Building Costs Articles

FINDING YOUR CONSTRUCTION BUDGET

The old chicken and egg, “what comes first metaphor“ in construction is that you have to invest some resources on plans that you believe to be in your ball-park, before contractors will give you an actual bid.  From experience the licensed general contractors will tell you they will spend the time to give you a firm bid ONLY when you give them a set of exact plans.  From experience the actual costs are generally larger than the desired (lower) cost.

You will get a set of stamped approved of plans for your permit. The nomenclature may state the area size of the existing building floor plan and the area size of the proposed increase.  It may not itemize what is heated (habitable) versus unheated (uninhabitable).

With green buildings, it is a fine line as to whether you call your passive south glazed conservatory greenhouse heated rooms conditioned habitable or not.  Ball-parking your floor area times some square footage unit cost is not scientific.

Marilyn does not guarantee construction cost.  She is unable to do this because she is not the person who bids or performs the work.  However, her process is to allow the bona fide installers and suppliers quote their costs to the client.  For example, in California (2006) radiant floor heat installer’s quoted $12k to $14k for a whole house system.  Just putting in the pex with appropriate layers of insulation, radiant barrier foil, and flat sheets of mesh to secure the pex to, is quite simple. However, the controllers, thermostats, heat exchangers, boilers, and maze of copper piping that interconnects the system adds up.

Subcontractors and suppliers, whether for structural systems or utility systems, should be able to give a price per square foot for the actual parts they supply, but a licensed general contractors should give you a price to put the whole project together.  Marilyn recommends that you get the price from at least two to three licensed general contractors for the total completed phase of construction.

It may be possible to do your project “owner-builder” for 20% less than a licensed general contractor IF you are as efficiently orchestrated and organized as a professional.  To proceed without careful research is a recipe for unexpected costs, a dilution of creative project enthusiasm, the possibility of lower quality workmanship, low return on your investment and potential property appreciation, and worst of all, an unpleasant experience.

In her early days, Marilyn often took projects at a reduced rate for clients who had a construction wish list appetite larger than their budget.  She advised them about cutting corners, but they often preceded anyway, ignoring her insights about an insufficient budget.  The most common ending to this scenario is that the reality of cost is overrun with bitterness.

In the pre-banking and mortgage financial crisis days, it was easy to qualify for a construction loan to do a project properly.  The safest and only way to avoid construction overruns and change orders, is to get a bid from a licensed, bonded, insured contractor. Here is the protocol Marilyn suggests:

• Get a construction loan with that contractor listed as the installing party.
• Keep the contractors bid and advance draw request on file with the construction loan.
• The bank only makes draw payments to the contractor when an inspector views work installed and materials stored on site based on predetermined increments.
• Contractors who have done this before are familiar with the paperwork and process.

A set of plans is an affirmation to manifest a building that is yet a dream in the imagination. There are immense details for every trade, and it is difficult to spend the time to consistently verbally explain it to every supplier, subcontractor, and laborer.  Plans are a tool that save you that time explaining all the details.  Different peoples’ minds and tastes create different interpretations of the same conversations and explanations. Plans represent a consistent graphic image of the desired outcome and can keep people on the same page.  If the scope of the work changes AFTER the initial set of plans have been prepared, it is important to revise the plans so that all parties working on the project are referring to the new iteration, and not amending the void drawings with in inconsistent verbal scope of changes.

Preparing plans for construction is an imperfect science. There is no perfect set of plans. The success of a project depends not only on the experience of the parties doing the work, but also on their spirit of cooperation.

You have an idea of your project, and you have a wish list of features you would like in to incorporate. Now it is time to become an empowered client by doing your homework.  Review the “Project Cost Breakdown Sheet” and assess whether the estimated total project costs for your wish list is too high for your budget (most common scenario).

Fees are often charged by very different methods. For example:

• Architects charge around 40% of their projects by a negotiated fixed fee.

• About 35% of project work is charged at a negotiated hourly rate.

• About 20% of projects are charged as a percentage of construction cost.

• The remainder is charged in various combinations, such as fee per square foot.

Refer to the article “Architect and Engineering Fees” for more information.
You can also use the following list (by category of tools)  to help calculate an approximate cost estimate:

SOFTWARE

• Building for Environmental and Economic Sustainability or BEES has made available a new version of a software package for selecting cost-effective, green building products.  The software program is based on standards agreed to by the EPA, industry, and public interest groups. The new version includes actual environmental and economic performance data for over 65 building products. http://www.nist.gov/el/economics/BEESSoftware.cfm
• Builder’s Book offers books, DVDs, codes, forms, study guides, software, and productivity tools for engineers, architects, and builders of all kinds. Intended for planning and estimating and includes building costs by square foot for different types of occupancies.  http://www.buildersbook.com/
• Builder Space: Offers many cost estimating software options
    http://www.builderspace.com/divisions/estimating-software.html

BOOKS

• Green Building: Project Planning and Cost Estimating by R.S. Means
• Building Green in a Black and White World by David Robert Johnston
• Estimating Home Construction Costs by Jerry Householder

