is based upon the philosophy that less water will be necessary for fire suppression when a sprinkler system is present. If an entire subdivision is sprinklered, pipe sizes can be reduced, pumping capacity can be reduced, and the overall cost to the community for water service to the subdivision is less. This savings can be passed along to the builder by reducing the impact fees associated with service.
Reduced fire impact fee: Similar to the reduction in water impact fee discussion, this incentive is based upon the philosophy that residential sprinklers will significantly reduce (but not eliminate) the need for manual fire suppression, thus a reduction in the impact fee is logical.
Reduced building permit fees: At least one jurisdiction provides for a substantial (40%) reduction in building permit fees for homes built with sprinkler systems. While it's difficult to tie this reduction to a specific savings to the jurisdiction, the theory is that the installation of sprinkler systems will result in a safer community, and fire will be less of a financial burden on the community. Because the commercial building permits in the jurisdiction cited fund more than the actual cost of administering that program, the excess revenue is applied to the residential sprinkler incentive.
Reduced fire ratings for building assemblies: Because there are very few requirements for passive fire protection in one- and two-family dwellings, the only significant savings available is in the rated separation between the garage and the living space and, where required, exterior wall ratings. The value of the separation between the garage and the living space isn't significant, but it may add enough to the overall incentive package to make it worthwhile. Some jurisdictions allow this incentive only if the garage is also sprinklered. In some cases, the offsetting costs are comparable, thus it loses its effectiveness as an incentive for installing the basic residential system. Exterior wall ratings will be addressed under "Developer Incentives".
Eliminate the requirement for rescue/egress windows: This has become an item of much debate in the fire service community. When attempting to provide incentives for residential sprinklers, one thought is that the systems are specifically intended to provide enough time for occupants to escape in case of fire, thus negating the need for rescue/escape windows in sleeping rooms and other habitable spaces. While this argument is logical, many in the fire service find it difficult to agree to such an incentive because of the inherent feeling that people need a way out, and firefighters need a means to rescue fire victims. It's a very emotional argument, one that should be vetted with all involved before including it in a package.

Incentives for Developers:

Increased spacing of fire hydrants: Typical current policies require hydrants to be spaced 300 to 500 feet apart. A common incentive is to allow an increase of 50 to 100 percent, reducing the number of required hydrants by up to half. In the majority of cases where a fire grows out of control in a sprinklered home, there will be no need for fire hydrants; occasionally, tank water will be needed to complete extinguishment, but most of the time the fire department activities will be limited to overhaul and cleanup. When a fire does grow beyond the capability of a sprinkler system (attic fire, exterior fire), the time to establish a water supply from a hydrant that is 500 more feet from the fire would amount to the time it takes to drive the apparatus an additional 500 feet; the time to hook up, etc., should be the same.
Decreased fire flow requirements: Historically, commercial occupancies have enjoyed a reduction in required fire flow of up to 50 percent when equipped with sprinkler systems. This seems logical, as those systems are full coverage systems. When applying this logic to residential sprinkler systems, consideration should be given to the fact that they are partial coverage systems with limited water supply requirements. It may be appropriate to provide for some reduction in fire flow; how much depends upon the response capability of the fire department, the ability to provide water volume from other sources, and the separation distances between homes. A single dwelling may be an acceptable loss; however, if a reduction in fire flow is combined with a reduction in exterior wall ratings for homes in close proximity, it could result in the loss of several homes during a single event.
Reduction in building setbacks: Reducing the exterior wall ratings for homes located in close proximity can result in fairly substantial savings. This incentive should be considered in light of the fact that wall ratings are required only when the structures are built closer than five feet to a property line. Eliminating the fire resistance requirement would allow for homes to be constructed closer than 10 feet apart, possibly abutting each other (zero lot line developments) if they were equipped with residential sprinklers. Granting relief from the setback requirements is very attractive to developers, as they can develop more lots from the same acreage; however, consider that these sprinkler systems are not full coverage systems, and any decisions should weigh all the information appropriately.
Increased zoning densities: Where zoning ordinances restrict the number of homes per acre or other unit of measurement, the density may be increased if all homes in the subdivision are sprinklered. This will allow more lots per acre of land, providing similar, and possibly superior, advantages to the developer as reducing building setbacks.
Reduction in required road width: Streets and roads are some of the most expensive components of most developments. A reduction in width of only a foot or two will result in substantial savings for the developer. The Fire Protection Research Foundation report states that the average savings in the jurisdictions in their survey was over a $1,000 per lot. When considering an allowance for reducing road width, however, other issues need to be contemplated. How is parking to be managed? If homes are constructed very close to the street, with little room for parking in the driveway, we should assume automobiles will be parked on both sides of the street. What is the available width under that scenario? How will garbage trucks, snow removal equipment, and other heavy machinery access the area? All of these issues can be resolved, but a comprehensive solution should be developed.

For any incentive being considered, a long-term but innovative outlook should be used. Installation, maintenance, upkeep, and enforcement are all considerations for many of the incentives mentioned, as well as for the residential sprinkler systems themselves. Fire department considerations will include apparatus size and configuration, staffing, response times, and overall response capability. Residential sprinklers are the next revolution in fire safety, but we must not overlook the need for a level of redundancy in our community fire protection system.

As new developments are built, new, innovative incentives will be developed. The key to success is to be sure that a diverse stakeholder group weighs in on any incentive under consideration. Homeowners, elected and appointed leaders, homebuilders, developers, and fire service representatives must all have a voice in the process.

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