Construction costs are on the rise. In just four short years they have increased 20% and are continuing to escalate. Pinnacle’s President, Peter Baer, teamed with Vice President of R&H Construction, Gary North, to brainstorm 10 ways to save money in design and construction in this volatile climate. They presented their list at the Oregon Opportunity Network Fall Industry Conference in September to numerous Oregon affordable housing developers and service providers. Here Peter shares the cliff notes…
#1 Cost versus Value
It’s important to think about cost versus value. The lowest price isn’t always the most valuable in the long-term. More than 70% of a building’s cost is operational (maintenance, repairs, etc.) compared to the 20+% that is design fees and construction. Bring your design and construction team in early and challenge them to evaluate lifecycle costs of your decisions. Investing in the project on the front end will reap rewards over the life of the building.
#2: Team Collaboration
The sooner the design and construction team can work together, the more successful the design and the more opportunities for cost savings. The decisions you make at the beginning of a project will save you the most money! When you wait to make decisions, the cost of changes increases dramatically. Per a study by Penn State comparing design-build with the traditional design-bid-build process, the unit cost is 6% less and delivery speed is 33% faster for a design-build project.
Source: Kevin Berardinelliin Project Management
#3: Select the Right Site
Free or cheap isn’t always a good thing! Ask your architect, contractor, and engineering team to do a review of a site before purchasing land or accepting a gift of land. For example, one of our clients was gifted a piece of land that was an old timber mill. We designed the project and during that time a geo-technical report was completed. Turns out there was 12 feet of timber shavings and then a water table. It was unbuildable. Also consider renovating instead of building new. An old school or public building could make a unique housing complex.
#4 Efficiency in Design
Efficiency can mean something different to various people. Reducing square footage and costs while keeping units comfortable to live is our philosophy. Here are some ideas for efficiency in design:
1. Place windows on both sides of units to bring in more light. Makes units feel larger and cross ventilation can reduce heating/cooling costs.
2. Incorporate L and U shaped kitchens which are more space efficient than galley kitchens to save on square footage.
3. Minimize stairways and hallways to save on square footage.
4. Simplify building shapes for less expensive construction but add layers with decks and overhangs to create an appealing design.
#5 Value of Modules
Modular construction is the process of constructing a building or portions of a building (i.e. modular wall systems) off-site in a controlled environment. There are many cost savings benefits including spending less on prevailing wage, increasing productivity by not having any slowdowns due to weather, and less waste resulting in saving on purchasing materials. This requires extremely good planning and organization to successfully use modular construction in a project. The contractor must communicate with the design team, including architects and engineers, to make sure everything is documented properly so the modular units are built correctly.
#6 Repeatable Plans
Single family subdivisions do this successfully (some more than others!). One floorplan can have a variety of building facades with different materials, colors, etc. Reusing an efficient multifamily floorplan, customizing the exterior, and making site adjustments could save a project 40% in design and documents.
#7 Durability and Flexibility
Choosing durable materials and being flexible with substitutions can lead to cost savings. Source with local vendors to save on shipping costs and use locally available and easy to repair equipment, fixtures, and finishes to save money in long-term maintenance. Watch out for any special-order items. Ensure proper instillation and documentation of equipment to maintain warranties. Question your design and construction team on what’s worked best on their past projects. During the presentation, we had a good discussion on flooring options…carpet versus vinyl.
#8 Sustainability and Incentives
At least 60% of sustainable design is good standard practice – building orientation, natural ventilation, energy efficient appliances/lighting, etc. When beginning a project, have a good understanding of your goals for sustainability. Do you want to get a certified? Do you want to save money on operations and maintenance? Analyzing the lifecycle cost is an important step. Consider your local programs (Energy Star, Energy Trust, Earth Advantage, Utility Companies, etc.) to take advantage of tax savings and energy credits to reap short-term paybacks and long-term savings.
#9 Apply Lessons Learned
Continual improvement is a very important aspect to saving money in design and construction. Conducting a project close out meeting with the entire project team from owner to contractor is a valuable way to capture lessons learned on a project. During the meeting review change orders, talk about the communication throughout the project, and document it for your records. This will build a stronger relationship with the team and help save money on future projects.
#10 Think Outside the Box
We’ve become very narrow in our comfort zone and what acceptable housing is today. The average size of a home in the U.S. has increased 75% over the last 40 years. Today the average home is 2,690 SF, most European countries are half of that. Changing our expectations and perceptions of housing is part of thinking outside of the box. Here are some ideas – big and small – from abroad.
• Micro apartments and tiny homes
• Units with shared kitchens
• Modular units placed on top of existing buildings
• Cargo containers reused for housing
• Closets with open shelving instead of doors
• Use OSB subfloors, sanded and finished, as the final floors (see image below)
• Movable structures for flexibility (see image below)
© All I own House, Madrid – PKMN Architectures
The best way to save money on a project is to bring the design and construction team together early, spend adequate time in the pre-design/pre-construction stage making important decisions, and question cost saving alternatives throughout the project. Have a question? Ask us now!