Understanding The Expensive FEMA 50% Rule

If you are remodeling your home or live in a flood-prone area, then you might have heard of the Substantial Damages and Substantial Improvements, aka, the FEMA 50% rule. Even if you haven’t, it is good to have an idea of what the rule is, and how it might impact you as a homeowner. 

While most people worry about fire as the main threat to their home, residential structures are nearly three times as likely to experience flooding over a 30-year mortgage period if they are in a high-risk area for flooding. With a danger like that, it is a good idea to familiarize yourself with one of the most important rules you may encounter while remodeling or repairing your home. 

Flood Zones 

To properly understand the FEMA 50% Rule, it is important to first understand the areas it is applicable in—namely, officially designated Special Flood Hazard Areas. These are areas with a 1% annual chance of experiencing a flood. Within this zone, the base flood elevation (BFE) is used to describe the elevation at which that 1% chance would occur. All of this is calculated by the National Flood Insurance Program (NFIP), a voluntary federal program that provides communities with affordable flood insurance. 

The NFIP was founded with the principal goal of offering insurance assistance to those residents in participating communities, but also to help mitigate the risk of repeated flooding and the resulting damage. This is achieved through two conditions: the Substantial Improvement requirement and the Substantial Damages requirement. The application of these two concepts is where the FEMA 50% Rule comes into play. 

Understanding The Expensive FEMA 50% Rule
Miami Dade County Flood Zone Map

FEMA 50% Rule Explained

The basics of the FEMA 50% Rule are as follows: if any repairs or renovation to your home are estimated to cost more than 50% of the home’s value, then you are required to bring the building’s structure into compliance with flood damage prevention regulations

This is the meaning of Substantial Improvements and Substantial Damages. If the cost of repair or improvements is over 50% of the home’s value, then it is substantial. And, if this isn’t done, then the home can’t be ensured. 

It sounds simple enough, but there are some additional caveats that can complicate the process. For one, your home’s value needs to be assessed by local officials responsible for floodplain management. The minimum value can sometimes be below 50% as well if local ordinances make that decision, and the value of land isn’t applied to the assessment. 

Another caveat is the Substantial Improvement Timeframe. Depending on the local authorities the total cost of improvements within a timeframe counts towards FEMA's 50% Rule. This timeframe varies greatly and can be from a year to almost a decade.

So, what happens if you need to bring your home into compliance with regulations? 

Well, there is the potential that your home will need to be elevated to above the BFE plus a freeboard depending on local authorities and codes. This applies to all residential structures that have their first floor below the BFE. Depending on local ordinances, parking, building access, and some variations of storage may be allowed below the flood line.

What does this mean? 

Elevating a structure a few inches may be plausible within a budget, but would probably reduce ceiling heights. However, the costs to elevate the interior floor to anything above half a foot may significantly increase the Hard Costs of your project. Most of the time, the cost is so significant that knocking down and building something new may give a return on investment.

Case Study: How to Calculate in Miami-Dade

While flooding is a danger across the US, it is coastal regions that are often the most associated. For this reason, Miami-Dade County serves as a great case study on homeownership and the FEMA 50% rule. Or, perhaps more accurately, how this area enforces or gets around the FEMA 50% rule. 

In the county, all new construction or substantial changes to existing structures must receive an Elevation Certificate from the county. If the house is lower than the required elevation, it is subject to the FEMA 50% rule. Homes built before 1995 may require a surveyor for a new Elevation Certificate, those built after 1995 will have their Elevation Certificate on record. 

The easiest way to know the substantial improvement cost limit is to search the property at the Property Appraiser's website and look for the Building Value and multiply it by 50%. But be aware that other improvements may have been made during the SI timeframe period.

The steps to do a complete assessment for your particular property would look like this:

Fema 50% Rule to slowly rise the general level of a home that will be renovated.

More information on this and other county regulations can be found on the Miami-Dade County government website. Most counties in the US will have a website dedicated to flooding regulations, and a simple search using this term and your country name will typically bring up an official website with all the information you need to ensure your residential structure is up to code.

