One of the most common questions we are asked is how much does it cost to build a custom designed home? While the numbers can vary widely based on the type of construction and level of finish, the reality is that building comes with a cost. Add in that the homes we design are customized for your personal needs and wants as well as the building sites features, orientation, climate and topography, there is a premium to build a custom designed home.
There is no doubt that the economic expansion since the 2008 recession has been at a heightened pace the last few years. Construction costs over the last two years alone have escalated significantly and this is due to a number of factors. Construction material tariffs and trade disagreements in between Canada and the USA, tariffs on foreign steel, an increase in labour costs due to demand, increased municipal permitting requirements, and overall property value speculation have all led to added construction costs. It is impossible to know what will happen next in the overall economy but for the time being we are seeing the following average cost of construction throughout the interior of British Columbia.
Living Space Only
$200/SF +/-$50/SF Full Scale Remodel/Retrofit
$225/SF +/-$50/SF Minimum Code Construction
$300/SF +/-$50/SF Passive House / Net-Zero / Positive Construction
$400/SF & Beyond Luxury Estate Homes
The above values are based on a serviced lot (municipal water, power, sewer, telephone, cable) that is generally flat and does not include garages, patios, balconies, landscaping, appliances, pools and hot tubs. Additional items can include hazardous material removal and demolition of existing structures, septic fields, water wells, solar panels, etc.
It should be noted that to achieve absolute perfection 30-40% should be added to the above numbers. Custom homes consist of literally well over a million individual parts and pieces assembled by many different parties and so to expect absolute perfection is likely going to end up in frustration. We expect great workmanship and attention to detail on our projects but recognize that perfection is rarely ever achieved without significant additional costs.
Major Items that Increase Cost
Site Topography
The cost to build on a flat lot is significantly less expensive than a sloping lot. Hillside lots require more general site preparation, excavation, retaining walls and taller foundation walls.
Roof Style
Asphalt shingles are by far the least expensive roof to construct however they can ony be used on roofs with a slope of 2:12 with the addition of an extra underlayment. To avoid the underlayment the slope must be a minimum of 3:12 and up. Flat roofs require a different type of roofing membrane, drainage solutions, parapet cap flashings and potentially even additional structural requirements. Metal Roofs are by far our favorite roofs in terms of aesthetics, recyclability of the steel in production and at end of life, and 50+ year durability however they come with a considerable added cost.
Building Department Regulations
The approvals process at municipal building departments is becoming more and more challenging which adds both time and cost. If lucky, the minimum requirement for a single family home is a simple Building Permit however we often have to jump through additional approvals including Development Permits or Re-Zoning applications which have to be applied and approved in advance of applying for a Building Permit. Development Permits are triggered when the proposed project has an item that does not meet the Zoning Bylaw requirements or when the property is considered within a Farm Protection Area, Floodplain, Hazardous Condition, Hillside, Natural Environment, Revitalization, Sensitive Infill Housing, Wildland Fire Hazard, etc. Generally, these applications add at minimum three months to the approvals process as there are typically three hearings required by City Council and a public consultation and hearing process.
Rural properties in British Columbia in particular can also be subject to ALC (Agricultural Land Commission) approvals and it is impossible to estimate how long this approval process can take as it seems to be a moving target on every project.
As you can see, every project is different and every single City, Town, Municipality and Regional District has a different set of Zoning Bylaws and Development requirements so this is why part of the NIDO Residential Design Process includes a Pre-Design phase to effectively determine all of the requirements before ever putting a pen to paper on the actual design of the home.
Retaining Walls
Every individual municipalities requirements are different but the most surprising example we've seen to date is in the City of Kelowna where any retaining wall over 4'-0" in exposed height not only requires structural and geotechnical engineering but any wall above this height triggers a Development Variance Permit! Add three months! This one is honestly infuriating considering there is zero liability placed on the municipality once the structural and geotechnical engineers take responsibility for the design of these walls.