LINKS:

• Costing Green Revisited by Davis Langdon
  http://sustainability.ucr.edu/docs/leed-cost-of-green.pdf
• Building Green on a Budget: Low Cost Green Design and Construction Practices
  http://www2.buildinggreen.com/article/building-green-budget
• The Costs and Financial Benefits of Green Buildings
  http://www.usgbc.org/resources/costs-and-financial-benefits-green-buildings-report-california%E2%80%99s-sustainable-building-task
• Managing the Cost of Green Buildings
  http://www.calrecycle.ca.gov/greenbuilding/design/ManagingCost.pdf
• The Costs and Financial Benefits of Green Buildings
  http://www.usgbc.org/Docs/News/News477.pdf
• Hire a Professional Estimator or Quantity Surveyor:American Society of Professional Estimators
  http://www.aspenational.com/
• ICBO Building Code:
  ICBO has unit costs (in square feet or lineal feet) of habitable rooms, garages, carports, decks, fences, patios, and more.
  Download ICBO Building Code standards from ANSI http://webstore.ansi.org/ansidocstore/dept.asp?dept_id=23&source=google&gclid=CNbxhsGN9olCFR2PLAodERfg_g
• Santa Cruz Assessors (For those outside Santa Cruz County, Google your County and the word ‘Assessor’):
  Has unit costs (square feet and lineal feet) for habitable rooms, garages, carport, covered parcel, basement, attic, decks, patios, driveways, fences, trellis, landscaping, concrete paving, stone paving, concrete slab and asphalt paving.   http://sccounty01.co.santa-cruz.ca.us/ASR/
  

OTHER HELPFUL RESOURCES:

• Multiple Listing Service (MLS):
  Offers realtors who have approximate value of room types (see comparables to your project).
  http://www.mls.com/
• American Society of Appraisers (ASA):
  Offer approximate value of room types (see comparatives to your project).
  http://www.appraisers.org

APPROXIMATE ARCHITECTURAL AND CONSULTANT FEES AS A PERCENTAGE OF CONSTRUCTION

Architects fees are a percentage of the construction cost (from Fred Stitt’s, guidelines publications:  http://www.guidelinesonline.com, current year)

TYPE TYPICAL ARCHITECT FEES RANGE AS PERCENTAGE OF CONSTRUCTION:

Cost baseline percent and standard percent, comprehensive percent, highest level full- service fees your project estimate dwellings, single family (developer, quality tract) new construction 3- 8% 3% 6.40% 8% 8- 12%
* unlicensed designer or drafting service fees are considerably lower than those cited above.

Dwellings, single family (developer, luxury) new construction 7.5- 12.5% 7.50% 9.50% 12.50% 12.5-14%

Renovation/additions n/a- 16% n/a 15% 16% 16- 18% note (for new construction): typical construction cost range: $105-$262 Average cost: $140 sq. ft. (not including site work)
Typical range of building sizes: 2,500- 6,000 sq. ft. average
size: 3,500 sq. ft. dwellings, single family (custom luxury) new construction n/a- 17.5% n/a 15.20% 17.50% 17.5- 19% renovation/
Additions n/a- 20% n/a 18.50% 20% 20-22% *note: consultant fees are % of architect’s fee (not % of construction).

APPROXIMATE FEES FOR ENGINEERING SERVICES

Type of fee your project estimate structural engineering note: Of gross design service fee (wide variance). 5%- 9%

Mechanical Engineering (HVAC and plumbing) note: Fees can be much higher depending on what state you live in because some have special detailed energy saving calculations. 4%- 12%

Electrical engineering note: Depends
on how much electronic services you require (i.e. if you have a smart home) 2%- 10%

Civil engineering
note:  This could be much higher depending on site (i.e. hillside or coastal
construction, or areas requiring extensive grading, drainage, or fill) 1% or less- 3% Other Note: LEED, Interior Design, Landscape Architecture, Acoustical, etc. 05%- 3%

There are more opportunities than many people think to finance a green building project.  Funding can come from either private finance programs or government finance programs.  Either way, it is important to know all your options for receiving funding as well as how to obtain the funding.  Please see the extensive link database at TheBlueArchitect.org for resources regarding financing opportunities.

The cost of green building can be initially more expensive than conventional methods.  However, the long-term return on investment (ROI) and energy savings can be significant.  In a recent survey from LEED and the U.S. Green Building Council, it was determined an average of 0-2% increase associated with green building costs with an average of 20-40% ROI for commercial properties.

In the residential market, it can cost roughly $10,000 to green an average 1,500 square foot home, with an increase of one-third of one percent (0.0033) over conventional building costs.  Building an “off the grid” home can represent estimates ranging from 25-80% savings in utility costs.  For additional savings you can harvest solar and wind energy and reclaim your greywater as well as install more efficient components like a smaller water tank and more efficient heating systems.  In the long-term, building green will allow you be more energy independent, sustainable, and capture significant utility savings and return on investment.