Do architects really understand construction costs?

Many contractors are fond of promulgating the idea that architects don’t know what things cost and that architects are forever telling clients that projects will cost much less than they actually end up. Is this true?

I would suggest that this notion of architects not knowing “what things cost” is really more about them not knowing what things cost a specific contractor. As an architect, I do maybe 20 projects a year with maybe 6-10 different contractors of varying rates and skills. I see what the marketplace is doing and have a pretty good idea of what my clients are paying. A project that cost my previous client, say $400K, is now being priced out at $600K by a new contractor. Is the project way over budget because of “over-design”? I don’t think so. But what price should an architect design to? The price from the last project, or should the architect assume that the client will end up with a medium to high-end contractor? As an architect who does more projects a year than than most contractors, I probably have a BETTER idea of what “industry” pricing is likely going to be than a contractor. I just don’t know what a SPECIFIC contractor is going to charge.

Let me give you a small-scale analogy from a contractor’s perspective. You ask a contractor friend what they think you should budget for painting your house. Having worked with maybe 10 different painters, your contractor/friend knows low-end painters who would do the job for $10K, and some primo-type painters who wouldn’t touch the job for less than $60K. However, there are plenty of painters who would do the job for $25K and do a very acceptable job, so that’s what is suggested.

Now, you get some recommendations from other acquaintances who’ve had great results and get two bids on painting: $35K and $42K. When you ask the painters why they are “so expensive,” they respond that your contractor “just doesn’t know how much things cost” and has no business telling a homeowner how much painters should charge. And you now think your friend is an idiot who doesn’t have a clue about pricing.

Speaking from the architect’s perspective, there is no reason that homeowners or contractors need to feel an over-budget design is totally worthless and has to be completely scrapped. Frankly, if you are designing for people’s dreams, you have know what the ultimate dream plan is, and how much it’s likely to cost. Scaling back a client’s dreams too early in the design assumes that they will never be investing in their house again. This is seldom true. Recently I got a call from a client who now will be doing Phase 2, seven years after Phase 1. But they started with an “over-budget” design of which we only built maybe two-third’s.

Even if a client can’t afford the whole dream right now, at least they have an accurate picture of their overall dream and know how far off they are financially from it. It can be reassuring to reposition a completed design as a “master plan” for the future, which can help you budget for how much of that plan is buildable now, and how much has to be deferred. And having somewhat detailed plans can mean that you can build the current project knowing what will be reusable in the future. (e.g. putting in a beam large enough to handle the future structural loads from Phase 2.) It’s more helpful, I think, for an architect to say, “well, I’m not sure we can do the entire project for your budget, but we could certainly do a large chunk of it. Would you be willing to consider doing it in phases?”, than to say, “sorry, but looks like you’re way over budget. You’re going to need to completely redesign your project.”

If a client INSISTS on a particular project scope, certain materials, a certain contractor, or other cost items beyond the architect’s control, AND still says they have a fixed budget, the architect is put in a very difficult position. It is always interesting when homeowners accuse the architect of “over design” yet are willing to risk a lot to get as close to this design as possible, regardless of the quality of construction. Rather than scaling a project back and going with a responsible contractor, they often choose to reduce quality or reliability or insurance (or whatever) to get what they wanted. Can you imagine the client being honest and saying to the architect something like, “Hey, you should NEVER have suggested that extra square footage because NOW I WANT IT! You’re an incompetent fool for suggesting things that I can’t afford, even though I’m now going to try to get them by hook or by crook.” Architects sometimes are convenient scapegoats for a client’s lack of funds and inability to scale back desire.

Often it’s hard to know if the client’s stated project requirements or the budget should be the controlling factor, and sometimes you can’t get the client to tell you. At least 50% of the time, clients describe a $300K project and tell you they have a $100K budget. So as an architect, do I tell them right off they simply can’t afford what they want (making them mad and possibly firing me) or just go ahead and design exactly what they want and let them worry about the money? Or just plan to do some normal trimming down the road?. Shooting high and then trimming back is a legitimate strategy to get the client as close as possible to their stated design goals.

Thus many architects focus more on the design than the budget. And you know what? Many clients figure out how to get the money if they really like the design. Architects GET TRAINED by past clients to not pay a lot of attention to the initially stated budget. Rightly or wrongly, that’s what’s in the mind of many architects.

And while many design-build contractors tout the fact that THEY supposedly have better control over budgets etc. than architects with a separate contractor, in actual practice, I haven’t seen it. Even design-build contractors typically design “what the client wants” and end up coming back with a price that is often over the budget. In fact, a number of my projects have come to me because the clients were working with a D/B contractor, were over budget, and realized they were getting a crappy design to boot.

BOTTOM LINE: You are the one in control of the budget. You need to be clear with your architect whether the budget or the scope of the work should be the controlling factor. And don’t automatically assume that the architect did a bad job if the initial costs are higher than expected.

5 Replies to “Do architects really understand construction costs?”

  1. When my husband and I were researching where we wanted to retire, we became acutely aware of how behind the building industry was, as a whole, to environmental impact. My husband became fascinated with SIP homes, but they are relatively unavailable. We were told repeatedly that contractors were unwilling to invest the additional cost in upgrading homes. I wonder if the design world is also reluctant or do they have a challenge getting contractors to buy into new environmental design concepts?

    1. I think architects — in general — are pretty open to SIPS, but there are a few factors that make this a challenge:

      1) In moderate climates, SIPs (Structural insulated panels) are less beneficial from an energy standpoint, and are considered “unusual” construction and not widely embraced.
      2) Because SIPS are built in a factory, custom contractors have much of their own labor (and profit) deducted, and are therefore reluctant to embrace them. Developers like them for the labor savings, but individual homeowners may have a harder time finding a custom contractor willing to use them.

      Prefabrication is getting more common (including SIPS, Insulated concrete forms (ICS), and modular wood framing) so it’s probably only a matter of time before it will be much easier to find a contractor familiar with them. A good place to find them in the meantime is by talking to the SIPs factory rep’s.

      I should say, too, that the current building codes, especially in California, are now mandating environmentally sustainable building approaches, so NOT building “green” is often not even an option.

  2. Richard, Thanks for the great post. A phased approach is often the best approach. Active Architects DO have their fingers on the pulse of what things cost and your nuanced explanation of the “contractor’s perspective” should be easily understood by the layman who reads it.
    @ Cathy ( above ) – There are many in “the design and construction worlds” whose knowledge is up to date regarding alternative construction materials and processes. They may need to be sought out, however. Designers and Builders, just like most other humans, can also easily relax into the relative comfort of doing things the same way again and again. Additionally some materials and methods may not be best for the region or environment you are thinking of retiring in. I am sure, with a little searching, you’ll be able to find the right team who share your passion for reducing your long-term impacts and life-cycle costs. I wish you great fortune in the endeavor.

  3. Thanks Richard for more sage advice. Budget is an issue for me so I’m sure my architect is pulling out his hair! 🙂 You’ve provided so much useful info on this blog it will help anyone considering remodeling. Thanks for putting the effort into sharing so much of your wisdom.

    1. I have it on pretty good authority that your architect still has all of his hair. LOL. It’s interesting to me that my clients are always imagining that they are “difficult,” when, in fact, they are completely normal and easy to deal with. Budget is never an issue unless it’s being kept a secret. And sometimes clients won’t mention their budget, thinking that if they mention a number, the end result automatically will be twice whatever they say. So they don’t want to say anything. Now THAT’S difficult!

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