During two decades working in the high-end residential market designing homes for the very wealthy, it was interesting to study how the money gets spent; what is it that pushes costs as high as $1200/sf? Granted, the results can be stunning, particularly if you’re into pigmented plaster walls, leather tile floors, gold leaf ceilings and cast glass soaking tubs.
The 80:20 Rule Revisited
When we started Stillwater Dwellings, our objective was design for the upper-middle market with the goal of producing homes built to 80% of the highest quality level at just 20% of the cost. We did this by removing unnecessary details and add-ons that inflate prices but create no real long-term value. This 80:20 rule is the Pareto Principle, which is widely used to describe the distribution of cause and effect.
Actually there are areas of design that usually aren’t subject to the Pareto Principle. The rules of good proportion, scale, space and diagram all remain, within bounds, unaffected by the materials that define them.
Costs “per/sf” are like the 10-day weather forecast: they exist because there is a huge demand for them and the fact that they are usually woefully inaccurate is hardly ever factored. To use a favorite Bushism, there’s a lot of misunderestimating going on.
When comparing costs per square foot it is critical to make sure you are using an apples-to-apples comparison. On the top of the equation ask yourself what costs are included. Does it include landscape, hardscape, permit fees, architect and engineering fees, cost of money, sales tax and contingency?
On the bottom of the equation, what exactly, is the area measured? Just livable spaces, or are the garage, mechanical, storage, covered areas, deck and patio areas also included? Manipulate these numbers for any project and you can easily have a 100% swing.
And that’s not accounting for the human factor; sometimes the most telling metric would be the delta nose length, measured before and after some people spout out these numbers.