Understand Hard Cost vs Soft Cost for a Successful Project

Hard Cost vs Soft Cost

Hard Cost vs Soft Cost are two basic terms commonly used in the Proforma of a project to separate two distinct categories from the development's total budget. 

In any construction project's proforma (project budget), you should find a total Soft Costs line and another of Hard Costs. Both terms can be confusing, and while the definition is clear, in practice, the line separating them can be blurry at times. Furthermore, the proportion between both varies on each project.

The difference between both terms is sometimes blurry due to the included items in the General Contractor's budget. For instance, subcontractors' sub permit fees, such as plumbing work, are paid by the General Contractor and included in his estimate, therefore added as part of the Hard Cost section. It's rare and unadvised to split the GC's budget in soft and hard cost - unless it's a Design-Builder.

Hard Cost

As mentioned previously, Hard costs - for the construction industry, are all those expenses directly related to the physical construction of a project; materials, fixtures, construction labor, shipping, etc. 

CMU construction hard cost vs soft cost examples
© Pablo Allamand, AG General Contractor

Hard Cost Examples:

In a preliminary Proforma, Hard Costs are usually broken down into the building construction itself, built over the site, and the Site work and landscaping work varies depending on the site itself. A larger lot will require more landscaping and Site Work than a smaller one.

Soft Cost

Soft Costs for the construction industry, on the other hand, are costs indirectly related to the construction of a project, but no less relevant as they are necessary for the project development such as the design, legal, financing, and administrative expenses. Most Soft Costs are performed before breaking ground as they are the first steps to develop a project.

Soft Cost Examples:

Blueprints hard cost vs soft cost example

The Soft Costs of a project can vary immensely due to many factors such as the development type, size, use, location, etc. As most Soft Cost expenses are made in the initial phase of a project –the Design phase– accurately defining these costs at the early stages is critical to a successful and stress-free project. In-depth research is always recommended, such as a Feasibility Study, before committing to a full design team without a completed analysis of the Scope of Work.

Hard Cost vs Soft Cost in a Proforma

This article covered essential points and explained the most significant differences between Hard Cost vs Soft Cost. However, they can quickly become more complicated than anticipated. The examples listed are not the only expenses you may encounter as we can't assume every issue or condition a project may face.

When preparing a project's Proforma or Project Budget, these lines should always be present. However, and without adequate research on the project's requirements, needs, and wants, most numbers will be difficult to pinpoint.

We will always recommend starting a project with in-depth research such as a Feasibility Study. Check out what this study includes or contact us for a free Guideline Session, and start with your project with the right foot!

Increasing your Home's Value with 11 Renovations

Whether you are looking to sell or refinance your home, increasing your home's value should be your first step. In the following article, you can find some renovation projects you can do yourself or with a professional that will increase your home's marketability, value, or both!

The trick is knowing and implementing the right balance between the cost and return on investment of the specific renovation project.

Start with some research and get professional advice. Bring in a Realtor or Architect to evaluate what renovations have the best Return on Investment (ROI) for your home (whether it's with an increase in value or marketability). Realtors will probably visit for free if you sign the listing with them. An Architect or Interior Designer will likely charge you a Site Visit fee ranging between $150 and $350.

With the expert on-site, you should be able to discuss what renovations would be better for increasing your home's value.

Increase your Home's value with Small Renovations projects

Some small renovation projects may increase curb appeal and marketability or home's value overall. They usually are easy, cheap, fast to do, and, most importantly, most don't require permitting with the building department (at least in the Miami metro area).

1. Start with a deep clean-up plus declutter your home. Additionally, hire a professional window cleaner. These tasks are critical to do before potential buyers come to visit your home. It shouldn't cost much, and the return is immensely superior.

2. Hire a painter to patch any visible holes or dents, and paint your walls with a light gray color. Light-gray walls are preferred by almost 80% of buyers, and it will also make space feel bigger and have a more neutral, contemporary finish.

