This Monday, Brian and May from ISA met with Scott from Build It Green Philly to brainstorm final cost reductions that could be made prior to finalizing the construction drawings. The team came up with some good recommendations for cost cutting that get us another big jump towards our goal. Some of the cuts are a bit painful, but we all agree they are necessary while not compromising the design to a point that we are no longer comfortable with.

I have thought about the list and made a few decisions and minor modifications to come up with the final list you see below:

• Eliminate the kitchen island [$1,000]
• Use a single drop-in range rather than separate appliances [$800]
• Use $2 psf tile allowance in the bathroom rather than $5 psf [$300]
• Eliminate Hardi on the rear, side wall and replace with stucco [$800]
• Reduce # of outlets [$200]
• Remove entire closet in Master Bedroom [$1,000]
• Eliminate one window at ground floor, North facade [$400]
• Eliminate washer/dryer from case study (will remain in bank budget) [$1,400]

Total Savings: $ 5,900

New Construction Total: $103,315

The most painful changes in here for me are the kitchen modifications. It was suggested by a reader (dream) to make these changes in our previous post on appliance budget reductions and I had replied that we had considered but really wanted to keep the separate oven and cooktop to beef up the design. While it hurts a bit to simplify the kitchen, it is the smart decision and it will also simplify and reduce the cost of the range hood ventilation by being able to mount it to the wall now. Also, we can maintain the functionality of the island layout by replacing the permanent island with a moveable SS kitchen worktable that can be bought from a local kitchen supply store for under $250.

Another modification that may pique some interest is removing the closet altogether from the Master Bedroom. This is something we discuss early on while questioning what is really necessary in a home. A built-in closet could be seen as an upgrade and often people like to purchase and customize their own clothes storage units for their bedrooms. I simple unit from IKEA or even a DIY system (I have some ideas for this)  may be a nice option. Again, this is for the basic $100K house model in the case study only. I realize that most may choose a closet “upgrade” if given the chance and we would also most likely put one in homes we intend to sell such as the 120K house next door.

The last major tweek on here worth talking about is the washer/dryer. While I still want to include this in the home and the budget for the bank, I am again taking the advice of the readers and removing it from the case study budget figure. This appliance really is not required in a new home and is included many times today as a gift or added feature by the developer.

Scott is currently reviewing the final construction drawings with all of his subs to nail down the final figure. We will meet mid next week to review what he has come up with and discuss final cost reductions if still necessary at that point. I am very pleased with the progress we have made on the budget in the past few weeks and would not view achieving anything under $105K as a failure. In the end, this may not be the $100K house in reality and there may be fundamental design tweeks to be made to the plans that we simply can not make at this stage of the project. That’s OK with us and was one of the reasons for the experiment in the first place.

Links:

Updated Construction Budget

I guess it should come as no surprise that we are turning to IKEA for budget reductions in the kitchen and possibly bath as well. Maybe I was crazy thinking we could fit a custom, “Urban Kitchen” into the 100K budget or maybe I just wanted another project since I’m not busy enough already. The “Urban Kitchen” idea will live on and we hope to see it in either the 120K House or the M&M 100K Plus House.

So how much will switching to IKEA save us? Our rough budget for the custom kitchen was $4K for the casework and $1K for the countertops. We have not chosen the exact IKEA cabinetry we want to go with as of yet, but I think it’s safe to say that we will stay under $2K for cabinets only. I’d like to go with a nice recycled content countertop still, so we’ll leave the countertop budget as is which should afford us $50 – $60 per linear feet. Not a lot, but we should be able to figure something out.

Another source of savings with the IKEA kitchen will be in labor as I intend to assemble and help install myself. Next week we will probably be posting a list of items that we can put our own sweat equity into to reduce the overall cost further. It is important that this list not be too long or require too much expertise in order to make the arguement that other buyers could accomplish the same list in an effort to achieve the $100K target.

