Back in the spring, I sent the half-duplex listing to my Granny so she could see pictures of the place. “You’ll be a millionaire!” she said in response to the list price. To which I laughed heartily.
It can be hard to imagine where all the money goes. One can look at what was paid for the land, run some rough numbers and conclude that every developer must be raking in the millions. One would be mistaken, perhaps especially in our fair city in which it’s so easy to feel one is being punished for daring to build anything but a standard single family home.
Even as the person in the middle of it, I was ignorant about how much everything was going to cost in the end. While Interactive gave us periodic budget updates, we were continually making choices about products and finishes and there were all these other items like legal costs, interest costs and consultant fees that kept ticking up the total. My final cost guess crept upwards as we neared completion, and eventually, when the end was in sight, I had to tear off the bandaid and assess its totality.
So here it is.
People often ask: how much more does it cost to build a Passive House? That’s actually a very difficult question to answer because there are so many choices made along the way that affect the final cost and only some of them are directly related to Passive House. Do we go with a cheaper laminate flooring or spend more to refinish our old hardwood floors? Cheap toilets or fancy toilets? Vinyl of fiberglass windows? And to truly know the difference, for every “Passive House” choice, you would also need to cost the code minimum option. This is difficult to do in practice as there is often not just one alternative. There are also elements that could arguably cost less, like designing a very simple building shape, or installing a smaller heating system – again, very difficult to cost an alternative. So I’m not going to answer this question.
People also often ask what it costs per unit area. This I can answer, at least for our project.
When we toss around $/SF construction costs, we are usually talking about hard construction costs, which is what it costs for the builder to create the structure and its finishes. It excludes things like landscaping, design costs, permitting fees, borrowing costs etc. which can all vary widely.
Hard construction costs include everything we paid Interactive for (including all materials, labour and contractor markup of 10%, less GST), plus owner supplied items like appliances, windows, vanities, and mechanical equipment.
Total floor area of the building (including all three suites) is ~4270 SF (not ‘conditioned area’ but actual built square footage).
Here we go:
| Item | Total cost | Cost/SF |
|---|---|---|
| Hard construction costs, including contractor markup, less GST | $1,380,000 | $323 |
| Landscaping (approximate) | $40,000 | $9 |
| GST on hard costs | $71,000 | $17 |
| Soft costs (city fees, structural, architectural, surveying, insurance, legal, etc) | $121,000 | $28 |
| Cost of borrowing (progressive mortgage interest (which rolled in our original mortgage), lines of credit, family loan) | $97,500 | $23 |
| Total (*totals do not add exactly due to rounding) | $1,711,000 | $400 |
| Less extra unnecessary costs from stop work order, and special costs like existing house deconstruction + hazmat and rezoning | -$82,000 | -$19 |
So about ~$400/SF all in. Factoring in the original mortgage on the property, we were $2M in debt come the end of the project. No wonder I’d been feeling so anxious.
Folks in other regions may gasp at these numbers, but it’s actually pretty middle of the road around here. Altus Group’s 2020 Canadian Cost Guide pegs the low end of regional hard construction costs for custom built single family at $430/SF and we’re well under that benchmark.
I’m not even going to mention my original budget estimate because it was embarrassingly naive, but I do recall at one point aiming for $300/SF including soft costs. Local construction costs have reportedly increased 10% every year for the past 5 years, and Interactive definitely got some surprisingly high quotes in our hot construction market. So there were some external factors influencing the change over time, along with our choices and changes along the way. I would say that reconciling the cost for the level of finish we expected with the lowest end option was one of the biggest areas where our early estimates diverged from what we actually did.
I wheeled and dealed with my industry friends as much as I could to get good prices for owner supplied items and Matt put in a ton of labour, but balancing these savings were higher costs for some discretionary items, for instance:
- Higher end finishes (e.g. solid core interior doors) – nothing extravagant but everything is solid and durable. I didn’t price alternates here, but I think one could easily shave off $50k in finishes if one needed to go cheaper. Although having said that, Matt is constructing most of the millwork on our side using our old wood and that ‘cost’ is not included.
- Refinishing the original fir floors – this was $$$ even though the material was “free” (i.e. Matt’s labour to pull it all up, stack it, store it, move it multiple times). About $9k in expert labour for relaying and refinishing. Sure looks beautiful though, with avoided embodied carbon benefits to boot.
- Fiberglass vs vinyl framed Passive House windows and exterior doors – this was a difference of about $15-20k. We went with the fiberglass because the material is more durable, has a leaner look and is (as far as I can tell) less damaging environmentally.
So after my hearty laugh with my Granny, I told her that we would simply be less in debt after selling the other half. Which is OK. We have a great new home that is built to last and to perform extremely well, in our ideal walkable location surrounded by incredible neighbours. We accomplished what we set out to do – it just cost more (and took longer) than we’d hoped. Par for the course in the construction world, right?