3. Hire a pro to change carpet floors to hardwood or some modern looking porcelain tiles. (If you live in a condo, this will require a permit and soundproof). Even newly cleaned carpets have some visible use or stain, and most buyers will want to change or replace it, ultimately lowering their expected value of your home.

4. Change kitchen cabinet doors. Most kitchen cabinets are modular and have a standard door size. If this is your case, then this DIY project is a low-cost, high-return investment. If, on the other hand, yours have a non-standard size, you can always try painting the existing ones instead or try contacting the manufacture to ask for a replacement quote.

5. Install new granite countertops on your kitchen, if you have laminated ones. There are plenty of pros offering this service, and it dramatically increases marketability.

111 Terrace Single Family Modern House increasing value with kitchen renovation
111 Terrace Kitchen countertop and Cabinet doors

6. Upgrade appliances with new stainless steel finished appliances. This project is particular to each case and the visible conditions of the appliances. We recommend discussing it with your expert.

7. Reglaze tub and regrout wall tiles on your bathrooms. No need to replace an old-tub when reglazing makes it look like new adds value and is less pricey than a full replacement. Regrout the tiles on top of your tub for a great combo-effect.

Bigger Renovation projects

More significant renovations involve space modifications, architects, and permitting. However, when done right, they add considerable value to your house.

8. Remodel and open up spaces. One of the biggest design trends in the past year are open spaces. You will require an Architect, although we always recommend hiring one at least for just a consultation. In addition to increasing your home's value, opening up the kitchen, living, or dining areas also gives more light and a bigger feeling to these spaces, not to mention the contemporary feel.

445 Solano Prado Modern House Living
Open Space of 445 Solano Prado

9. Replace entry doors and Garage Doors. Most visitors overlook exterior doors unless they have bumps, scratches, have clear signs of use or similar. They then become immediately noticeable, which in turn reduces your home's curb appeal. The variety of impact Garage Doors has dramatically increased during the last few years. A new modern looking door can, in turn, increase your home's curb appeal.

Increasing your Home's Value with 11 Renovations
Copay's Garage Door at Christopher Kennedy Compound

10. Replace old windows for impact windows. Today, Impact windows are a must on most buyer's checklists. In addition to increasing the value of your home, they might help reduce your insurance fee, energy consumption, and improve acoustic insulation. According to the Cost vs. Value report of 2020, it will yield a 73.4 % ROI.

11. Go Solar, get your tax credit, and save on your monthly energy bill. We recommend asking a solar panel expert who will be able to advise you on the financial side and the permitting and installation part of it.

One last thought

Whatever the remodeling project you would like to do, get advice from an expert. It would be best if you started by contacting a realtor, Interior Designer, or, better yet, an Architect. Look for someone who knows about the market trends in your area and the potential costs of renovations, and that can give you advice on how much you should invest and what the ROI would look like for your particular case.

Also remember that mayor changes, such as replacing kitchen cabinets (not doors) or exterior doors and windows, require a building permit. In some cities, these permits are quick one-day application, but you need them nevertheless.

If you aren't sure how or where to start, download our free Project Planning Pack guide or apply for our free 30-min Guideline Session. In this session, we will discuss your home situation any roadblocks you might encounter and prepare a roadmap for your next steps to successfully increase the value of your home with a renovation project.

What is BIM? 4 Reasons why it's important for your Project

BIM refers to "Building Information Modeling." What is that? It's an intelligent 3D modeling process that allows architects and engineers to virtually build your project before any work begins with various Softwares like Revit or ArchiCAD.

This process gives them advanced tools to coordinate and integrate all the systems that your project will have, like mechanical, plumbing, and structural elements.

The modeling begins in the early stages of a project, either in the Feasibility, or Schematic Design stage. It goes through permitting and construction, and, if used while operating the building, it could potentially never end.

How it Works

3D BIM model with plumbing and mechanical systems
BIM model with Mechanical and Plumbing systems placed to understand any potential conflicts

When architects moved from handrawn plans to CAD, it would have seemed like everything was similar, but just on a computer. CAD is, in fact, very similar to hand drawing. You draw lines, some are thicker than others, and some in a particular angle. Usually, the first draft has all drawings neatly coordinated and consistent. However, with the first revisions, the drawings may show errors in coordination and consistency, which is bad for the construction in the long run.

