Tag: labor costs

You Ask: “Why is Building a Home in California so Expensive?”

We Answer: “Housing Permits Play a Big Role”

Can’t wait to customize your personal haven in the Golden State? Need insights on why building a home in California is so expensive? Between the availability of land, labor and resources, to weather conditions, permits and taxes, several local factors will influence your construction costs.

As Silicon Valley’s premier construction experts, we closely monitor the housing market, and understand the industry’s dynamics inside and out. In our 3-part series on factors that magnify construction costs in California, we shared our insights on (1) rising costs of labor and (2) escalating material costs.

In this concluding page, our experts shed light on how housing permits can make building a home in California so expensive.

Part 3: Housing Permits May Hinder Your California Custom Home Build

As one of the top 3 most expensive states in which to build a custom home, California’s average construction cost of $439k is 40% higher than other, less expensive states. Building costs in our sprawling state vary by city and location, with certain pockets being far more expensive than others.

Moreover, land development fees and building permits are costly, and the process of getting approvals is extremely tedious and time-consuming. This is particularly true in a highly regulated state, such as California, where there are multiple conditional reviews to determine allotment of permits.

• Many review committees: In addition to two distinct entities, the zoning commission and the environmental review board, you need permits and approvals from several other government agencies. These include the building department, fire department, health department, city council and more.

• Density control regulations: For the purpose of density control, in some communities there are stringent lot size restrictions, such as the ownership of a minimum one or one-half acre plot. The bigger the minimum lot size, the higher the upfront costs of land acquisition.

• Environmental regulations: The California Environment Quality Act (CEQA) has several strict conditions that consider the environmental impact of new home construction. However, many approvers misquote or misuse this law, causing a 2-2.5 year  delay in housing permits for even those projects that comply with environment protection regulations. Additionally, starting in 2020, all newly built homes in the state must be solar-powered. According to the Energy Commission, this will lead to an upfront cost of $8,400 for installing solar panels for a single family home.

• Political and community involvement: The higher the state regulations, the more intense the community and political involvement in land use and control processes. For residents who fear that new construction will change the character of their neighborhoods or hurt their property values, there are plenty of avenues to express opposition. This can lead to expensive delays in permits, inspections and approvals.

There is no specific research study showing exactly how much delayed building permits adds to housing costs. However, the typical approval time for new projects in the Bay Area is 12 months, whereas, in Los Angeles, it is 8 months. This excludes the time it takes to rezone land for residential use.

Hire a Dependable Contractor to Build Your California Dream Home

At Flegel’s Construction Co., we specialize in building attractive, functional, high-quality custom homes. Our new home construction team includes experts who can navigate the permits and approvals process to minimize your wait times and building costs. You can count on us for superior craftsmanship, honest communication and timely completion of projects.

We continue to build and deliver stylish, comfortable dream homes to happy customers in and around the Bay Area.  

Building a home in California is expensive, but isn’t your dream home worth it? Contact us online to discuss your project.

Building a Home in California Has Many Expensive Obstacles

Cost of Materials is a Key Factor

If you are exploring the idea of a personal haven in the Golden State, you’re probably wondering why building a home in California is so expensive. Creating your dream abode is a once-in-a-lifetime opportunity. However, the continually increasing cost of labor, materials and permits can make building a home in California very expensive.

As Silicon Valley’s premier construction experts, we are well-versed with the factors that impede new construction in this region. In the first of our 3-part series on this subject, we shared the issues that contribute to rising labor costs. We now investigate the second barrier: the escalating cost of materials.

Part 2: Expensive Materials Making Your California Dream Home Project Challenging?

Almost everything in California is more expensive than the rest of the country. The same holds true for labor, construction materials, permits and government fees for building a home. A study by Terner Center for Housing Innovation suggests that overall construction costs across the U.S. increased by 11.8% from 2011 to 2016. However, during the same period, construction costs in San Francisco grew by 12.6% and in Los Angeles by 13.6%.

Here are some factors that impact material costs in California.

• Basic price fluctuations: Many commonly used construction materials have seen a significant price rise in recent years. According to the Associated Builders and Contractors, Inc. (ABC) analysis of U.S. Bureau of Labor Statistics, April 2019 release, overall construction input prices are up by 2.5% in the twelve months from March 2018 to March 2019. This includes:
  • 5.9% increase in fabricated structures and metal products
  • 4.7% increase in iron and steel
  • 4.5% increase in plumbing fixtures and fittings
  • 8.4% increase in asphalt, tar roofing and siding products
  • While softwood lumber showed a marginal increase during this period, it had a price escalation of 23% between June 2017 and June 2018.

