What Impact Can Design Teams Have On Density and Affordability?
To answer these questions, designer and urbanist Hannah Hoyt, Gramlich Fellow at Harvard Joint Center for Housing Studies interviewed 30 professionals working in the development sector. The findings? To help make housing more affordable, the report recommends design team’s consider multiple strategies that can curb development costs in all three categories: land costs, soft costs and hard costs, with a focus on what savings are within their day-to-day control and can be passed on to occupants.
Land costs refer to the cost of acquiring land—and amounts to approximately 10% to 20% of total development costs for a typical multifamily project. Examples of strategies to maximize land value include selecting a site that offers economies of scale, considering design solutions for oddly shaped lots or scattered sites and renovating, converting or co-locating housing with existing buildings. A standard approach to site evaluations that considers everything from soil and site clearance to grade and zoning can, according to the report, go a long way to identifying scalability and avoiding unexpected site preparation costs.
Hard costs are the costs of construction, which can be divided into four sub-categories: substructure and site prep, shell and structure, interiors, and services. Hard costs amount to 50 to 70% of the total costs. Examples of strategies that can have a positive impact on hard costs include designing units for maximum flexibility and efficiency, investigating new techniques and materials and investing in energy and water performance to realize long-term savings for a project.
Finally, soft costs include all other costs—financing, design, engineering, permitting and any impact fees. In this category, engaging general contractors early and as partners can help realize savings and sharing more information with subcontractors can result in more accurate cost-estimating.