In a BIM process, each element that composes the 3D model contains different information and parameters. These elements later show the same information in various views or perspectives in a coordinated way.

The difference with CAD

Let's take a door as an example. In a CAD file, it would just be lines drawn to a specific width. If later changed in the floor plans and not in the elevations, door schedules, or sections, then the set would be uncoordinated. Imagine the contractor ordering the wrong windows because he read it from a non-updated door schedule. That avoidable mistake will cause you, the Developer, time, and money. Now, imagine that the door isn't the only change made to the project. With a BIM model, on the other hand, that door will be modified, and automatically updated in all the sheets and views of the set.

How does it benefit you, the Developer? (or Owner) 

Compared to other processes, BIM has valuable benefits for your project and return on investment. We've already gone through a few, but if those didn't convince you, the following should.

You can visualize the project and make better decisions

The 3D model allows you to be better involved in the design process as you can accurately and instantly visualize the project from or to any angle you would like. CAD, on the other hand, must be drawn before seeing what how would look.

Furthermore, you have information about every element of the project. Walls, door, windows, roof, slabs, floors, driveways, grade elevations. And interior items like bathroom fixtures, appliances, or even furniture. Every element may have specific information and looks that help you make decisions to understand or expect the outcome of your project.

Critical conflicts discovered in the BIM model
Peer reviewing a project made with CAD drawings and redone into BIM, shows clear conflicts between systems

Fewer Mistakes and Risk Reduction

Digitally building your project before groundbreaking takes much of the risks out of the construction - when the cost of making changes is enormously higher - into the design, where changes are inexpensive. The digital structure allows us (architects) to check any clash or conflicts between the different systems of the project. 

Reduced Construction Time and Cost

With fewer mistakes comes faster work and lower cost. As explained before, the cost of changes during the construction is enormous in comparison to making it in the digital building. 

Some might argue that any design mistakes should be taken care of by the Design Professional. While that may be true, they are often limited to the cost of redoing or fixing whatever mistake made. However, it doesn't account for the time lost in stopping the work, repairing or repeating it, and the inertia to start again, not to mention the wasted time and money in lawyers. We all know that time is money.

Better Return on Investment

For a Developer like yourself (even for future homeowners), fewer mistakes reduce risks. Consequently, the return on investment, on paper, is sturdier. Marketing elements for sale purposes are easily created as they are usually very similar to the final product. In other words, it is essential to find an architect that uses BIM throughout all the development process! (design, permitting, building and operating) 

The bottom line

A BIM model can be used for multiple purposes or phases, from schematic design with the analysis of different visualization options to the construction documents, with details, and specifications including model, manufacturer, color or materials. 

It helps to reduce risks by lowering errors in the plans as it automatically updates schedules, drawings, and elevations throughout the project, and it quickly identifies conflicts between systems. All of which may bring higher costs if not taken care of before construction.

While it might be true that an Architecture firm using BIM may be more expensive than another one that isn't. But in the long run, it isn't. Great CAD working Architectural firms take their time checking that their plans, schedules, elevations, sections, and specifications are all consistent. Still, they charge for that premium. In our experience (doing peer reviews), low-cost firms usually can't afford that extra time CAD drawings require to coordinate the project's systems and elements. This cheap upfront cost will reflect into a costly construction cost in the long run, due to change orders, mistakes, and wasted time.

So, how important is it for a smart Developer (or a future Homeowner) like yourself, to hire an Architect that uses BIM as part of its standard services? Very! For the sake of your Return on Investment.

Effective Changes for Residential Developments in Miami due to Covid-19

While we are currently living in the middle of the pandemic with record-breaking daily new cases and deaths, we must be even stronger to keep our distance and at home to avoid the spread as much as possible. 

