1. Reduce Scope

The biggest way to reduce cost is to reduce the scope of the project. This strategy will have the biggest impact on your budget and is the first thing you should consider. Reducing scope means reducing the size of the project in terms of square footage or programmatic elements like eliminating specific spaces or features from the project. An efficient floor plan will always be more cost-effective than one that has underutilized space.

The reason why reducing the scope of your project is so impactful is because it has wide-sweeping effects on almost all budget line items. If you can shave off 100 SF from your project, the effect is more than just eliminating 100 SF of floor area. It results in less excavation, site work, foundations, floor framing & finish, wall framing & finish, ceiling framing & finish, insulation, roofing, waterproofing, trim work, and MEP coverage, not to mention savings in energy usage when you live in the space.

Things to remember when using this strategy:

1. Not all spaces are created equal. Cutting square footage from the bedrooms and living rooms won’t achieve the same effect as eliminating the same square footage from kitchens and baths. Certain rooms cost more to construct. Kitchens and bathrooms are usually the most expensive rooms. They have the expensive stuff: appliances, cabinets, countertops, tile, fixtures, plumbing connections, and electrical and lighting hookups. Contrast this with empty rooms that have simple finishes like bedrooms and storage rooms and you can see how these spaces can vary in cost.
2. Don’t focus on cost per square foot. Reducing overall square footage to reduce costs will actually increase the cost per square foot calculation. Don’t let this discourage you. No matter what you still have to have a kitchen, bathroom, HVAC system, water heater, etc. The costs of these expensive items now get distributed over fewer total square feet which increases your cost per square foot calculation.
3. Consider phasing your project if there are discrete programmatic chunks, isolated structures or major elements that you can save for later. Although there are some redundancies in cost with this approach, it’s a way to postpone certain portions of your big master plan to have a more affordable project right now.

2. Reduce Complexity

Another strategy for reducing construction costs is to reduce the complexity of your design. Complexity can take many forms: complicated floor plans, bump outs in the floor plan, angles & curves, tall ceiling heights, complicated trim packages, elaborate landscaping, and decks, etc.

The reason why reducing the complexity of your project helps create a more affordable house is because complexity typically takes more time, and time is money. Labor costs can be expensive so any way you can simplify your design to reduce the amount of time it takes to build will help. A reduced schedule also eliminates the contractor’s fee and overhead because the number of days the job site trailer, site superintendent, and temporary toilet facilities need to be on site is reduced.

By reducing the number of jogs in your footprint (the number of corners), the easier and quicker it is to construct. It has a ripple effect, too, that can affect many different line items in your budget. Removing a few ins and outs in your footprint saves time in setting formwork for foundations and slabs, in laying out the wall framing, and cutting sheets of sheathing, wall finish, and trim.

Not to mention, the contractor will have less chance of messing something up if you keep the design simple, so it allows for a more efficient building process.

Things to remember when using this strategy:

1. Consider a compact design. How are you distributing your floor area? Generally, if you compare a 2-story house that is 2000sf to a 1-story house that is the same size, the 2-story house will be more cost-effective to build. The reason is that the 2-story house is more compact resulting in a smaller footprint, which means fewer foundations, less roofing, and less site work. But remember, you’ll have the added cost of scaffolding and stairs.
2. Consider using standard dimensions for building dimensions. Every material has a standard size. Most plywood and drywall come in 4’x8′ sheets. Designing a house using a 2′ or 4′ module will maximize material usage, minimize waste from cutoffs, and create a cost-effective construction process.

3. Change materials or systems

After you have reduced scope and complexity, the last strategy to consider is switching to different cost-effective materials. This can be something as simple as swapping countertops, wall siding, or tile products, or it can be something larger like switching entire wall systems like going from SIPS to stick framing or on-site construction to pre-fab.

The reason why changing materials isn’t as effective as the previous two strategies is that you still have to consider labor. You may be choosing a less expensive tile, but the labor cost to install that tile is still about the same. There are, of course, labor-intensive installations that you could try to reduce like going from tile to drywall or shingle siding to shiplap but for the most part, you’ll always have a labor component to the cost that you have to contend which doesn’t give the drastic cost savings you want to see. So on a broad scale, this strategy typically doesn’t help too much if you need to find a lot of cost savings in your project, in which case, the previous strategies would be better suited for you.

Things to remember when using this strategy:

1. What are you sacrificing? In most cases, while you’ll be reducing costs by choosing a less expensive material, you’re also doing it at the expense of something else: like design aesthetic or quality. Evaluate what’s most important to you (cost, quality, time) and make decisions based on those priorities. Here’s a good article to help you.
2. It’s not always an even swap. Changing materials isn’t always as simple as your think. The new material you choose may impact other parts of your project. Ripple effects could be related to color, material size constraints that impact joint and splice locations, compatibility issues, maintenance issues, and life-cycle impacts to name a few. It’s important to consider the full ramifications if you decide to switch materials.

Conclusion

Always remember: It’s always more cost-effective to make changes during design phase before concrete is poured and walls are framed. Not only does this make for a more affordable house construction process, it also saves you from investing a lot of time and money upfront on a design that you later realize is over-budget.

Action Items:

1. Create a preliminary design.
2. Get an estimate from a contractor to see if you’re close to your budget.
3. If you are within your budget, great! Keep going with your design process.
4. If you’re over budget, try these 3 strategies to reduce construction cost. And repeat the process. If you still can’t achieve a workable budget, then you may want to consider a completely different design, not doing the project, finding additional funding, or putting it on hold until the funds are available.

For tips and strategies to balance budget and design, check out our post here.

Interested in more articles on Affordable Home Design? Check out all of our Affordable Home Design resources here.