Designing to Cost

Designing to cost. Staying within budget. Simple concepts, right? Not really. It takes a lot of work to bring a project in under budget. It takes even more work to do it while delivering maximum value.

Mastering the concept of designing to cost can set the stage for success. It has taken leaders of successful architecture and design/build firms many years to acquire the experience and knowledge necessary to design to cost. Here, owners of three such businesses share a few best practices with Residential Design & Build magazine.

Budget comes into play at the very beginning of every project, says Kevin Harris, chair of the AIA’s Small Project Practitioners Knowledge Community advisory group, and president, Kevin Harris Architect in Baton Rouge, La. “We respect the budget. We stay within the constraints.”

Harris knows as projects progress, homeowners become exposed to products, materials and opportunities previously unknown to them, so their world of possibilities grows. It’s important to approach the process with the mind-set of negotiating scope of work rather than price. “Being able to tell a client or owner how much a project will cost, or how much to expect to pay, is critical,” Harris adds.

Harris’ rule of thumb is to involve someone who prices supplies day in and day out. “My personal opinion is I can’t do this without involving the builder. It’s all about the costs. Not getting price feedback is where people fail because prices vary daily. Custom houses haven’t been built before, so there’s no formula to follow,” he says. “All our work is custom. As such, they’re all a prototype, so there are no estimate books or rules of thumb that apply.

So, we developed a procedure where we meet with clients, produce schematics and stop. At this point, we introduce the builder to the client, and if the project is a go, then we say to the builder, ‘Here are the plans; give us a preliminary price. Be thorough and you should be within 10 percent of the final price. Tell us all your assumptions,’” Harris says.

When costs need to be reined in, it’s time to turn to the client for honest input. The areas requiring adjustment change with every client, Harris says. For example, to some clients the red knobs on the cooktop are important, and for others, he adds, it’s the countertops, the plumbing fixtures, or the lighting that are important.

“Where architects go wrong is not listening to what the client wants. The architect is in the best position to see what the owner needs. We are trained to listen and sketch out different alternatives. We can see easily how their lifestyles would be improved with one feature or another, how it would affect them, the traffic flow, the connection with the site. You become sensitive to what might wow a client. That’s your job. In school, if you figure that out with your professor, you get an A,” Harris explains.

No Detail Too Small

Designing to cost is what it’s all about for Tony Crasi, president, Akron Home Builders Association, and owner, Crasi Co. in Cuyhoga Falls, Ohio. Setting up a budget meeting involving everyone from day one is critical to getting a realistic budget established. “Leave your egos at the door and work together,” he says.

The most important part of such a meeting is a realistic budget from the homeowner. “Tell them if they’re not being real, it will cost them money down the road. The budget for the whole project needs to be on the table. We ask clients if they’ve thought of everything because sometimes people are shortsighted. We take into account the land; we ask what site improvements need to be made, must we cut trees, things like the septic system, boring samples, soil quality, wetland mitigation issues. We cover all that,” Crasi explains.

Crasi also addresses design fees, and costs for engineering and landscaping. “People forget they must furnish the place, too, so we create allowances for that and other unforeseen issues. What if we’re drilling down and we find an old coal mine? You must think of things like this that need to be done long before you start designing anything,” he adds.

After a few months of thorough questioning and planning, clients typically aren’t going anywhere. Once Crasi has worked through the budget issues, trust is established and they probably can’t get a better price at that point, he says. “Controlling the home-owners throughout design and budgeting is a critical component of the process. They’ll always say, ‘Let’s just see,’ and that always turns into too much money,” Crasi says.

A thorough approach like this helps an architect’s cause. “You start to look like you know what you’re talking about when you approach a client like that,” Crasi says. “Now that you have a realistic number, you start to assess the client’s wish list.”

A common mistake is not knowing what it costs to build a certain style. An experienced architect can determine roughly what the cost per square foot will be. “That’s a huge thing to pay attention to. Too often, architects lose control of the client and the house gets too big. Over-design is a common problem,” he says.

“About 75 percent of the time there are a lot of little things they don’t think about. When you talk about design with your clients, you are the expert. One of my big goals is to make sure we’re viewed as the experts,” he adds.

“As the expert, when a homeowner says, for example, their home must be 8,000 sq. ft., we assess all the rooms, then we do quick furniture layouts. Adjusting room sizes very quickly gets us down to 3,500 sq. ft. and we still accomplish all they want. Then you get down to finishes, and ask if they must have mahogany, or can you do something cheaper but still keep it nice? Once you get beyond this, you start looking at details,” Crasi says. “I can show you how to do a beautiful library, but I can also show you how to do that with simple applied moulding. There are different ways of creating nice features.”

One possible reason for failure to design within budget could be the education architects receive. For the first five years in architectural school, about 99 percent of it is spent learning basic theory, Crasi explains. “Education is just the beginning. They don’t teach residential architecture in school. What you need to do is put yourself where those things are happening. Anyone going into the architecture field needs to work summers in the real world and get beat up building homes so they know how to draw things properly.”

Finalizing Realistic Goals

Balancing client goals with budgets requires a process of investigation to prequalify the client, says Jerry Gloss, AIA, principal, Knudson Gloss Architects in Boulder, Colo. Walking clients through this exhaustive process helps determine the difference between their goals and reality. “Once that’s revealed, we can finally say, ‘We think we’ll have a 3,200-sq.-ft. home with all the cool things you want.’”

The point is to establish a realistic budget. For Gloss, this means creating the most perceived value for the client. If clients reveal a million-dollar budget, he will work backward to figure out realistic square footage, he says.

“If they hold back, the house suffers, and it doesn’t allow the architect to get as much bang for the client’s buck. So at the end of the deal they’re not getting what they could afford, and might end up asking, ‘Why do I have plastic laminate countertops?’ and blame you for it,” Gloss says. “You can’t discount their expectations, but you must show if it’s a reality.”

Certain core costs to a home don’t change, such as kitchens, bathrooms, garages and electrical service, he says. Adjusting square footage and revisiting product selections are areas to trim costs. “Look at major line items first. Lighting, we can cut $10,000 off that and clients can have an allowance to pick cheaper fixtures. Instead of $45,000 for tile, let’s give them an allowance for $35,000 and they can pick something cheaper.”

Gloss is designing a series of homes that include catering kitchens, which require one and a half more products; that’s expensive square footage, he says. At the same time, the homes include four-car garages rather than three-car garages; that’s not so expensive, he adds.

Sometimes lost in the cost-cutting process is a home’s structure. “All those invisible parts of a complicated roof form, or an elaborate deck that must be flashed in. All that gets covered up by drywall, and ultimately if it could be simplified, you could save plenty of money. Take out some corners, take out the complexities of the structure, and you can get $15,000 to put back in the interior,” Gloss says.

It can take many years to develop the ability to accurately assess client expectations. Those in the home building game for longer periods of time have more insight than those new to the market, he adds. “I was in the building trades 25 years ago, so I’m working on really old information. Still, the old rules of thumb carry through. At the same time I think it’s difficult to do a project today without using the design/build process. Honestly, this firm has not done a bid set of drawings in — forever. When we did do bid work, it was whoever made the biggest mistake that got the job, which is not a good way to run projects,” he explains.