Whether voluntary or not, the quarantine has brought us a new normal, which we've already heard and lived many times during these last couple of months. But what has this meant for the Residential developments in Miami? Or any place? How has the pandemic affected building permits, construction, planning, or even selling our projects? Let's take a look back at it, each of them.

Design and Planning Residential Developments in Miami

The program for residential developments in Miami has changed. A home Studio or Office is now part of the basic program new constructions or remodelings or at least the flexibility to transform a room into one. Common interior areas of each unit have also become more critical as we are now spending so much time inside. Not only the way we draw and document projects have changed, but also what we include in the design.

In addition to the design program, we've noticed a few other aspects in or day to day work that changed during this time:

Site visits, meetings are more limited than before, and mostly done remotely. While it's arguable better for the professionals and clients as we waste less time moving around, we do have some loss against in-person looking. 

Design collaboration is vital. While paper initial sketches are hard to kill, it's been a while since all design ends up drawn digitally, or better yet modeled digitally (BIM 3D Modeling for instance). Today not only are we building virtually, but we are also doing so collaboratively and online. 

Most in-person project presentations with multiple printout copies are now fully digital and remotely given, which means that our presentations must consider the digital format and screen sharing methods. And as a side benefit, fewer printed papers that end up trashed anyway, which is good.

Document sharing and online collaboration suites, while not new, they were - at least in the design industry - poorly used for document and report preparation. Today it has never been more important to share a folder online with tools such as Dropbox, Onedrive, or an office NAS.

How the pandemic changed Building Permitting

Building Permitting is probably the most impacted part that the pandemic has brought to Residential Developments in Miami or any project for that matter, with the implementation of Digital Plans and online submittals.

Digital plans allow reviewers from many departments to study the projects at the same time. In the traditional paper-submittals, each blueprint set arrived at a department, had for the corresponding review, and then sent to the next department until the cycle ended.

Today, many Building Departments stepped up their transition to an online/digital plan submittal and permitting. Some didn't even have them in their plans before the pandemic and made the transition anyways. 

Here are what some cities in Miami-Dade county have done:

Building the project during the pandemic

Construction work cannot be remote, we know. How can you lay bricks, mortar, or shovel remotely? But that doesn't mean it hasn't been somehow affected with the pandemic.

Any construction in Florida requires inspections during the building. These inspections always take precious time in our Gantt chart as they are as unpredictable as possible. 

When scheduling an inspection, most of the time, the inspector comes the day they say, but you never know what time, and sometimes you wait all day only to discover later that they pushed the inspection for the next day.

With the pandemic, many cities have resolved to do virtual meeting inspections with a video call. While it was a mess at the beginning, when inspectors and contractors took ahold of it, it got more comfortable than ever to pass small inspections, assuming there is enough cellphone signal at the site.

These video-call revies, start with a hard to miss, day and time schedule assigned only to the project. It doesn't matter the inspector's route, traffic, or car breakdowns anymore; contractors will get that call at the scheduled day and time. While more significant inspections still require on-site visits, this saves time for the least complicated or smaller reviews.

What about selling the project?

Virtual walkthroughs and 3D picture cameras and software such as Matterport are slowly flooding the internet and Real Estate selling process platforms. With these applications, you can look around the property and practically walk between rooms.

Credit: Matterport

The bottom line for Residential Developments in Miami

In the end, this new normal has helped residential developments, in general, to push forward the inevitable electronic and digital world we now live in. There hasn't been a new - breakthrough - technology during the pandemic, only the need and the pressure to use what we have more effectively.

Between all the pain, deaths, and economic disaster that the pandemic left us with, there is some good, and we should embrace it. Electronic plan submittals save us up to 5 times more time than paper-only submittals. 3D walkthroughs help developers sell and reach even more potential buyers or renters. And, video call inspection wasn't even in the minds of building departments, and now a daily routine.

With these "New Normal" tools that the pandemic brought to residential developments in Miami, we don't only move faster; we move more efficiently. And the bottom line will end up reflecting it if we think out of the box and accept the changes.

"In the midst of every crisis, lies great opportunity."