IKEA Cabinets in Place of Custom Casework

Total Savings: $2,000

New Construction Total: $109,215

We broke the $110K mark! Our builder and architect met this AM to discuss further cost reduction strategies so hopefully we’ll have more exciting budget reduction posts soon on our way to our final goal.

This first reduction is not a big one and is mainly influenced by feedback from our last post on appliances for the 100K House. After reviewing the choices made in that post, I realized that I really didn’t want a bunch of mis-matched appliances from a variety of vendors. Instead I went back and quoted different configurations from Kitchen Aide, Bosch and ultimately Frigidaire.

Originally, I was skeptical of specing Frigidaire, but once I poked around their site a bit more there were some attractive appliance models to be found for a reasonable price. Frigidaire was also recommended to me by a sales rep at a local appliance dealer.

Here are the new models with corresponding pricing:

New Kitchen Appliances

Refrigerator: 18.3 cu. ft. SS w/ water dispenser GLHT184TJS [$924]
Dishwasher: 24″ SS PLD4375RFC [$529]
Oven: 27″ SS Wall Oven FEB27S7FC [$1,039]
Cooktop: 36″ Gas SS FGC36S5EC [$750]

Total Savings: $447

New Construction Total: $111,215

As I said, this reduction is not too impressive in terms of cost, but it is lower and I think it’s a vastly improved package overall. I did not show the washer/dryer and we still intend to stick with the LG unit.

The next reduction will have to do with the kitchen casework. I bet a few of you can guess the change we are making in this area.

Somehow I forgot to include the Federal Tax Credits in yesterday’s post we will get for the Solar Thermal and Energy Efficient status of the home. $2,000 for each which brings our total down to $111K and change. The spreadsheet is also updated.

With construction only weeks away it is time to review the construction budget and make our final cuts to try and reach our $100,000 target. Our last major post on the budget was all the way back in February. Scott at Build It Green Philly (aka Level 5 Construction) sent over the most up to date budget to me this weekend. The budget is based an older version of plans that included some slightly different mechanicals than we are leaning towards now. ISA is working as we speak on finalizing the construction drawings for Scott’s final quote.

The number is not pretty so let’s just get it over with. The current construction budget is at $115,664 $111,664. This is painful to me to say the least. Cuts need to and will be made in the next few weeks. I guess this is the exciting part where we see if we can actually pull off this goal that so many have told us in unachievable. I know it’s possible. Whether we have the right design to accomplish it or not will be seen in the next few months.

Here is the budget broken down into categories:

Current 100K House Construction Budget

$11,696 – Concrete
$1,803 – Masonry
$18,104 – Rough & Finish Carpentry
$10,705 – Thermal & Moisture Protection
$6,144 – Doors & Windows
$10,448 – Finishes
$22,752 – Special Construction (SIPs, Casework, Appliances)
$13,915 – HVAC
$11,616 – Plumbing
$8,479 – Electric

$115,662 Hard Construction Budget

($2,000) – Federal Builder Tax Credit for homes that are 50% more efficient than code
($2,000)  – Federal Solar Tax Credit for installation of our solar thermal system

$111,662 – Total 100K Construction Budget

As, stated before, this is based on past plans and some things will change in the coming weeks just because they have been updated to reflect the new plans. I will be doing a series of posts on each reduction made until we get to our final number. Each reduction will also be recorded on our working 100K Construction Budget also. Go easy on us in the comments. It’s a stressful point in the project right now.

Over the course of this project I have found that there are three elements to true construction costs:

1. The cost of the material being used.
2. The quantity of the material being used.
3. The difficulty or labor involved to build an item.

I have often heard that labor makes up 60%-70% of the cost of any constructed item from cabinets to entire homes. I think this is pretty accurate.

I apologize for the elemental nature of this post. If the brevity offends, please feel free to add substance with your own comments on the subject matter.

