hawaii residential construction cost per squarefoot

A potential client, PC, recently contacted me to inquire about a project he wants to build after thinking about it for years. I was elated because his wife seek and found Fins Architecture, so I know that our web presence helps attract new clients. He and his wife met me at their fifteen acre site ten miles north of Hilo. It is a beautiful site with almost 180 degree of ocean view. We walked the site and afterward settled in the shade to talk stories and get to know each other. He had many good questions which prompted me to jot some down, so in a sense these are frequently asked questions between clients and architect which I will paraphrase a few along with my responses.

PC: What are the differences between the services that an Architect can provide versus a Builder?

Fins: There are similarities and the results are all dependent on the clients taste and desired value. As an Architect I tend to approach a project with not only the clients goals but also many personal goals such as aesthetics, site sensitivity, sustainability, ease of construction and economically. When I sign a contract with a client, I am committed until the project is complete, usually one and a half to two years. The design phase may last a year then another year for construction. During construction the architect represents the client and serves as a barrier to the contractor. This method has proved historically the best way to protect the client from many conflicts that arise during construction. Ideally to protect the client from the nightmare of cost overrun.

There is a very good chance that the design for the new home is an original, because it will be designed to fit in a particular site. It will also reflect the client’s lifestyle. Above all if the client can afford all the bells and whistles to make it a special place then we all win.

PC: What If I act as Owner Builder?

Fins: I would discourage that unless you have experience as a contractor. Contractor has the pulse of his territory; he has a handle on where to find a crew, subs, and where to get the best deals for materials. Some contractors also have working relationships with county officials and inspectors that can help avoid delays.

PC: What is your fee based on?

Fins: This is always the hardest questions for me to answer because each project is different from the next. Small and complicated projects will take just as much time to complete as larger more simple ones. My fee is generally based on a percentage of the construction cost estimate.

PC: What is the average cost per square foot? (Hawaii Island)

Fins: My experience with a project of similar scope that is under construction is a little over $200/SF. (Determining square foot cost is fairly simple, one just has to compare with properties currently listed for sale in the area. At this writing home prices are no less than $175/SF for an existing home)

Afterward, I stressed to the Potential Client that having a budget before we start is the best approach to designing and having a custom home built. Cost tends to go up before the project is finished, so it is best to be prepared.

References:

1. What an Architect can do for you?

2. Hawaii and Maui construction costs 2006

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The bidding process is when the house design is sent out to solicit contractors bids. Months earlier, we invited three contractors, Bobby Nakamura, Craig Rice and Keven Rinkenbach, S+R Construction. All three were interested initially, but two dropped out. Nakamura was too busy building his own home, and Rice was also busy, but is willing to do the work on a time and material basis. The client is not comfortable with a time and material bid because it leaves too many uncertainties, mainly ,whether she has enough funds to finish the project. We are left with S+R Construction and only one bid with none for comparison. Both Rinkenbach and Rice were intimidated by the design at their first glance. This project is more unusual, though both have built larger and more complicated projects.

For a residence, small contractors are used to plans that are less detailed, certainly not 45 sheets of architectural and structural drawings. Less detailed drawings tend to allow the contractor more flexibility. In our case, the drawings are more detailed because the client expects an exceptional level of quality and uniqueness. Conventional wisdom and methodology in the design with more details means less guess work for the contractor in the field, and quality control. I also went through great length to design a structure that simplify the construction process , eliminating nebulous trims and decorations, minimalism. Contractors see it differently, they see dollar signs.

S+R bid came in at $755,000 , the client’s budget is $500,000. Sobering. We had a lot to do to get the number down to something the client is willing to proceed with the construction. Let’s back up to my very first meeting with the client to set the budget. The design guideline for Puu Lani Subdivision requires homes with no less than 2500 SF , lanai included. I estimated $200/SF-$250/SF, so $500K-$635K, land cost not included. Cost per square foot on the Big Island varies, $150/SF for “spec” homes to $1200/SF luxury homes. $200-250/SF is for mid range homes. An 2000SF older home plus land in Kamuela can cost as much as $700K or more , $350/SF land included. Cost per square foot is the unit in which the building industry uses to gauge construction cost or in our case to compare estimates.

Lets do the numbers: Sato residence is 3800 SF including the Lanai, Contractor’s initial bid is $755K making it $199/SF, not too unreasonable unless the client’s budget is only $131/SF.

In came the negating process. There are many options to reduce the costs , but for practicality we, the owner , the contractor and I, narrow it down to only a few:

Make minor changes to the design through reduction: more time to redesign, especially if it requires structural changes, and the outcome may vary visually; often, in a structural system, taking something away means replacing with something else, and the cost saving is ambiguous.
Taking a hard look at the contractors estimate and “trim the fat”: There are often unknown areas in the plans that the contractor compensates for with a large amount of money, padding.

There are structural changes requested by the contractor, but at this stage the owner and I decided that we will keep the design as is for the sake of comparing apple to apple. Structural changes and negotiating on something without plans, and hard costs is another level of complexity that is better not to enter into. We do not want to open up “a can of worm”.

S+R is motivated to do the project and is willing to negotiate. Rinkenbach has spent a month’s time to come up with the estimate feels that he deserves to get the job. Trimming the fat seems to be the most effective means of reducing cost because we are working with known numbers. There are hard costs ,material cost, and the soft cost, contractor’s profit and labor costs. Both are negotiable, soft cost are more flexible. I crunched the numbers and was able to reduce S+R’s bid to $640K, without cutting into their profit too much. Even at that price the owner still has a lot to worry about. She still has to come up with another $100K for landscaping and kitchen cabinets on top of the $140K over her budget.

We came to the negotiation table with my revised estimate of $640K($168/SF) and S+R’s revised estimate of $689K($181/SF). S+R’s new number already reflected that they are willing to come down. Though the project grew in size from 2500SF to 3800SF(2500SF enclosed and 1300SF lanai), overall, I advised the owner, both estimates are still within our initial estimated square foot cost($200-250/SF), so with a little more number crunching I think we will be able to reach an agreement with the contractor.

click to see contractor’s detailed bid (estimate)

Tag: hawaii residential construction cost per squarefoot

designing a new home FAQ

Bidding process