BC Energy Step Code Energy Performance Modeling (Not required yet but coming very soon!) Fortunately, due to the type of projects NIDO specializes in being Passive House, Net-Zero, Net-Positive and Living Building Challenge projects, all of our projects are energy modeled and often achieve the highest level of performance (Step 5). By pursuing Step 5, we avoid the added step of having to energy model the house twice as Steps 1-4 require both the proposed home and a reference house be modeled for comparison purposes. We believe that energy model should be a minimum requirement of every project, therefore we do not view this as an added cost in that you will see substantial savings on your monthly utility bills, have a much more comfortable home, and durable structure which requires fewer repairs than the current building stock.
Wants vs Needs
At the start of the design process, this is the time to dream and we encourage this as it opens up a world of possibilities and discovery. However, our Residential Design Process intends to define needs vs. wants as it relates to your budget. Everything has a cost and we do our best to make note of items that will stretch the budget but we often see clients still adding more. The point here is, take the time to define what you need vs. what you want as the entire experience will be that much more enjoyable. Building a home should be a positive and inspiring experience, know that the home will be amazing regardless if it has the third of that, and the second of this! Breathe...everything will be just fine...remember how lucky you are to have these "problems" ... ☺️
Unrealistic Expectations
After years of experience we have seen it all, the optimists, the "I'll take care of that portion of the work", the "my buddy will give us a great deal" and finally, the "well I know a guy who built for $X/SF". We've come to believe that this is just human nature and it is entirely understandable but keep in mind that a lot of clients are often working full time jobs and may not have as much time as anticipated to do self-build work, when getting a buddy deal $500-$1,000 savings on a few items is often a drop in the bucket of the larger budget, and finally if using a previous example be sure that it is an apples to apples comparison within a relevant time frame comparison and a comparable geographic labour market.
Size of Project
500 sf x $250/sf = $125,000 in construction costs. The point here is, every square foot adds up. We firmly believe in quality over quantity and this is evident throughout our work.
A Note on Prefabricated Structures
We love prefab! One more time, we love prefab! There are so many advantages to prefab but the one item to consider is that it may present a financing challenge for some. Banks unfortunately do not recognize that prefabricated structures significantly reduce their risk however, because the entire industry has been set up for site built construction, banks will not provide a construction loan in advance of site preparation work. Prefabrication often starts well before site prep so that when the site is being prepped and foundations poured, the prefabricated shell shows up roughly 7-10 days after the concrete has been poured. This is a major construction time savings however you should be aware that the prefabrication company will likely require +/-50% deposit on the total package well before the bank will release the construction financing.
A Breakdown of Construction Costs
There are many factors to take into consideration but to start you have to consider the two major categories: Soft Costs and Hard Costs. Soft Costs are generally the upfront costs whereas Hard Costs are labour and materials needed for the actual construction process. Please keep in mind that this is a general guide of the most common categories but not necessarily every single item is listed as every project is unique.
Soft Costs
Land Cost - Refer to Site Servicing below
Real Estate Commission - Related to the purchase of the land
Legal Costs - Related to the purchase of the land. In terms of the construction contract with the Builder, we recommend using a CCDC Contract (Canadian Construction Documents Committee) which are time tested and industry standard. It is the responsibility of the Builder to fill out the Contract however additional legal costs may be incurred if you require a lawyer to review the contract prior to signing. Fortunately, CCDC contracts are extremely well defined so these costs can be avoided.
Site Servicing - Serviced lots include municipal water, sewer, power, gas, telephone/cable connections whereas raw land or un-serviced lots will require either municipal services to be connected or if rural or remote lots, water wells, septic fields, etc. may need to be installed.
Permits - Building Permits, Pool Permits, Development Permits, Development Variance Permits, and Re-Zoning Applications
Home Design - Drawings, Specifications, Coordination of Consultants, Construction Observation and Administration throughout Design and Construction
Energy Modeling - Optimizing the for Performance, Comfort and Durability
Engineering Consultants - Typical single family home projects require Structural and Geotechnical engineering but can also include Mechanical, Electrical, Interior Design, Civil, Landscape, etc.
Land Survey - Property line and topographical/geodetic information
Demolition of Existing Structures - Older homes and buildings often contain asbestos, lead paint and other toxic substances that must be assessed and documented in a Hazardous Materials Report prior to demolition. If hazardous materials are found, and they often are, average demolition costs for existing homes have been around $20,000 - $50,000 on average. Each project must be assessed on an individual basis and can vary significantly depending on the size of the existing structure, extent of hazardous materials, and disposal fees.
