Re: Cost estimates
From: Kristen Simmons (simmonskristengmail.com)
Date: Sun, 14 Feb 2010 10:30:56 -0800 (PST)
<snip>
Have I gotten the wrong impression of the building process in
general? Why does it appear to be so difficult to stay within a
budget? What usually delays construction for 6 months to a year?
That's an awful lot of 'flexibility' money and time for a family or
individual to take on, especially now with jobs and the economy the
way it is.

Has there been any cohousing projects that have successfully come in
on time and within budget? Is my concept of how planning and
construction works totally up-side-down?

-------------------------

In response to your questions, I'm putting on my architect hat. :-) I’ll
just speak to larger projects, not single family homes and/or the lot
development, since that’s not my experience.


In my experience, most building projects, including housing, do NOT exceed
project and/or schedule, once the contractor has been awarded the project. A
good architect, project manager, and/or developer are worth their weight in
gold, for both experienced and inexperienced clients. These are the folks
working with the group long before the contractor comes on board. Part of
what good architects, project managers, and/or developers do is to help
their client to manage risk. Both cost over runs and schedule delay (which
has cost implications) are the risks that all clients want to avoid.
Accurately managing these risks is why lots of people make money in real
estate development.



What makes your question tricky to answer is that I don’t know what
assumptions you are making. In the early stages of a project, the cohousing
group might not have reasonable expectations of their project budget and
schedule. Everything is a big unknown, like how much will the site cost,
will there be zoning and/or permitting issues, how long will it take to
complete design and construction drawings? There are too many unknowns to
accurately estimate anything, frankly.



I would say that the project doesn’t become “real” until the group has a
site. Of course, the group (mostly burning souls) will be working very hard
(and spending money) before that happens.



Beginning at site acquisition and continuing until the construction bids are
in, the overall project budget is being constantly revised by the project
manager and/or developer. Initially, cost assumptions are made based on
previous experience. Ideally, the assumptions will be conservative, but not
too conservative, and the person working on the budget will have significant
experience in that project type and location.



During the design phase, the project budget becomes more and more accurate,
as assumptions are gradually replaced real data. The actual construction
cost will not be known until bids are in from the contractors, and
negotiations have been completed with the contractor who has been awarded
the project. Of course, unit costs are based on the overall project costs;
construction costs are just one component.



The wise project manager/developer ALWAYS includes cost contingencies in
their budget. Include both a 5-10% construction contingency of construction
costs, for the unexpected stuff during construction, and a 5% design
contingency, for changes that the client/owner want to make during
construction. Both will happen, I promise. If you budget for this, but don’t
use it, great! It’s your money and you can reduce the unit costs in the end,
buy furniture, or whatever. If you don’t budget for this, folks will be
justifiably upset when they have to come up with an additional $5,000 each
to relocate a water main connection, for example, which was wrongly
identified on civil drawings provided by the town. (Yep, the town made a
mistake, but the owner pays the cost.) Inexperienced clients often do not
budget for contingencies, despite the recommendations of the consultants
they have hired. BIG MISTAKE.



There’s lots of information out there on this. I think that Katy McCamant
did a talk available on CD on this subject, and Chris ScottHansen has a nice
section on this in his book.



Regards,

Kristen Simmons, AIA, LEED AP



www.stonybrookcohousing.org

On twitter at bostoncohousing





<snip>
Have I gotten the wrong impression of the building process in
general? Why does it appear to be so difficult to stay within a
budget? What usually delays construction for 6 months to a year?
That's an awful lot of 'flexibility' money and time for a family or
individual to take on, especially now with jobs and the economy the
way it is.

Has there been any cohousing projects that have successfully come in
on time and within budget? Is my concept of how planning and
construction works totally up-side-down?

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