The cost of building

spreadsheet

Housing construction has been in the dumps in the last few years.  This means that not only the large, market developer home builders are out of work, but so are the small general contractors and all the associated trades - plumbers, carpenters, electricians, etc.  Things are pretty dire but they do seem to be picking up a bit as of late.

Not that you would know that here in Boulder.  Our fair city is such an insulated bubble of wealth that regardless of the current economic situation, the dominant paradigm is still to place as many roadblocks to development as possible.  There seems to be an attitude here that any development at all, even small, carefully sensitive growth, will destroy the high quality of life that is so prized.  You may not have much sympathy for wealthy Boulderites looking to build multi-million dollar homes, but remember that most of the money that is expended on that kind of a project stays here in the region in the pockets of tradespeople.

The dominant anti-growth agenda is of course reflected in the permitting and review process.  The folks in the various City departments are all doing their jobs administering the code to the best of their ability but the extraordinarily high cost of a permit is the most transparent indication of this anti-growth agenda.  If you aren't particularly welcoming to new construction what better way to demonstrate that than to set the fees for building permit at an astronomical cost.

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 current projects:

• Building Permit fee: $3,439.oo

• 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

I don't know what permitting costs are in other places.  I do know that it varies widely from small rural towns to larger cities.  I even know that many cities and towns, in the light of the recession and as impetus to create jobs, have temporarily suspended permitting fees.

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.

Fortunately there is still work being built in Boulder and of course I am part of that process in a very small way.  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.

navigating bureaucratic waters

In case you had any doubt about the role of the architect and how that has changed over time, below is a partial list of the items turned in for a building permit for a recent project: the drawings

Plumbing Fixture Count Form

Greenpoints Application

HERS report (Home Energy Rating System)

ACCA Manual J & D (for proper HVAC duct sizing)

Solar Shadow Analysis

Bulk Plane compliance information

Floor Area & Building Coverage Worksheet

Lot Area Declaration Form

Landscape Plan

Demolition Plans

Soils Report

Engineered Trusses manufacturer's drawings and information

Stormwater & Flood Management Plant Investment Fee Calculation Form

IECC Code Compliance

Growth Management Allocation/Compliance with inclusionary zoning

Development Excise Tax Form

Impact Fee Form

Existing PUD Approvals (Planned Unit Development or platted suburb)

Floodplain/Wetland Development Permit

Steep Slope/Geological Constraint Information

and finally the Building Permit Application

(this amounted to 58 pages not including the drawings)

Needless to say, the drawings represent the design of the project and, with some additional information, will be used to create a Construction Set that will guide the making of the building.  Everything else is the result of good intentions exercised as bureaucracy.  I'm not necessarily opposed to completing all these forms and checklists, but love of this kind of administration is not why I went to architecture school.

All of these submittals certainly do constrain the worst projects from getting built, but not the ugliest or most insensitive.  Unfortunately the worse actors in the residential building game, the bottom-line house speculators, have so dumbed down the making of buildings that the planning and building departments feel they need to babysit every project and try to ferret out the misrepresentations and outright lies embedded in a set of crappy drawings.  It never occurs to code officials that the work that I and many other architects do, is of a higher quality than they can imagine.  Unfortunately, getting there includes more hoop-jumping every year and makes a disincentive for truly imaginative and unconventional work.

In some places, like Chicago, registered, licensed architects, upon passing additional tests and with extensive experience, call self-certify that a single family house meets all codes and will be a safe and efficient dwelling at the very least.  The code officials don't have to act as policing agents for these professionals and it is reassuring that the state that grants us a license to practice actually recognizes that this license actually means something.  That program is not in place here in Colorado and all of our projects and work, and by extension our experience and very selves,  will have to continue to be scrutinized and examined like disobedient schoolboys.

(sorry for the rant. I usually try not to infect the website and blog with these thoughts, but this is really getting a bit out of hand.)

what a house should be - part two - it should be affordable

Every project has a budget.  Whether it is a grand country house or a humble pop-top, the cost of the construction will always be stressed.  It should be. In the design process, there are loads of options that are considered and balanced.  But there is nothing quite so focused as the discipline brought to a project by an initial cost meeting with a contractor's exhaustive bid that is over budget.  But there is also usually no way for an architect to truly gauge the deep-seated priorities of a client until each of those priorities have a price tag.  A beautiful greenhouse is fantastic, but is it $50K fantastic?

It is extremely rare; rainbow-spotted unicorn-rare, that a client's budget exceeds their expectations.

There are a number of ways of establishing a budget and the realistic expectations to which it is linked:

An architect can do a cost estimate and design within that estimate.  Architect's are notoriously bad at this if they do it at all.  We want to please, we want to think we can fit 20 gallons in a ten-gallon hat.  The architect's budget can be based on a basic cost/square foot or can be more sophisticated breaking down the building into constituent parts and assigning differing costs to each.  The architect should do this before they sketch the first line or soon thereafter.  And at every phase of the project, the architect should update that cost estimate as more specificity is brought to bear on the project.

A builder can do a cost estimate. Homeowners can bring a builder on at the start of a project and the builder and architect can work hand-in-hand to simultaneously design the project and verify costs.  Many builders like this idea because they don't have to take the risk of competitively bidding a project.  However, most contractors are not very good at putting increasingly specific numbers to the rather vague initial sketches of an architect.  Very often builders say they need a complete set of drawings to work up an accurate price.  If that is the case then we might as well bid the project.  A contractor brought on during design should have enough experience and data from past projects to be able to make fair assumptions of cost.  Like the architect's estimate, the builder's budget will get increasing specific and hopefully more accurate as the design progresses.  No excuses for saying "we didn't have enough information" or "the architect added a bunch of stuff that wasn't in the early sketches".

An owner can do a cost estimate.  The quality of this estimate will vary greatly depending on the sources of info as well as the sophistication of the person assembling it.  Most dubious are the cost/sf numbers listed on the internet for new construction.  That information was free and probably not reflective of the region or date or style or ...  The owners budget is more like a vague idea of how important something on a project is to them.  Not absolutely everything in the dreams of the owner and architect will end up in the project.  The owner needs to know what is important to them and why and be able to communicate that to the team.

The best answer is:  all of the above.  The relationship between owner, architect and builder is best carried forth if everyone does their part to keep a discipline on the budget.  For an architect that means not adding in expensive details or assemblies without discussing them with all parties and knowing what everything on the job costs in relative terms.  For a builder that is not selling a client on an all-too-rosy scenario of an unrealistic budget to get a project only to have the reality of costs slam down at a later date.  For an owner, clearly communicating their desires as to materials and details early in the process is the best way to insure that costly change orders don't uncomfortably arrive during construction.

The building of a custom house is an exciting and thrilling prospect.  But there are too many stories of cost overruns and bottomless monetary pits.  Every project has a budget and every budget will be stressed.  If everyone does their part honestly and with diligence, that stress won't break the project.  "Affordable" is relative, different on every project, but we all ought to know it when we see it.