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Adding value to residential development design

The value-added designer is a buzz phrase thrown out to developers during the interview process that sounds great. However, it may not have true meaning unless we itemize the reasons for value-added and how it affects the developer’s bottom line.

Value engineering is reviewing the different design alternatives and discussing with the owner ways to maximize the profits. What can be classified as successful design? Most often it is design meeting these criteria:

  • The lots are saleable
  • The time it takes to sell the lots is minimized
  • Maximizing the number of premium lots maximizes developer profits
  • Profits are maximized while construction costs are minimized

What adds value?
In real estate terminology, value-added lots are those lots the developer can classify as premium lots. These are the characteristics of premium lots:

  • Walk out basement
    This takes into account the natural terrain and provides for a front to back sloping lot that allows the home builder to build a house with a basement exit at ground level.
  • Isolated back yard
    The layout of the lot results in a back yard being located so that the home owner would not have a neighbor’s back yard adjacent to their back yard. The layout of the subdivision takes into account adjacent terrain that would not allow for lot locations because of conditions that would not allow for future development. These conditions could include storm drainage paths, public property (such as parks or walking paths), golf course fairways, natural bluffs or land being donated for public use.
  • Treed and forested property
    Mature trees add value to the lot, and design should take saving the trees into consideration.
  • Viewed lots
    An important factor in a homeowner’s purchase is the view from inside and outside the home.
  • Quiet lots
    When we relax or entertain in our yards, it is important to have buffer zones to help reduce or eliminate noise from roadways, railroads and commercial property.
  • Location in relationship to schools
    A premium lot would be located within walking distance from schools and shopping without conflicts resulting from vehicular traffic.
  • Location in relationship to roadways
    Collector streets and arterials should provide easy access to routes for work and shopping.

An engineer’s role is to assist the developer in identifying property that meets as many of the above criteria as possible to achieve a successful project.

Adding value, reducing costs
On one of my earlier projects, I convinced my client we could reduce project costs by minimizing the earthmoving on the site, if we took an additional 30 days to look at several project design alternatives. At the end of those 30 days, the value engineering resulted in $740,000 in construction cost savings. The 100-unit development sold out in 9 months.

As I reflect on past residential development plans for housing projects, it is evident that it is easy for projects to move from being affordable to non-affordable by allowing project costs to get out of control. The engineer has a financial responsibility to the developer to get a clear understanding of the goals for the community being developed. Those goals must be incorporated into presentations with the governing agency so that everyone is headed in the same direction.

About the author

Bob is our account executive in the Government market. He has nearly four decades of experience in municipal engineering and development in rural areas, small towns and larger cities. He brings a wealth of expertise to help provide ideas that lead to long-term solutions for our clients.