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​By Joe Kidd, Project Manager

Anyone who’s ever lived or sought to live in our beautiful State of California has recognized two things: we have great sunny weather, and it’s expensive to live here. But the scenery is not the sole culprit for the high cost of living; it is the perfect storm of high demand, tough requirements for building, high labor costs, and high government fees, all of which inhibit the construction of new homes statewide. With limited land and large acreage requirements for building new plots in urban areas, the City of San Diego has looked to an alternate solution to the problem: Accessory Dwelling Units, or ADUs.

According to the 2015 report, “California’s High Housing Costs – Causes and Consequences” by the California Legislative Analyst’s Office, the state would have to add approximately 210,000 dwelling units per year to keep pace with approximately 284,000 jobs added to the State per year. In reality, only about 90,000 new dwelling units are added per year, and it has created a situation where there are many jobs to fill, but not enough homes to house those workers. This has created a less than 4% vacancy statewide and housing costs have ballooned as a result.
This effect fans out from the urban areas and forces those willing to work to live outside of the city, county, and even the state, with workers traveling in to San Diego from as far as Los Angeles and even Phoenix every day to get in to work. Aside from just the effect on housing costs, this exacerbates already congested traffic and works against California’s dedication to decreasing their environmental impact with greenhouse gasses.

​Many solutions have been brought to the table, such as the Affordable Housing Density Bonus program, 11th Code Update, Affordable/Sustainable Expedite Program, and Streamlined Environmental Review. One in particular stands out for its benefits to not just large developers and renters, but to average homeowners as well:  Accessory Dwelling Units also called a secondary unit or ‘granny flat’. An ADU is an additional single or dual dwelling unit that is built on a property without subdividing into separate lots. It is separate from the main building, and though it may have separate water, gas, and electrical meters, and possibly even a separate address, it still rests on the same plot of land as described in the property’s legal description.
The rules for building are simple, though not always easy. It requires that the unit be considered as part of the main property upon selling and cannot be sold separately, it requires passing not only the usual building and zoning regulations, but also passing environmental and traffic impact studies, as well as parking requirements. Each one of these comes with its own fee, paid to the local jurisdiction. Prior to 2018, those fees really started to add up. Rather than paying simple remodeling fees as if the addition were attached to the main house, the fees were closer to the cost of building a new home. 

​These fees are divided by two types of communities in the county; FBA communities and DIF Communities. An FBA community is where there is still land available for developing; the impact fees pay all of the public service requirements for that area, and will tend to be higher than in a DIF community. A DIF community is one where the area is near maximum buildout; in the DIF community, the fees only cover the impact on already-in-place public services. So if you live in an FBA community such as Carmel Valley or Torrey highlands, the fees averaged in the $30,000 to $50,000 range last year, going as high as $120,000. However if you lived in a DIF community such as North Park, Kearny Mesa, Clairemont, Golden Hill, Downtown, etc., the fees were significantly lower to an average of $8,000 to $17,000, with some communities as low as $1500 to $4000.

By Bruce Gemmell, Project Developer

An ARCHITECT will tell you he knows exactly what you want, but too often you end up with what he likes. This is often a result of the architect’s lack of stylistic range, and more importantly, a lack of understanding of your real needs.
 
A CONTRACTOR will tell you he knows what you need and you will likely get a well executed building with no real design elements. This is because a contractor’s expertise is the understanding and execution of building systems, not their integration of design into a cohesive project scheme.
 
What is needed, is an individual who understands both how to design and how to build. Berkley Construction specializes in integrating both design and construction in order to provide the best bang for your buck; this approach is called DESIGN-BUILD. There are many Design-Build firms out there, so why choose us?
 
Everyone talks about cost and occasionally the clients’ needs, but few have a system that can effectively integrate and manage these into a quality project. That is where we are different. Berkley Construction manages the right team to effectively produce quality results by understanding the value in very important items that most others overlook. We will spend quality time with you to really find out what is important to you now and in your future. We then assess your individual desires and your budget and do our best to inform you of what can realistically be accomplished based on the information presented.
 
As your project develops, and becomes clearer, we will collaborate with you to ensure the budget is in line with your desires. In addition, over the course of the process, you the client will understand the cost implications of your choices, therefore bringing your priorities to the surface which will then become the backbone of your project. Now, with a clear set of priorities, a direction can be charted to integrate these into a cohesive scheme that will demonstrate the most effective use of construction to achieve the design intention. In short the right people in the right system -  Better Approach, Better Results.

