PDP Development Series – Blog 20 – Model Home Costs

Introduction

In order to determine the amount of funding required to construct the model homes a preliminary estimate has been prepared to provide an initial analysis. This is just a beginning approach and an actual site will have to be located before any further cost studies are prepared. Detailed architectural plans would be one of the first steps. For example, for the site selected the governmental jurisdiction would have to be contacted to determine if they would approve or entertain the project under certain conditions. If they would do this then a site analysis would be prepared to determine the proposed sites feasibility. In the meantime the landowner would have to allow for this work to be done before anyone else can buy the property. This process hopefully would determine the validity of the site for the PDP. This process could be done for two or more sites if necessary. Hopefully, this process would prevent mistakes in purchasing the wrong site. The model homes selected for the site should also optimize the market opportunities for the project. Following is a plan (Plan 2) for the model homes. Details for this plan is in the revised book Toward Self Sufficiency and will not be necessary to be repeated here.

The models that can be changed the easiest are 2,3 and 4. The triplex and the student housing are the most important housing designs for the PDP and should remain as shown in Plan 2. Another design for the models 2, 3, and 4 is shown on page 3 and will be noted as Plan 3. The plan is a fourplex or sixplex because stairs can be added (as shown) to make a sixplex by adding two number 2 units on the upper level. If this is done then a flat roof over the two other lower units could be patios and plantings for a roof vegetable garden. However, for the model complex just the lower three units will be built. If needed later after the project is built out a wall will be added (or the old wall removed) in the red areas on the unit plan. The estimate for using this building is Estimate 2.

The design for this fourplex uses 4 add-ons to be the bedrooms. These add-ons could be any size and for the models that should be different sizes so buyers could have several options. Other blogs and the book have additional information about add-ons. In Plan 3 the size of the carports may have to be changed, but for this estimate they will stay the same. The fourplex buildings units have a design that is less expensive than the units in Plan 2 because of the compactness of the utilities and this compensated for by enlarging the add-ons so the costs even out.

The cost estimates are self explaining in the notes provided. It is a rough estimate for now. The median housing costs are used as the base and actual contractor costs should be less expensive. These estimates should be a start for obtaining financing.

Estimate Summary

Estimate 1 (Plan 2) was $ 1,711,860 and Estimate 2 (Plan 3) was $ 1,406,273. This was before any credits for land value adjustments. The land value of lots was more than the value in the proposed sites. The fourplex model was selected because it was in keeping the low housing objectives of the PDP. The number of units in the model homes was 9 and it did not include the students housing in building B. This was for one manager and 6 students (or seniors or homeless people). Just counting the 9 units the density would be 7.3 units per acre. The cost of the units would be less expensive when more buildings were being constructed at one time. There is continuity with the windows, doors, bathrooms, kitchen appliances/cabinets and refrigerators. This allows for buying in quantity.

Costs of the models and at least three other duplex to triplex designs will be bid out to provide actual costs. This will require a full set of architectural plans, during this period planning for the site plan will occur. Social considerations will be considered and is an import aspect of the design. The designs will be judged by people living in the area and this will be a major factor to be used in the marketing.

The next few blogs will be devoted with obtaining various types of financing with special funding for communities in Opportunity Zones. Any comments or ideas will be appreciated especially those that can make the project more self-sufficient. Other earlier blogs should be read in order to understand the planning process to this point.

– George Hunt

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.