Albert Einstein

How to obtain a Building Permit in Miami

When you think of a building permit, do you imagine bureaucratic paperwork, similar to obtaining your Driver's Licence or passport for the first time? Well, in summary, that precisely what it is, with the difference that it will allow you to build something. Although, its also much more complicated.

Here we'll guide you on how to get a building permit in Miami (or at similar locations).

When to obtain a Building Permit?

A building permit is an official approval issued by the local authorities in which your project is located, and required for safety and compliance of the building code, zoning code, fire code, and many others. 

The process will look into many aspects of your project, such as structural integrity, minimum spacings, zoning and planning conformities, water and sewer capacity and lines, safety to its inhabitants, among many others. 

In most cases, you'll need to obtain a permit. The most obvious reason is when building a new project (home, building, construction). Furthermore, anything from a kitchen or bathroom remodeling to home extensions or changing a roof, window, or exterior doors will require a building permit. Check out City of Miami Building Department page for more information.

It might be easier to say when you don't require a permit, but that too might vary from municipality to municipality, or even between communities. More on that coming up.

How to get a building permit?

Understanding that you do require a permit, the process is pretty straightforward anywhere where it's required. Submit plans and documents to the authorities. They'll review them and, assuming they don't have objections – which they almost always do; give you a permit. Yay! Sounds easy, right? Not quite. 

As mentioned before, the process looks into many aspects of your project. Depending on the type of it, it will require more o fewer reviews and reviewers.

Note: If your project involves New Construction or Extension, you should start looking for an Architect. A good Architect will hear your intentions, evaluate your site, and let you know all the requirements. In Miami-Dade and Broward, you will need an Architect to submit plans for a New Construction by code.

On the other hand, if you are looking to do a smaller project, such as remodeling, and would like to obtain a building permit yourself, here is the process:

1. Contact local authorities from community managers to building departments. 

The first step is to contact and explain your intentions to your immediate community and go up from there. For example: if you live in a building and want to change the floor, ask the building manager what you'll need from them and then contact the building department asking the same.

2. Prepare the permit application and additional material. 

After contacting your local authorities, they'll probably send you to get a Permit Application and start from there. Depending on your project, you might also need drawings of the work you intend to do. All applications ask who will be the General Contractor. If you have someone add him, on the contrary, if you don't have one yet or want to wait for more prices to come in, you can submit the application package as a Dry Run. Also, remember to notarize your application!

3. Submit the permit application. 

Some municipalities have an electronic plan submittal system; others still require the drop-off of two original physical packages.

How to obtain a Building Permit in Miami
Physical Application package ready to be submitted for Building Permit

4. Wait for Reviewers to review everything.

Have patience and follow-up. The waiting time varies significantly between Building Departement. Electronic systems reduce their time considerably. However, there may be a particular aspect of your process that takes more time than usual.

5. While waiting, track your Building Permit application for comments and approvals. 

All Building Departments have an online system where you can track and view your application comments. If you submit the application electronically, check back in a day or two to see if everything went well through the pre-application step (where they check if the files are readable). After that quick follow-up, check back between two weeks and a month for any comments.

6. Follow-up in you haven't heard back.

While most cities call or inform you when they finish the first revision cycle, sometimes you may miss the call, or the e-mail goes into the spam folder. If you haven't heard back in a while, don't be afraid to follow-up on them with a kind e-mail.

7. Answer and address comments. 

Almost always, you'll get at least one comment from a reviewer. Address them as soon as possible and resubmit. Go back to the previous three steps while waiting for their re-review.

City of Miami Approved Building Permit
City of Miami Electronic Building Permit Approval Seal

8. When everything is approved, pull the permit.

Congratulations, your Building Permit Application is approved! Remember to 'Pull the Building Permit' before beginning any construction. If you haven't already, add the applicable Contractor. Then, pay the Building Permit fees. Once you've paid, you'll be issued the Building Permit.