Contact us to learn more about how a Design-Build approach can help you achieve better results on your next construction project. 
 

The current bid process for remodeling is broken. It often costs too much time, too much money, and too much agony for both the contractor and the customer. This is primarily because there are a couple misconceptions that create serious problems. For example, many customers still think a set of plans defines the scope well enough to get to contract. And “free” estimates are anything but free—they cost way too much on both sides of the table. Worse yet, customers believe that getting contractors to bid against each other somehow saves them money. This process might work if you’re shopping for a pencil, or a jacket, or even a car, but not for a complex professional service. Let’s look at these misconceptions more closely.

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Two Reasons the Current Bid Process for Remodels is Broken

1. Your plans do not define project scope. 
   ​Many people think that after spending time and money on design plans they’re ready to solicit bids from contractors. The fact is there are a lot of quality items and solutions that can be switched out for cheaper ones to make a bid appear lower. Most customers lack the industry knowledge to recognize whether they’re getting a high or low quality bid. No contractor admits to poor quality, and if their bottom line is in jeopardy, they might not be upfront about their bid.
   
   In the past, I’ve written two bids based on the same set of plans, with two drastically different prices. Both were legitimate estimates but the higher one reflected a higher degree of quality, communication, and customer service. Customers may choose the cheaper estimate but they should be given the choice up front.
   
   
2. “Free” is not free.
   Contractors often advertise “free” estimates. The problem is with the cost of these free estimates. The contractor has been handed a set of plans and asked to provide a quote. Usually, that contractor’s experience allows them to produce a quote quickly but the accuracy is often poor, and the details are not fleshed out, because it was rushed.
   
   The true cost of the work is probably close to the estimate but not always. And almost all contractors sub out most of their work. Getting subs to give a detailed, quality estimate for work that hasn’t been awarded is difficult. So now the customer thinks they have a “bid” in hand but really it’s just a bunch of assumptions from professionals that are trying to spend as little time on it as possible.
   
   People typically enter contracts based on these assumptions only to have to haggle their way during the entire process. It’s like spending time haggling the price of a car before you ever see the one you’re buying. The salesperson wants to put you in the Hyundai but you think you’re buying a BMW. And that can be dangerous as you embark on a costly remodel.

How a Professional Service Agreement (PSA) Can Save Your Remodel Project

Pay a professional to help define the scope. A Professional Service Agreement (PSA) is a contract to help you define the remodel’s scope and quality in advance. It often includes some design, engineering, and professional discover services.

The PSA should be focused on defining your scope so that the costing is more accurate. For example, sometimes field services are required. The plans may assume that a certain size footing exists in the current house and a new footing is going to merge with it. Part of the PSA would be to expose the footing and make sure the size assumption is correct and that the condition of the footing can withstand the new scope of work.

It also might be assumed that the framing is going a certain direction. The PSA might call for some exploratory demo to verify this. If the job is building anywhere close to a setback, then the PSA should also include a survey to verify that the work is legal. This goes for height as well. Any neighbor can complain about height and stop your progress during construction. Knowing the precise spot that the city considers ground is critical. You can simply drop a tape measure from the height to the marked spot and show that you’re in compliance. Better to address any issues before the roofing is on and it’s too late.

Probably the greatest benefit of a PSA is accurate costing and timeline. At the end of the PSA, and before construction, you would have an accurate report of conditions and costs. You may not know which paint color you want but you’ll know the type of paint and the costs of painting down to the square foot. If you hire a contractor to perform a PSA for you it should happen early enough in the design process so that changes can still be made if the changes will benefit the project. A customer should know that the fancy standing seam metal roof costs $900 per square, and that being by the beach voids the warranty.

The PSA should define the service as well. Communication and timeline should be addressed before construction. The level of service is very important to talk about. What are the customer’s expectations and what does the contractor plan to provide? How will the architect be involved? Who’ll make decisions regarding changes and upgrades? Who’s supplying what? Are fixtures or appliances included? Which ones? Who’ll be responsible for the logistics of finishes? Some customers are very hands-on while others just want the contractor to do everything.
There should also be no obligation on the part of the customer to use the contractor for the work. The PSA should stand on its own. Should the customer decide to get bids from multiple sources, the PSA will take the guesswork out of the bidding process, and the costs will be much more closely grouped.