• Tariffs and trade policies: The imposition of tariffs and possibility of trade wars, combined with rising interest rates is a potent combination that causes construction material costs to skyrocket. For example, the trade policies of the current government have put a hefty price tag on steel, aluminum and lumber. As per the National Association of Home Builders (NAHB), after the levy of tariffs on Canadian softwood lumber, supply falls short of the demand. A tight inventory leads to steep prices. They estimate that rising lumber prices alone contribute to a $4,000 increase in the cost of building a single-family home. While talks of trade deals for steel and aluminum are still underway with the European Union, California’s building material costs have yet to see their impact.

• Prescriptive building standards: California’s building standards and codes are stringent. Contractors must use a specific quality of building materials for windows, heating or cooling systems and insulation, in keeping with the state’s energy efficiency goals. Meeting these standards and codes means sourcing higher quality, usually more expensive materials.

Hire an Experienced Contractor to Build Your Dream Home

At Flegel’s Construction Co., we specialize in constructing new homes that are attractive, functional, and most importantly, built with high quality materials. We are aware that several builders use sub-standard or replacement materials to help clients save thousands of dollars in upfront construction costs. However, in our experience, such homes face several long-term issues, including warped walls, cracked plaster on internal and external walls, warped decks and uneven floors.

Our skilled team works to your exact specifications to deliver your dream home with speed, efficiency and quality. Happy customers in and around the Bay Area are enjoying stylish, comfortable spaces, suited to their lifestyle. Now, it’s your turn!  

Building a home in California is expensive, but isn’t that true of any dream home? Don’t give up on your dream. Contact us online to discuss your project.

Building a Home in California is as Expensive as Gold!

Factors Affecting Construction in the Golden State

Is your dream of a custom-built home facing an unsurmountable cost barrier? Not sure what makes building a home in California so expensive? As premier construction experts in this market, we know that a custom home is a much sought-after opportunity to personalize your living space.

However, the three primary reasons for the high cost of new construction in California are:

• Labor: Availability and cost, depending on the size and complexity of your project
• Materials: Your design preferences will define the cost of construction materials
• Permits: Prices vary by location and the volume / type of work involved

In this 3-part series, we’ll help you understand each cost barrier that stands in the way of building your dream home in California.

Part 1: Insights into Labor Costs for Building a Home in California

Labor is the most significant component of any home building project, and the related costs begin from day zero of commissioning your new construction. Here is a breakdown of the various labor costs that you are likely to incur:

• Consultation Fees: For the services rendered by the land surveyor, the architect, the construction engineer, and their teams.
• Foundation and Framing: To cover activities related to excavating, pouring, backfilling, landscaping and setting up the structure’s frame, trusses and metalwork.
• Exterior Finishing: Building the walls and inserting the doors, windows and roof.
• Interior finishing: Completing the insulation, drywall, trim, painting, flooring, plumbing, electrical connections and other such sub-projects.
• Finer Details: Preparing the driveway and patio, building the deck, adding a pool, installing the home’s heating, cooling and ventilation.

Factors that Impact Labor Costs in California

As per the Bureau of Labor Statistics, the average cost of construction labor in California is approximately $37.59 per hour, which is 12% higher than the U.S. national average of $33.52 per hour. In addition to costly manpower, there are a few other factors that may influence labor cost:

• The size and design of your home: The greater the square footage, the higher the costs. Also, complex architectural details, unusual shapes, or an exceptionally high number of corners or rounded edges will add to the scope. Greater effort means higher labor costs. Similarly, features such as a deck, a pool, or an outdoor kitchen will increase the number of man-hours and consequently, your cost.
• Number of stories: The higher you wish to build, the more design work, excavation, and construction expenses are involved. You may also have to pay a premium for additional construction equipment and the safety of the laborers on site.
• Materials and systems: If the materials or systems that you select require specialized skills or equipment for installation, that will add to your cost of labor.

Hire a Trusted Contractor to Build Your Dream Home

At Flegel’s Construction Co., we have extensive experience in constructing new homes to your exact specifications. Our team of qualified architects and master craftsmen will deliver your new home, on-time and on-budget. You can count on us for stylish, comfortable spaces created with quality materials and flawless execution.

We continue to serve a growing base of happy customers in and around the Bay Area.

Stop wondering why building a home in California is so expensive! Contact us online.