Temporary Utilities - Temporary electric power is typical required throughout construction. Additional costs may be incurred if concrete is poured in the winter months as it must be heated and hoarded to ensure the concrete cures. The typical cut off date for pouring concrete in the winter is generally November 15th through to early March however this varies significantly from year to year. In fact, this year, 2019, we had projects pouring concrete in January due to the unseasonably mild month.
Construction Loan - Bank financing is subject to interest.
Contingency - We recommend 10% of the the total construction budget for unforeseen items largely related to site prep and ground works as the cost to prep and/or modify the soils beneath a building is always the most challenging item to quantify until the excavators are on site, the hole for the foundations are dug which allows the geotechnical engineer to review the existing soils to determine if there is suitable bearing capacity to hold the weight of the structure. The contingency can also include changes and additions throughout construction.
Home Warranty - New homes built in B.C. by licensed residential builders must be covered by mandatory, third-party home warranty insurance. At a minimum, home warranty insurance coverage includes 2 years on labour and materials (some limits apply), 5 years on the building envelope, including water penetration, and 10 years on the structure of the home. For more information please visit BC Housing.
Printing and Courier Costs - Printing of plans, drawings and specifications
Course of Construction Insurance - Insures the building against physical loss or damage while it is being built or renovated.
Hard Costs
General Labour
Structural Fill
Trucking Sand & Gravel
Earthwork
Footings
Forming Materials
Concrete Pump
Reinforcing Steel
Foundation Concrete
Surface Concrete - patios, driveways, sidewalks, pool decks, etc.
Damproofing
Building Services - electrical, gas, water, sewer, septic field, etc.
Floor System - typical engineered wood I-joist or suspended concrete slab
Framing Material & Labour
Roof Trusses
Roofing - Asphalt Shingles ($), Flat Roof SBS Roof Membrane ($$), Metal Roof ($$$$)
Exterior Doors & Windows - uPVC ($), Fibreglass ($+), Wood ($$), Aluminum Clad Wood ($$$)
Plumbing
Heating
Fireplalce
Electrical
Built in Vacuum - we are big fans of the robot vacuums rather than dedicated built in systems
Security Systems
Detail Framing
Insulation
Drywall
Garage Door & Openers
Finish Carpentry - baseboards, door casing, window sills, custom millwork, etc.
Interior Doors
Interior Railings & Spindles
Painting
Floor and Wall Tile
Cabinets
Countertops
Flooring
Hardware - Kitchen Cabinets, Interior Doors
Shower Doors - Tempered Glass
Closet Systems
Mirrors
Light Fixtures
Appliances
Exterior Carpentry
Masonry / Interior Facings
Exterior Cladding / Siding - Fibre Cement, Wood, Brick, Stucco, Stone, Metal
Decking & Stairs - Wood, Composite, Tile, Vinyl Membrane
Exterior Railings - Glass, Wire Cable, Wood, Steel, Aluminum
Foundation Plaster
Garbage Removal
Rentals
Landscaping
Fencing - privacy and for some projects, temporary security fencing
Cleaning
Pools & Spa
Snow Removal
Builders Fee - including Supervision and Site Safety
Taxes
New Custom Designed Home Construction Cost Summary
Building a custom designed home is often the largest purchase in one's life. From day one of the process, we work to advise you on potential construction costs but we also believe that involving your builder early on in the design process is also very valuable as they know the local market, trade availability and typical construction costs specific to your location.
As a cost conscious design office, we treat each and every project like it were our own home and dollars on the line. We feel a huge sense of responsibility in that you are putting your trust in us to guide you throughout the process and we don't take that responsibility lightly. When we feel that the budget is at risk, we are not shy to tell you.
Be realistic, determine what is most important to you and stick to it.
Lastly, we've been wanting to write this blog post for quite some time and in researching how to present it we have to recognize Build LLC located in Seattle Washington. Build is a group of Architects & Designers who do amazing work and have an excellent blog with years of helpful posts. In particular, the idea of the Construction Budget Cheat Sheet was theirs and we have adjusted it to reflect the Interior of British Columbia construction market. Thanks Build! http://blog.buildllc.com/
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