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BS* + Beer

The Economics of a Pretty Good House

A discussion on how to realistically prioritize your budget in a Pretty Good House

This episode of the BS* + Beer show is the first in a series of topics based on Pretty Good House principles. This week the group talks about economics: How do we make decisions on where to save money and where to spend money? What is a reasonable return on investment and how do you calculate it? Should we think about up-front carbon emissions in the same way? Watch the replay and let us know what you think in the comments.

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The next show is on June 1, 2023, from 6-7:30 p.m. ET

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  1. gstan | | #1

    This subject is of great interest to certain groups, builders of course, architects and
    designers, and DIY homeowners. Unfortunately, all of them combined constitute an
    extremely small fraction of the total population. The general population expends a huge
    amount of time and energy blathering about the economics of housing and then buys
    based on neighborhood, current aesthetic trends, and their perception of status - wish
    it were otherwise!
    The recent trend in building codes is in the direction of increased energy efficiency. This
    tends to force improvement in housing economics - crudely and inefficiently but better
    than doing nothing, Wish that force were not required, personally despise bureaucratic
    rule imposition but so far viable alternatives are exceedingly slow in effecting change.

  2. kewilso3 | | #2

    Great discussion as usual. When the panel members in these discussions say that building a PGH doesn't cost more, or that it is up to maybe 10% more, are they really comparing to a code minimum house? Or are they comparing to an already custom, architect designed, home with engineered systems? I'd be curious to know the lowest cost/sf PGH any of the panelists have built since say 2021.

    It seems to me that many of the upgrades or changes in technique would not cost much more, except that the builders willing to execute these details are only executing higher end, or higher budget, builds. This may be a case of living in a warm climate that doesn't have very strict building standards, so we have a lower starting point and most PGH techniques are unheard of.

    In my area, central NC, an entry level spec home with vinyl siding can be had for $200-250psf. A semi custom with fiber cement $250-300psf. Those include land. Then there's a jump for custom homes where I haven't found anyone building under $350psf, with similar materials to the semi-custom homes, and that's without the land cost or design included. Are these the builds being used as a baseline cost? I could see paying a 10% premium from there, if the right builder could be found.

    I think the theory is sound, it's just a steep uphill battle in reality. Like gstan said, the vast majority of customers and builders don't care. Hard to blame them when cost is the driving factor for most Americans.

    1. Expert Member
      Michael Maines | | #3

      PGH isn't a specific set of targets it's impossible to say how much more "building to PGH" would cost; PGH is a philosophy. It doesn't cost extra to build a simpler shape or to build smaller than average. It does cost money to add a ventilation system, and natural or low-VOC materials can cost more than other options.

      None of the panel members design or build entry-level homes. The new homes I've designed in recent years, all following PGH philosophy (though some may not look like you think a PGH should look, they are smaller, simpler and higher-performance than their neighbors), cost between $250/sf and $500/sf. Land costs for those projects varied from free to $1.8M, which is also why you should be suspect of square foot pricing that includes land. Again with those projects it's impossible to say what a non-PGH version would cost, because it would be a completely different house. The local architects I sometimes compete with, who are designing attractive homes that may meet code-minimum performance at best, are finding $500 to $1k per square foot building costs.

      I disagree with the assertion that people don't care what it costs to build a high-quality home. My colleagues and I are all as busy as we could possibly be designing and building high-quality homes for people who care very much about what they cost. Some people may not care about things they don't understand, such as why an ERV costs more than a bath fan, but once they understand, in most cases they want the better option.

      1. kewilso3 | | #4

        Great points Michael. It's hard to articulate these thoughts in this format, so my apologies for potentially sounding combative. I guess in my mind I was thinking of what I would consider non-standard construction changes as the points that drive cost. The size and shape of the house is easy to change with most builders. Building a simple form is better than not, and so by that standard, building better is cheaper.

        Things that add cost- Air sealing, above code insulation, advanced framing, insulated headers, proper flashing, site planning, HVAC calcs, ventilation systems, any insulation besides fiberglass batts, any framing beyond 2x4, shade calculations, plumbing plan, more environmentally friendly materials... and these all require a more dedicated builder, who will typically charge more across the board. Should many of these practices be standard? Yes. Are they? No. I think the goal is to make them standard, and I love the push for that taking place here.

        I think I'm just coming from the typical build around here, which comes from a simple pre-made plan that is then built to code minimum. Starting with the idea that the house will be designed by an architect, have engineers involved, commissioning, etc, you're at a much closer starting point and 0-10% added cost sounds very reasonable.

        I'm not sure I said people don't care what it costs to build; I think I'm mostly saying the opposite. I care very much about the issues covered in PGH, but I am considering going code minimum (the new green) because of cost. I may just stay in my 1948 millworker house, as that's probably the most environmentally friendly thing to do. BTW all the old houses on my street have 4 corners and a single roofline. Try finding a new build like that; hard to do.

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