Archetype Design, Taos Architect, Construction Costs Handbook for Taos, Green Building

As I write on November 4, 2008, Congress has recently renewed the solar tax credits and there is great hope that an Obama administration will engineer an economic recovery which features a new era of alternative energy and green development. Meanwhile, however, we are enduring the most brutal building environment I have seen in thirty-five years of working in Taos. It’s downright impossible to predict where building costs are heading in 2009, but at least I can provide you with accurate costs for the present and some suggestions for the future.

I’ve titled this the “Lean and Green Edition.” “Lean,” because along with a recession and a plummeting stock market, this is the deepest correction the housing market has seen since the Great Depression. “Green,” because greenbuilding continues to be the dominant trend in homebuilding, and one which I think is vital to the future.

It’s no coincidence that I’ve paired the two: I think that once the excesses of recent years are pared down, we’ll arrive at a revised view of the world where “lean” simply makes the most sense and is, in fact, a fitting complement to “green.” Let me explain.

Beginning around Y2K and continuing right through early 2007, we saw an amazing rise in construction costs – doubling during the hottest five years. Sure, it was partially a result of a hot global economy competing for energy and basic materials – but we can now look back and also see how the housing bubble bid up prices on homes and contributed to inflated costs. In other words, rising real estate values supported rising construction costs, while easy mortgages kept the cash flowing. It didn’t matter how much it cost to build a house when you knew you could flip it for a profit.

But as early as late summer 2006, building costs in Taos were beginning to outstrip real estate values, making it more difficult to get the 60% or 80% financing that homebuilders were seeking. Today the situation is far tighter. Real estate sales have tanked, home prices have dropped some 15%, and appraisals have pulled back even more. But building costs have merely tempered their rate of rise, leveling off only in a few areas – so there is now an even greater disparity between the cost of building a home and its sales value. Meanwhile, credit is harder to find than a creek in the sagebrush. I expect that it is going to take a few years before building costs and home prices are back in balance and we have a healthy building environment again. Of necessity, it will be a smarter, less wasteful, and leaner industry than that of the recent past.

That returns us to “green,” because the efficient and intelligent use of energy and materials is, by nature, lean. It implies, among other things, building small.
It also implies building really well, so that a house will stand for centuries rather than a few decades.

At a planetary level, this is a shift which we absolutely must make in a world of growing demand and limited resources, not to mention a threatened environment. At an economic level, it’s a shift we also have to make, because for most of us it’s simply too costly to be wasteful or careless of energy and resources. Lean and green is the future. Fortunately for Taoseños, the cost of native materials like adobe and vigas, which are ideal for both greenbuilding and our traditional architecture, have not risen nearly as much as mainstream manufactured materials.

I do think that the Taos economy will recover as fast or faster as the rest of the country, if for no other reason than that baby boomers are lined up to move here as soon as they can. By that time, a home in Taos which is lean and green – sensible and environmentally sound – is going to look pretty good.

My hunch for the future: building costs will inevitably rise because there is only so much copper and iron and oil in the world. As long as the global economy is slow, cost increases are unlikely to exceed the typical 5% a year. It’s even possible they’ll flatten out for a while in the event of a deep recession and an epic bear market in stocks. But all bets are off when the global economy picks up – whenever that may be. Strictly in terms of costs, it’s a good time to build.

This handbook is intended to provide quick, ballpark answers to questions frequently posed by prospective homeowners, homebuilders, and remodelers. The figures, distilled from data provided by numerous builders, are necessarily approximate: in many cases you could deduct 10-20% for a budget job, or add even more for top-notch work. But we all have to start somewhere, and the data in these pages should be useful as you contemplate a home purchase or construction project. As always, we recommend confirming all costs by thorough research or written bids. Here’s the anatomy of a hypothetical mid-range custom home budget:
Home budget, Builders Costs

In the sections below, items marked with an asterisk (*) are for materials only. All other figures include material and labor. Note that these costs may be subject to contractor’s profit-and-overhead and to New Mexico Gross Receipts Tax. These numbers will be updated periodically and may be viewed on the website: www.archetype-design.com.

