Discussions on Cost

Cost usually is the crucial discussion in construction. The design may be good but if there is no agreement in the cost, the project cannot proceed to construction.

In the Philippines, the usual topic is the “per square meter” cost. This is an assumed amount, an average per square meter cost of residential construction. Discussions with contractors, would have one believe that there is a single range of acceptable per square meter cost – whatever the design, whatever the specifications and whatever the location. They would also have one believe that they are the lowest in the field.

So what is the logical explanation of cost? Here are the factors affecting building cost

1. Locational Factors

Geographic location. Materials have to be delivered. A far site would require additional delivery costs. This would also affect labor in terms of rental expenses, etc.

Condition of the Site. It would be important to know the load bearing capacity of the soil and the slope of the site since this would affect the structure. Footings, columns, and beams can be bigger. Structures would be necessary to retain soil. Presence of rock can require additional excavation charges.

Permits. Expenses related to clearances and permits vary from area to area. Some areas charge development levy fees, some subdivisions have higher construction bonds (though this is refundable).

2. Design Factors

Plan Shape. The shape of the plan is important to consider since this dictates the length of the perimeter wall. Complicated plans means there is more “wall cost” per square meter. This will entail more cost in terms of masonry, plastering, painting and/or cladding. Exterior closure is a high cost item (often 10-20% of the total cost). Plan shape has also an effect on the number of lighting fixtures.

Size and Space Efficiency. When floor area increases unit costs usually decreases. The percentage of more expensive areas also decreases with larger floor areas thus a reduction in the per square meter cost. Also when less expensive areas become larger, per square meter costs are reduced. These are the garage, balcony, etc.

Building Height. A two-storey high structure of the same area as a one-storey structure is comparably less expensive. The reason for this is that the roof which is a major cost item needs to cover only half the area. Plumbing lines are also shortened, requiring only less distance to cover. Foundation is also only half that of the single storey. Above six or eight storeys though, there is an increase in cost due to the increase in structural cost to support the load, wind bracing, elevators and fire code requirements.

Storey Height. Taller rooms of course are more expensive than regular rooms. An example of tall rooms are lofty living rooms with cathedral ceilings. Structures with half storey height on the second floor are, on the other hand, less expensive.

Fenestration. Structures with more windows are more expensive than those with less windows.

3. Qualitative Factors

The selection of materials specifications also has an effect on cost. Materials that are require less maintenance and which are usually of higher aesthetic value is more expensive than those which are high maintenance and of simpler design. Roof materials vary from corrugated GI to that of wood shakes or terracotta tiles. Doors can be plain flush plywood or pressure treated for termites. Windows can be plain steel casement with putty or a branded weather proof aluminum or pvc sliding window. Water pipes can be plain PVC or the latest polypropelene fusion welded pipes. Exterior finishes can just painted or even cladded with ship lap planks or Western Red Cedar cladding. Floor finishes can just be vinyl tiles or Granite or Narra planks. Plumbing fixtures can just be local brands or imported brands.

4. Contractual Factors

Most important to note is the “escalation clause.” Will the contractor absorb increases in material cost or let the Client pay for these?

5. Time Factors

Projects which require to be finished in accelerated schedules would require overtime and extra shifts.