Family moving boxes into new or remodeled house

Whether you’re a developer, homeowner, or business owner, you may have heard the terms “ground-up construction” and “remodeling”. While some differences between these types of projects may be obvious, each has unique nuances that require different approaches during design and construction.

If you’re familiar with ground-up construction but not remodeling, or vice versa, take the time to understand how these projects differ in terms of design flexibility, financing options, permitting, construction, and building functionality. This knowledge will help you plan your project well and avoid costly surprises along the road. 

1. Design flexibility

In a ground-up project, the design is shaped by the building’s functional requirements, code standards, local bylaws, budget limitations, and the owner’s vision. The design team is free to operate within these constraints, and this creative freedom means a great degree of design flexibility.

When remodeling, on the other hand, a building’s existing configuration becomes a critical factor. Current structural, architectural, and mechanical, electrical and plumbing (MEP) layouts must be planned around, imposing significant limitations on the project’s design. Not to say that altering existing elements is out of the question; it is possible, but may add significant costs and complications to the project.

To understand the significance of a building’s existing configuration, consider a single-family residential kitchen. If you’re building one from the ground up, you can locate fixtures and appliances to best suit your functional needs, then plan an efficient location for the MEP services. When remodeling, considerable relocation of the same fixtures and appliances will entail a rerouting of the ducts, wires, and pipes that serve them, which can be much more difficult and more expensive to accomplish. Thus, unless the budget is of no concern, your remodeling design will be bound to the present location of these services.

 2. Financing options

 Remodeling projects and tenant improvements are often easier to finance than ground-up construction. Typically, they cost less, which means that you may be able to pay for them, at least partially, with cash. Failing that, there are equity lines of credit, personal unsecured loans, and construction loans to help you obtain the funds. If your project doesn’t disrupt your building’s functions too much, you may be able to do it in phases to reduce its impact on your cash flow and to minimize borrowing.

Ground-up construction costs more and does not afford the same schedule flexibility as a remodeling or a tenant improvement project. For these reasons, your options will be limited to using cash or taking out a construction loan. The latter can be difficult to qualify for, demand higher interest rates, and is due in full once construction is complete. Click here to find out more about your construction financing options.

3. Permits and approvals

Whether you’re building ground up or remodeling, there’s no escaping permits. You will need a separate one for all demolition, construction, mechanical, electrical, and plumbing activities. If the remodeling project exposes previously unpermitted work, you will have to apply for a retroactive permit, and potentially bring the work up to current code standards.

Besides permits, most ground-up projects require approvals from the planning department and other local and statewide regulatory bodies. Because obtaining these permits and approvals may take a while, your project may endure months of waiting and multiple revisions before all relevant agencies give you their green light. Additional permits that you may need with a ground-up project depending on the jurisdiction and scope of work include stormwater management, buried utility, and right-of-of way encroachment permits. When remodeling, you’re unlikely to need approvals unless your project changes the building’s use, its footprint, or drastically alters its exterior appearance.

City building for submitting permit application for home remodel or ground-up construction

4. Construction

Unexpected conditions can derail ground up and remodeling projects. With new construction, most surprises are caused by poorly understood site conditions, supply chain issues, misinterpretation of design requirements, and adverse weather. With thorough planning and proper project management, most of these factors can be anticipated and their impact reduced.

In remodeling and renovation projects, surprises are more difficult to foresee. Without invasive investigations, some conditions may go unnoticed until they emerge with the first swing of a hammer. Examples of pivotal existing conditions include rot, termite damage, and previous defective work. In older buildings, renovations may also expose asbestos, lead paint, lead pipes, outdated wiring, and hazardous structural conditions, such as the lack of seismic bracing or crumbling foundation walls. To mitigate the financial and schedule implications of unforeseen problems during remodeling, the project’s budget should contain a sizeable contingency - money held aside in reserve to aid when above mentioned unforeseen issues arise. Contingencies are typically budgeted as a percentage of the total estimated cost of the project. Most projects, whether ground-up or remodel, have a contingency; however remodel projects may require a larger amount due to the higher level of uncertainty.  

 
A new custom home project done by Design Everest in San Bernadino
A new custom home project done by Design Everest in San Bernadino
A new custom home project done by Design Everest in San Bernadino
A new custom home project done by Design Everest in San Bernadino
5. Building functionality

All construction projects interfere with a building’s functions. With ground-up projects, it’s not much of a concern as the building is unoccupied until construction is finished, all systems are commissioned, and the final inspection is performed.

Most remodeling projects, on the other hand, take place in occupied buildings and the ensuing disruption of functionality must be anticipated, planned for, and controlled.

The magnitude of the disruption depends on the type of building, and the scope of work. For example, remodeling a kitchen in a single-family home may force the family to eat out for the duration of the project - a minor inconvenience if the family planned for it. In contrast, renovating the inpatient wing of an acute care hospital would entail the relocation of patients, clinical staff, equipment, and services. Such a complex procedure carries an immense financial risk for the general contractor performing the work and takes a lot more expertise and head-scratching than constructing a comparable building from the ground up.

The functionality of the building is not the only consideration when comparing a ground-up project with a remodel. The function of the community may also play a role. For example, a ground-up single family home construction in the center of a nearly built-out dense neighborhood will impact noise pollution, traffic and  cleanliness, and could make for a bad impression with new neighbors if not managed well. Alternatively, a remodel is usually much less disruptive for the community and can go nearly unnoticed.

How We Can Help

Whether you’re planning a ground-up project, a renovation, or a remodel, efficient construction starts with thorough planning and quality design. Our engineers at Design Everest have +14 years of experience with various types of projects in California and can lend a hand to help make your project a success. Contact us now and we will provide you a FREE Consultation with a quote. We also provide virtual on-sites and virtual consultations.

Sources/References:
  • https://designeverest.com/groundup-commercial/
  • https://designeverest.com/services/new-custom-home/
  • https://designeverest.com/residential-remodel-and-addition/
  • https://designeverest.com/blog/determine-construction-budget-and-financing/

*Note: The content published above was made in collaboration with members of Design Everest.

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