These discussions need to happen BEFORE work starts—and the results written into the contract. You’ll pay for this service but the Value cannot be overstated. To learn more about how we can help you develop a PSA for your remodeling project, Contact Us.

There are thousands of things that can go wrong in the remodel process, but these things do not need to ruin your experience or worse, kill the project.  Some things may be out of your control, but not all.  And the more you learn before, the better chances you have of a successful project.  And success doesn't simply mean the project got to completion.  A successful project takes time, effort, and money even before construction starts.  Over the years, I have seen so many construction projects fail.  They go over budget, take too much time, the quality is lacking, the experience is confrontational, and many do not get off the ground at all.  There are three major reasons that projects get off on the wrong foot, and avoiding these can help you get the project to production and completion. 

Avoid these three pitfalls:

1. Price shop based on plans. 
   
   This may seem like it would be prudent, but it can lead to so many problems.  Some people and architects believe that if they make a set of plans, then have 3-5 contractors “Bid” on those plans, they are being prudent and the competition will result in better pricing for them. In reality, the opposite is true.  Although the practice is changing, the idea of getting multiple building experts to spend thousands of dollars in their time and expertise on your plans for free was and still is pretty common.  However, most good contractors will refuse to do so.  Think of it this way, what do you get for free that is worth anything?  Customers think that the plans make the “bids” apples to apples, but that is simply not true.  As an exercise, from the same set of plans, I often make two “bids” that are drastically different in quality, service, and therefore price.  I give them both to the client and ask them what the difference is.  Both are to the plans, both are legal and not shady in any way, but the prices are waaaaaay different.  Most customers would not have the skill set to differentiate the two.  Contractors know this and the lazy ones or deceitful ones will go low, knowing that they are either going to make it up later or just put less into the project.  Unless you know the building trades and quality/service metrics of a project, avoid trying to create a “bidding” war that just brings out the worst in a project.  Instead have discussions with your professional about the quality metrics of each line item, find out why prices vary in each category and why people would opt to pay more instead of less, and why paying more is often a better value than less.
   
   
2. Get a permit before getting a contractor involved. 
   
   Some design professionals will try to get to permit before the estimating process begins.  This is a HUGE mistake unless you are doing the project without regard to budget.  I cannot tell you how many times a client tells me they spent $25k on plans and permits only to have the estimates come in $200-300k higher than their max budget.  Most contractors can get you a basic estimate with very little detail in the plans, the goal should be within 30% of the target budget.  Going all the way to permit before the builder can weigh in on the project design and costs can crash a project with no chance of recovery. 
   
   
3. Try to Live on-site during a major remodel. 
   
   Trying to save a few $$ while doing a major remodel by living on the job site is a bad idea.  Besides the noise, dust, and general activity, it will not save you money.  Unless you have a way to get a separate entrance and wall off your living area from the work area, do not do it.  The General Contractor will have to pay carpenters each day to do extra cleanup.  These guys are not cheap and that extra 20-30 minutes daily will cost you.  If you add this cost to the costs of eating out more if the kitchen is under construction, and add the cost of added stress, it is simply not worth it!  I have seen families buy a used camper or RV and live in it on site or at a local camp ground, and then sell it after the remodel for almost what they paid for it.  Not for everybody, but a little creativity and help not make a project less stressful and costly.

 
  

Current Project: Mixed use spec building
One of our projects is a new construction ground up mixed use building.  It is the first of its kind on Imperial Ave.  The building is noteworthy as it will have 3 floors, with a restaurant and retail on the first floor, the 2nd floor will have offices and also share with the downstairs of the two residential units, and the 3rd floor will serve as loft style master bedrooms for the rental units.

Challenges:

• Permitting anything with the City of San Diego is an expensive and arduous task even for cookie cutter jobs.  This process had to get approval from the City Council and took over 6 years to design and permit.
• The other challenges involved building on a zero lot line, draining the site properly, and framing two separate buildings that connect.

Status:

• We are currently in rough framing, electrical, and plumbing.  Project scheduled for completion summer of 2011.

The following are the top four items home owners need to consider before starting a home remodel.


1)      Get good plans!
In this business, I have seen some head scratchers, but the biggest mistake is poor planning.  If you don’t have a good set of plans your project will be inefficient and often of poor quality.  Your plans should be detailed and include language about the quality of work and materials.  If you think good architects are expensive, try good lawyers, without the former you will need the latter.