1. General Costs
(Costs in this category include contractor’s profit
and overhead, but do not include tax.)

Economy home: $150-$175 p.s.f.
Low-end custom home: $200-225 p.s.f.
Mid-range custom home: $250-$275 p.s.f.
High-end custom home: $300 p.s.f. and up
2x6 garage, insulated, slab, stucco, sheetrock: $115-$135 p.s.f.
Typical portal w. slab floor: $95-$115 p.s.f.
Typical carport w. slab floor: $95-$115 p.s.f.
Typical kitchen: $300-$350 p.s.f.
Typical bath: $300-$350 p.s.f.
Typical LR or BR: $150-$200 p.s.f.
Radical remodel: $100-$175 p.s.f.
Permits per $1,000: $2.50-$4.75
Workers Comp insurance: 15-20% of payroll
Contractor profit & overhead: typically 15%
Gross Receipts tax: town 7.9375% county 6.875%
Annual price increases: historically 5-7%, recently volatile

At Archetype Design we prefer to design homes which, regardless of style, are energy-efficient and in harmony with the land. This usually means educating prospective homebuilders about green systems: what works and what doesn’t; what is cost-effective and user-friendly and what is not; what fits the style of your house; what is appropriate for your particular site or personal lifestyle. Here are some basic guidelines for a greenbuilding plan:

Build small. Whatever your “dream house” might be, build 25% smaller. You’ll conserve resources in the short term and save tons of energy for heating over the long term.

Build solid. Take some of the savings from building small and build a house that will last centuries rather than decades.

Build close to town. It makes no sense to have a green home with a thirty mile commute.
Super-insulate. A super-insulated house needs less energy to heat or cool, and less solar gain as well.

Use Thermal mass. Slab floors or subfloors and interior walls of adobe help temper the home against rapid fluctuations of heat and cold.

Limit heat loss. North facing windows and extensive exterior walls are to be minimized.

Work with Nature and keep it simple, so that you can heat your house and hot water with passive solar techniques - minimizing pumps, pipes, collectors and controls.

Direct your roofwater to major trees and shrubs, avoiding expensive cisterns and another set of pumps, pipes and controls.

Use native, non-toxic materials such as adobe, pumice-crete, vigas, roughcut wood, and stone - make your house healthy, reduce the energy costs of manufacture and transportation, and support both the local economy and building traditions.

Use energy-efficient appliances, heating systems, daylighting and electric lighting.
Radon abatement may be desirable in areas known to harbor radon gas in the soil.

Heat Recovery Ventilation in today’s supertight homes is a way to ensure fresh, pure air - particularly in the case of environmental sensitvity.

Water testing and treatment may be an important health consideration.

Landscape with natural cooling in mind: Spot trees to serve as exterior swamp coolers and to protect from excessive sun penetration.

We think it’s important to recognize that every home has an environmental impact and each of us has to achieve a realistic balance between lifestyle and earth-friendliness. Not everyone is prepared to live an alternative lifestyle, but almost everybody is interested in making some initial steps towards sustainability. A 50% solar house might be a reasonable goal for almost any homeowner, while a completely solar home will appeal to only a few. Start with greenbuilding systems which are user-friendly, cost-effective, and utilize fewer resources to manufacture and install.

These systems and techniques top the list for cost-effectiveness and
user-friendliness:

Passive solar gain (heat from the sun penetrating through south-facing windows).
Super-insulation (foundations and slabs, walls, roofs, window coverings).
Solar hot water heating (the simpler the better!)
Roofwater utilization (directly to trees or, for household use, to a cistern).
Energy-efficient appliances, daylighting, electric lighting, and backup heating systems.
Drip irrigation, permaculture, and xeriscapic plants in a natural cooling design.

Many other options are available to complement your particular needs. For example, if you have an art collection and great furniture, you may need to reduce the sun penetration characteristic of passive solar gain, and instead resort to an active solar system with collectors, pumps and controls. Stand-alone solar electricity is not cost-effective if you have ready access to grid power, but if your site is remote you may have no choice. Graywater systems are prohibitively expensive if installed per state health codes, but out in the boondocks there may be no one around to care if you cut a few corners. The construction process itself is also worthy of attention, and more homeowners are requiring their builders to recycle cardboard and discarded building materials, use certified sustainably-harvested lumber, and guard against erosion or loss of ground cover.One simple thing we can all do is sign up at the Kit Carson Electric Co-op for the Green Energy program, ensuring that your electricity comes from wind-generated sources on the Great Plains rather than from coal-fired plants at the Four Corners. It costs a few pennies more, but it’s a great way to help give birth to a new, clean-energy industry and avoid new power plants. Call 758-2258 for details.