How construction costs have been impacted in the most recent years?
Being in the construction business for so long. It is incredible all the factors that play a roll in the fast rise of construction costs in recent years. In the last 3-4 years Labor and materials costs have risen approximately 20% annually. This means that in this lapse of time to present we have experienced a cost increase of about 60% It is bad enough the increase in labor and materials. To this trend we need to add the additional expenses of higher costs of Liability & Workmen's Compensation Insurance. The worse within this categories being Worker's Compensation Insurance, typically just about every quarter they have increases for higher premiums within each and every construction industry trade. It does not matter that we have never had any reason to file any claims against the insurance carriers, we are charged rates across the board. Architectural & Structural design have their own share in higher construction costs. Particularly Structural design, most often than not all projects are not only designed to follow the strict California Building Codes, but most Structural Engineers tend to over design ("Just to be safe") adding a tremendous costs over runs to the already costly construction projects. Last but not least, the Cities, Towns, Counties Building Departments have their own agenda in contributing to this higher costs. Plan Check & Building permit fees are pretty high already and constantly being increased with total disregards to the home owner/tax payer financial burden. This agencies at the same time, think nothing even after the Building Permit have been issued. to add additional Building Codes compliance, this often happens at addendum submittal to the Building Permit for changes to original plans. This higher costs have a tremendous negative impact. Forces the home owner to find & hire unlicensed and uninsured individuals to do their work. This is a very high risk the consumers are willing to take and it is not the best or right approach. Unfortunately, I see no end in sight to this trend , all we can expect are future higher costs
Does Project Location, Impacts Estimate Price?
This is not an unusual question from consumers. Thinking that the location of their project will affect our estimate pricing. Perhaps to some others; this will be items to consider? I always tell and reassure our future clients: Our estimating method has never or will ever be determined by: 1) Geographical Location. 2) Professional and or financial status. 3) Ethnicity. i.e. The job will cost the same, regardless of the above! Our method is based solely, on the project own merit! e.g. Estimate considering all components, materials and labor costs, site accessibility for materials and equipment, etc., etc.
Occupied Home, Remodeling Costs to Consider!
To keep remodeling costs contained to remodeling only: Having a major remodeling project done; the most reliable to keep cost down is to vacate the premises and render the areas clear giving us free reign of movement in to which accomplish our work. Sometimes due to owner's decision not to move and or empty the work areas. Will results in higher remodeling costs, why? Simply due to major factors impacting our labor costs. 1) Occupied home and totally furnished. 2) Artwork on walls. 3) Sculptures, Statues, Vases, Area Rugs. 4) Pianos and or Antiques. 5) Household Furnishings. Lacking the expertise and equipment to move, relocate, protect and store all of the above and the some! Our work becomes very laborious, time consuming and very stressful. Should any item gets damaged or broken; would need to be replaced, sometimes being irreplaceable in the case of antiquities. This of course, increases our labor costs and needs to be incorporated into our estimate. This makes the estimate to rise sometimes astronomically, making us lose the job and only given us the opportunity to exercise our estimating skills. Undoubtedly, the owners will always be able to find someone, willing to take on the job risking the consequences, due to lack of knowledge or experience. To keep costs down, either hire a moving company, to move, relocate and or store all the items, or move them yourself! And, Remember! consider carefully, whom you are willing to entrust your project to?
Why?, such a great difference in Estimated Costs?
Through out my many years in the Construction field. I have also asked the same consumer question. My experience has taught me the following. There are different ways to estimate a job be it large or small.
Major Problem: Insufficient and/or lack thereof complete Specifications lists prepared by Architect/Designer and or Home Owner. There are no guidelines which every contractor involved in bidding must adhere and follow. This laxity in specs. creates a very deceiving estimates, why? basically, there is no way that the owner can discern a complete and bottom line estimate. As the old adage goes "Can't compare apples toapples" if you will! Risk Involved? Change orders! Change orders! as the job progresses. By the time the consumer realizes this problem, it's too late to repair, doesn't matter at what cost the job must continue to completion.
Here will examine the following methods:
1) Estimate the job on a ambiguous and superfluous manner. Since nothing is per specs., and we don't know if we are being used to shop the other guy? We'll try to guess what the owner's desires, wants, needs, or means? Of course we'll use the most inexpensive components and leave out many areas that will be claimed as not included, to arrive with a low estimate and get the job! We know once we are in, we can do pretty much what we want; as far of change orders. Most likely we'll be making a very handsome profit; from our low bid! Object of this method? Get the Job!, Get the Job!! Get the Job!!! No matter what?
2) We always ask the home owner, how they want us to figure the job? by method number one. Or they would much rather have us include everything that we know from experience the job could possibly need to be performed with the highest quality of materials and workmanship. Even though there no guidelines! To arrive at a true bottom line number and generate no change orders, what so ever? Provided there are no significant deviation from the plans given to us for estimating and or changes made & required by the Building Dept. once the plans are approved for construction. Method number (2) is the most surely 110% will lose the job and our time, unless the consumer can understand totally the risk involved with method number (1) and the consumer is completely quality oriented, and they want the very best; to enjoy and protect the biggest investment of one's lifetime.
