Residential Construction Cost

Housing construction costs have risen sharply in the last few years.  This means that not only the large, market developer home builder prices are up, but so are those of the small general contractors and all the associated trades - plumbers, carpenters, electricians, etc.  

That is very apparent especially in Boulder.

rising Construction Costs in Boulder

If the cost of obtaining a building permit is any indication of the rise of the overall cost of construction then Boulder’s fees may be indicative of these skyrocketing costs. Boulder’s expensive and time-consuming permitting process may be in place, at least in part, to restrict growth. So, although significantly higher than costs from the Western Slope, the rise of construction costs along the Front Range can be reflected in Boulder’s increasing expensive permitting fees.

Building Permit Costs

To demonstrate:  building permits and fees for a single-family, 3800 square foot, new construction house on an empty lot in Boulder as evidenced by one of my past projects:

• Building Permit fee: $3,439.00

• Growth Management Allocation fee: $26,000.00

• Plan Check fee: $860.00

• City Sales Use Tax: $8,525.00

• Electrical Permit fee: $232.00

• Mechanical Permit fee: $1,115.00

• Plumbing Permit fee: $119.00

• Residential Energy fee: $84.00

• Capital Facility Impact fee: $6,028.00

• Utility-Water, Irrigation & Fire: $300.00

• Water Meter: $544.oo

• Water Tap fee: $222.00

• Wastewater Permit/Inspection: $296.00

• Wastewater Tap fee: $201.00

• Plant Investment fee, Water: $10,602.00

• Plant Investment fee, Wastewater: $4,136.00

• Plant Investment fee, Stormwater: $5,603.00

• Grand Total: $70,306.00

For a more complete listing of the City of Boulder’s taxes and fees on building permits, go to: https://bouldercolorado.gov/plan-develop/fees-and-taxes

Permitting costs in other municipalities vary widely, certainly from small rural towns to larger cities. And I know that many cities and towns, during the recession and as impetus to create jobs, had temporarily suspended permitting fees.

Growth Management

This permitting cost total is approximately 6% of the hard construction cost and you will notice that the single largest item, the Growth Management Allocation, is alone $26K.  Pretty effective growth management I would say, not dissimilar to a country club where the buy-in cost is enough to keep out the riff-raff.

In general I rarely work for large developers and for my projects, for individual families, this cost is staggering.  The high cost of entry into the Boulder market has lead most development in the direction of large, expensive speculative projects that can effectively recoup some of those fees in a way that smaller, more moderately priced projects can not.  Most Boulderites lament the few large houses that do get built, but they have created a system that nothing small and modest can be built as an alternative.

don’t get me started on increasingly restrictive zoning and building permit moratoriums as growth restriction techniques…

The Last Word

So, what does it cost to build in Boulder? Well, clearly it depends on what you build, the complication of the project, the level finishes, etc. Right now, in February of 2019, a good rule of thumb is that a major renovation and addition project starts around $180/sf and goes up from there. Doing extensive work like completely gutting the existing building, obviously costs more than just cosmetic changes of plumbing fixtures and paint. Keep in mind, this is the construction cost, not the project cost. For the project cost, add another 20-40% for architect and engineering fees, surveys, contractor profit and overhead, supervision, etc.

dont be fooled…

I know that sounds like a lot. And I know there are a lot of contractors out there that will tell you they can do it for half that cost. They can’t, and you won’t find that out until well into construction when that kind of surprise isn’t just disappointing, its devastating.

So, before you start down the road on any project, talk with local pros that have recently completed projects that are akin to yours - size, finishes, timing, etc. Anything else is as worthless as internet cost construction data.