We all know there are not many federal government incentives for green building right now. Many states have picked up the ball and implemented some decent local incentives of their own. Unfortunately, Pennsylvania is not one of those states at the moment. They are working on state legislation to improve this, but for now we only have the Federal credits to rely on.

From what I can see there are two Federal Tax Credits for Energy Efficiency that we may be eligible for.  Both can be found on the Energy Star website at http://www.energystar.gov/index.cfm?c=products.pr_tax_credits.

The first is for our builder. If we are able to build a “home that achieves 50% energy savings for heating and cooling over the 2004 IECC” then our builder is eligible for a $2,000 tax credit. We simply have to fill out some forms and pay our LEED Provider $100 or so to certify that we met this goal. Since an Energy Star home is only required to be 15% more efficient than this same code, this is no easy task. We are currently aiming for this 50% goal which equates to a HERS rating of 50, but the goal may slip due to budget constraints.

The second available tax credit is for Solar Water Heating that we are now looking into. The government will consider paying us 30% of the cost of a Solar Thermal system up to $2,000. Since a typical solar thermal system, including storage tank and installation will most likely run us close to $10K, we would be able to take advantage of the full $2,000 credit.

So, best case scenario is that we get $4,000 back from the government. This brings our total budget to $104,000 for construction while still hitting our $100K goal. That’s at least enough to pay for the purchase and installation of our HRV unit.

Both of these credits run out at the end of 2008. Hopefully they will be replaced with something a bit more substantial, especially for PV and small wind.

I arrived at the topic of this post in a round about way today. It started with a search for the best refrigerator for our project on the energy star website. While we obviously need an energy star model, the range of energy usage ranges from roughly 400 – 700 kWH / year on the energy star chart of refrigerators that would fit our home. While the range is not earth shattering, a difference of 300 kWH / year could end up being 5-10% of a future PV system installed to convert the home to zero-energy status. I found myself looking at fridges from under $1K up to $3K for some of the sleekest and most energy efficient models.

Spending $3K of a $100K budget on a refrigerator just didn’t make sense so I took a step back an tried to look at the home’s energy use as a whole. If we are going to evaluate where we can splurge to reduce energy consumption on our small budget, then we must take a look at everything in the house that is using energy.

A quick search on home energy consumption leads one to this chart from the government. Obviously the percentages will vary depending on the home and the location of the home, but it is easy to see what the priority should be for our budget in terms of energy reduction. I found similar charts in other locations but the big three were alway heating, cooling and water heating. Nothing earth shattering here. Below is the breakdown of energy use in terms of $ spent in the US in 2005:

1. Space Heating – 35.2%
2. Water Heating – 13.1%
3. Space Cooling – 10.8%
4. Lighting – 9.7%
5. Refigeration – 6.6%
6. Electronics – 6.5%
7. Cooking – 4.5%
8. Wet Clean (w/d & d/w)- 4.3%
9. Computers – 1.0%
10. Other 4.3%

There is also and adjustment of 4.1% to total 100% in here that I will not bore you with an explanation of.

This is relatively basic stuff but every once in a while it helps to review and make sure our budget dollars are not being spent on the wrong items. The goal is to spend a large part of the budget on the fundamental aspects of the home like HVAC and passive solar design rather than bells, whistles and shiny things that do not add to the home’s energy efficient performance. Again, finishes can be added and customized by the owner, but the fundamentals are much more costly to modify once the home is built.

Looking at the numbers, we are reminded why we are paying so much attention to the insulation of the envelope and the passive heating and cooling design. Investing in SIPs (or other super insulation), Energy Star windows and an architect that understands the value of passive heating/cooling design are all great investments as they hit two of the top three energy users pretty hard.

By combining our water heating needs with our space heating system, we have automatically added another layer of efficiency. Investing in a consultant to help us design the most efficient water heating system makes sense for this reason also. In fact, this is probably the best place to invest any extra budget monies we are able to extract from other line items. While refrigeration is the largest consumer out of all of the home’s appliances, any significant investment in reducing it’s energy consumption can not compare to one that will reduce the energy required to heat both the home’s air and water.