3) Always! have the Architect/Designer/Home owner. Prepare a complete set of plans and just as important or more so; a full and comprehensive set of specifications to which every bidder must follow with out any substitution what so ever during the estimating phase. This could be the most and only way to compare one bid against the other. Not a sure thing? As always! with anything in life; there could be exceptions!
I find that with out a specification list, using method number (2) I'm constantly calling the client, to clarify and verify areas of obscurity to arrive at their true bottom line costs, when so, desired! Clients may think we are not sure of what we are doing? but questions must be asked to arrive at the desired end result, a True Costs Numbers
Definitely!, none of this methods are ever disclosed to the consumer. However, I find it necessary and more like a duty to make the consumer aware of this issues. I feel strongly about consumer advocacy, my foremost loyalty lies with the client only!
Why Additions/Remodels are so Costly?
Being in the construction business for 40 plus years, I have seen the many changes in the construction industry, throughout each and every single year! The high costs of additions & remodels begins in a certain sequence of events. 1) Project planning and design i.e. Full Architectural, Structural drawings for submittal and approvals to the City/Town Building Department. Where this plans need to go through the city plan check review & approval, before they are sent to the Building Dept. Division. Some cities require Architectural Review approval, before the plans can be sent to the city plan check for review. 2) Most often than not, the plans are returned and must be sent to the Architect/Structural Engineer for revisions that the Building Dept. requires for code compliance, due to Code Amendments or new city regulations. Once this obstacles are completed, we are ready to proceed with the actual construction. 3) One of the determined high cost of actual construction have been dictated by the approved plans. What are those? Simply, Regulations, regulations and more regulations! Imposed and enforced by the city and or county. Most of this regulations, have to do with public safety as a whole! 4) Due to the fact that in CA we live in Earthquake prone areas, regulations for foundations, walls, roof etc, etc, must follow strict structural guidelines for construction. 5) After the Loma Prieta earthquake in 1988 California developed their own Building Code Standards named "California Building Code" now we not only need to adhere to the standards of the Uniform Building Code, but must follow the stricter California Code Standards. Meeting with this strict code standards takes a great amount of time and expertise to perform. 6) We are also heavily burdened by the environmental agencies standards. To meet their specific standards, gets very costly. Here are just some examples: In winter erosion control, most cities have a moratorium; which does not allow any grading, excavations or any type of soil movement beginning in the month of October. The exact month and dates vary from city to city. If we do; we must maintain a complete and total erosion control during the winter months. 7) Last but not least, County and or city environmental regulations also come into play. We are mandated to recycle and or salvage all debris generated by the construction project. Before the Building permit is issued, some cities require a hefty deposit to ensure the home owner or contractor complies with this regulations. This deposit, is refund able once the job has been through final inspection and recycle tickets are submitted as proof of compliance. By now, I believe you got the basic and general idea of the costs involved and what we are dealing with! The other cost involved are Labor and materials cost. We will discuss those in our next write up update.
Construction Project! Where does one start?
When thinking about any given construction project, be it a Room addition, remodel and or building a new home. Most consumers are baffled as to where and how to start? In my experience the sequence should be: 1) Choose your Builder/Contractor,first! 2) Choose your Architect /Designer.
I always suggest the owner selects his/her Contractor that they will be working with from project start to completion. Why? simply the Contractor can guide the owner before the design phase, discuss needs, wants, goals, expectations, budget, etc. A well seasoned and experienced contractor can guide the owner's away from areas than are costly to build, helping them to stay within their proposed budget.
Select you Architect/Designer creating a team: Contractor,Owner, Architect is a very good approach in reaching an expected design. They can work hand in hand in the design phase.
Most often than not, when we are called in for estimating, the design has been completed and perhaps already submitted for Building Permit review and approval. In which case, is a little too late. Any deviation from the plans submitted; due to building costs, will have to be revised and presented to the city. Therefore creating unnecessary delays and added expense to the design phase.
Hire your Architect not only for the design but also for up to building permit submittal. The Architect is very familiar with how the system works and can get the approvals for construction. If revisions to plans or any other missing document is required, the Arch. will need to provide to the Building official.
If Owner's desires, they can do the Building Permit Application and submittal. However, is not something to consider or I recommend. The process can be time consuming and frustrating to the person unfamiliar to the cities/counties requirements and demands.
Remember a complete submittal package must include many documents other than the Project plans some of this may not apply to a particular project, some will apply to New Home Construction only, but it's worth of mention! Some minor interior remodeling may not qualify. Depending on the scope, projects will require: Survey/Plot/Site plan. Geological/Soils report. Laboratory samples/tests. Percolations Tests (In the case of Septic Tank) Water Quality Test ( In case of water well) Architectural Plans/Design Structural Calculations Energy Conservation Calculations (Title24) Just to mention a few. This gives you an insight which are the first steps to consider.