Next is lighting which will warrant intelligent placement of both lights and windows to keep the artificial lighting demand to a minimum. A possible upgrade will be considering LED light fixtures rather than CFL’s in select locations. At $100-$200 premiums per fixture for LED’s, this can get pricey pretty fast.

The fridge and all other appliances follow and must be considered. Energy Star appliances as well as using the smallest units possible should be sufficient. I have an 18 cubic foot economy fridge in my loft that probably cost about $700 and uses less than around 450 kWH/year based on some quick research. If it was framed a bit better in my kitchen I probably wouldn’t mind it at all.

So the bottom line is that if we are going to splurge somewhere on our design for energy savings, it should obviously be done to improve our heating, cooling and hot water energy demands. Appliances and lighting should be intelligently designed and small upgrades in the amount of a couple hundred dollars may be warranted at a future date.

Right now, the most tempting upgrade to seek is a solar thermal system that has the ability to greatly reduce both our space and water heating demands. This might cost an extra $5K or less if we are a really smart with our internal water heating/storage components. The alternative is to spend this $5K on improving the overall energy consumption in the home and offering the solar thermal system as an upgrade. The benefit to this would be reducing a future PV system cost, but I have a feeling that most people would rather have a solar system as standard equipment, since a PV install is going to be a big decision that will most likely have to be financed in the future when solar incentives return to our area.

Links of note:

http://www1.eere.energy.gov/consumer/tips/home_energy.html

http://www.lyrec.com/Tips/Energy_Use/index.html

http://www.energyright.com/savingenergy/index.htm

Quick post to release the first budget spreadsheet for the 100K House. This will be a work in progress over the next few weeks as we make our final design tweaks.

http://spreadsheets.google.com/ccc?key=p4D0y9XxZM0uDf8vWkh2Vaw&hl=en

I will also add this to our documents page in the next few days.

Yesterday afternoon we had our much anticipated budget review with the entire team for the 100K House. Scott from Level 5 Construction had taken the past two weeks to come up with a comprehensive estimate based on the most recent design of both homes in the project.

I knew we were exceeding our $100K budget with the current design but had no idea if it would be by 10, 20 or even $50K. Scott emailed us the quote about 15 minutes before arriving and the number was $143,600. I was not surprised but was obviously hoping for a slightly smaller figure to start with. We quickly learned that the number was a bit deceiving as about $15K was for the CMU walls in the front and back of the house that everyone quickly agreed needed to go.

Scott came very prepared and had an full page of itemized notes on his top suggestions for reducing the cost of the construction budget. After some discussion, we agreed to accept most of Scott’s recommendations and only passed on a few small items like switching to Vinyl windows or eliminating the radiant heating and ductless air conditioner system. Below are the main points we agreed to along with the corresponding budget reductions:

1. Starting budget = $143,600
2. Eliminate both CMU walls in front and back of the home -$14,800 = $128,800
3. Eliminate the sloped, metal roof in place of a flat, rubber roof with cool, white coating – $4,200 = 124,600
4. Eliminate plywood on the core of the house – $2,000 = $122,600
5. Eliminate the half bath on the ground floor – $1,600 = $121,000
6. Eliminate the Patio/Deck on second floor – $1,500 = $119,500
7. Reduce the footprint to a true 1,000 square feet – $20,000 = $99,500

This looks pretty not bad except for a minor detail I left out. The figure does not include the kitchen cabinets or appliances since we have not spec’ed them out yet. We are figuring this will be around $10K extra so we still have some cutting to do.

While we were discussing, Brian sketched a simple diagram of the new design that reflected the major changes we had agreed upon.

As you can see it indicates the new roof, a slightly smaller footprint and a loss of our double height space. We have left an opening at each end of the house between the first and second floor to facilitate natural air flow in the home and to let heat freely flow from the ground floor radiant system to the second floor. This detail needs to be fleshed out more, but we all agreed it was necessary. A couple options thrown out were a two foot opening with a full railing on either side, metal grating over the gaps with no railing and random, small holes drilled into the floor in the 2′ section on either end of the second floor. Oh, we also had an idea for a built in bed with air vents underneath.

Let’s go back and look at some of the cuts we made again as some were easier than others. The CMU wall was easy and we all agreed it had to go as soon as we heard the figure. The figure is high due to the need to construct footings under the wall in order to support the weight. I also agreed that postgreen would foot the bill for all landscaping outside of the $100K budget as it is not integral to the case study. The landscaping will vary according to location and owner taste and was never intended to be part of the $100K budget.

The roof was more of a struggle. ISA was very hesitant to see both the structure and the material of the roof fade from the design. It added a much needed architectural element to our otherwise boxy home that we will need to make up in other ways. The standing seem metal was estimated to cost roughly $10psf to install which I thought was a bit high but it was clear that the combination of the slope and material were going to cost thousands that we could not justify. With a flat roof, there was no need to hold onto our premium material so we reverted back to our standard Philly rubber roof with a white coating that will still earn us LEED points. This will also allow us to easily send the water to the back of the home where it can be better utilized in a low-cost rainwater collection system to irrigate the rear garden area. Since the standing seam metal also was used on portions of the facade I am hoping that we can gain more than the estimated $4,200 cost reduction once we look at a revised plan in more detail.

The plywood on the core was a slightly easier negotiation, but it is still another architectural detail that is hard to let go of. Everyone agreed that we do not want to cover the plywood with some type of a thin veneer to achieve a similar effect as that is just adding cost for aesthetic reasons only. We can look at differentiating the core with a different paint color which will not add any material or labor cost when we look at the interior design in more detail later in the process.

I agreed to let the half bath go quickly and no one objected. The more I thought about it, a half bath seemed like an unnecessary luxury in a minimalist home that would most likely be home to only two people. I was impressed to see that Scott had estimated this to be a low cost reduction as he had taken all aspects of the efficient design into account. There are many contractors that would quote a half bath at $5K in Philly regardless of the layout or design.

The deck/patio was also my choice to eliminate and I hope to gain more reductions by replacing the sliding patio door with more cost and energy efficient windows. We have discussed decks before and while buyers like them when walking through a property, they are rarely used in Philly rowhomes unless they are very large and/or have nice city views from the roof. Ours was met neither of these so we will focus more of our effort on the rear yard where people will spend much more time.

Reducing the overall footprint is something we have spoken about before and took much of our time to figure out. We have been touting a 1,000 sf house from the beginning and the square footage has slowly crept up to over 1,200 sf since we started. We also had a large double-height space which is neither cost-effective or energy efficient. By cutting about 200 sf out of the design we agreed that the living quarters of the home would not suffer too much. All of the space will most likely be taken from the very large open space in the front of the current design and the second floor may go untouched. We will need to play with the layout a bit more to make sure we utilize the smaller layout on the first floor to the greatest potential. We may even end up with the original core idea that we started with where the kitchen/utility core lines up with the second floor bathroom core to make it appear that it is one piece dropped into the home’s shell.

In the coming weeks we will continue to tweak our design and numbers until we hit our goal on paper. I think there are still some savings we can get from the exterior cladding, window configuration and mechanical system that need further investigation. We are also pursuing SIPs due to multiple quotes in the $15K range that may  allow us to come in lower than traditional stick framing and insulation. Scott has graciously agreed to entertain this option again after I told him we would most likely pass due to cost and unfamiliarity with the system in Philly.

That’s it for now. Feel free to give us feedback on our cuts and tell us if we’ve gone too far in any direction…