9. Record a Notice of Commencement. 

With the Building Permit issued, you'll have to record a Notice of Commencement (NOC). The NOC is a document that you have to fill out, sign, and record it in your local Clerk of Courts. The first inspector to visit your project will require the recorded NOC, but most importantly, this states the date the work will begin (and the Lien Law applies). The best practice is to file it before the work begins.
Pro tip: If you go in person, take an envelope with a post stamp and always ask for a certified copy to have right away.

10. If required by your community, submit all the paperwork to them. 

Your community will usually have another package list for you to fill-out and provide. Community Managers often request the Building Permit and NOC and Certificate of Insurance (COI) with an additional insured clause from your Contractors.

11. Finally, begin the construction.

That's it! Well, almost. You still have to build your project and go through the inspections while doing so.

What's next?

Your Contractor should know when to ask for inspections. Keep in mind that there are many inspections halfway into the construction. Don't allow anything to be covered without an inspection unless it isn't required.

Obtaining a Building Permit may look a tedious process, and I assure you, it is. Can you do it by yourself? Definitely. Just know what to expect and be patient. I'll always recommend hiring an architect or ask your project's Contractor to do this for you. It will save you time and probably money in the long run.

COVID-19 Opportunities for Residential Developers

At MIK Architecture, we solve challenges with our clients every day to design residential buildings that promote quality of life without sacrificing your Return on Investment. Today, the Coronavirus pandemic gives us another challenge. However, there are also COVID-19 opportunities for Residential Developers.

Firstly, we support and highly recommend staying at home and staying safe. Health should be our first and upmost concern. That being said, this pandemic gives us an excellent opportunity for anyone who would like to invest in Residential Developments: and you should start today! 

Current COVID-19 Situation

No one is immune to the virus, less to the shutdown due to it. Residential development is not an exception. For that reason, we began thinking about what we could keep working on, and what was out of our hands.

First, let's look at the stages of a residential project, whether it's for development or personal one; they are the same. We usually think there are only two stages: design and construction (obviously), but there is also the planning phase. This phase of a project is the most underrated or not taken seriously enough, and should be commissioned before anything else.

As each project is unique and the requirements differ based on a multitude of factors, we should think of the planning phase as the foundation upon which the rest of the project is built. At MIK Architecture, we like to call this the Feasibility Study.

Then, we have the Design phase, which is self-describing: the project is designed and detailed for permitting and construction— lastly, the Construction stage: when we build, of course.

Due to the uncertainty of the current market state, it's hard to begin with both Design and Construction phases, understandably. However, this shouldn't mean to stop developing or launching new projects. This time, though, take the COVID-19 Opportunity and begin your project in a smart, safe way!

What will happen after COVID-19?

We now understand what is hard to start in a new residential project. Now imagine what will happen when the pandemic ends –and the State of Emergency is lifted.

There will be a rush of developers looking for architects, only to find that many others have also done so. They will pay the extra fee for their project to be accepted, and hopefully, be rushed. When done, they'll send their project to permitting, only to find out that there's an overflow of projects in the building department being revised.

After a longer than expected delay getting the permit, the construction industry now has many projects to pick and work for. And, once again, developers will pay an extra fee to attract those workers. Only to find out –midway– that there are change orders due to design mistakes made by rushing the design –further increasing the cost and time of the overall project.

Overflow of project in permitting will delay building permits, plan today and take on this COVID-19 Opportunity
Photo by JJ Ying on Unsplash

In summary, those who begin with their project after the pandemic will encounter an overflow of projects, a delay during permitting, and higher design and construction costs due to –later– high demand. Not to mention the extra cost of errors by rushing the design.

So, What are the COVID-19 Opportunities?

As mentioned before, with the planning phase, you could get a great foundation, and reduce your project's risk, increase return on investment and have a great design. This phase is still valid and is one of the most significant COVID-19 Opportunities for residential developers.

With the planning phase finalized, you will have a better understanding of the need and options of your project. Most importantly, you'll have the confidence and knowledge of moving forward to the Design stage.

Whoever is ready to build at the end of the pandemic, will benefit from lower construction costs, as there will be many workers looking for jobs as soon as possible. Will have won time by doing the two stages that can be done today, and have everything ready as soon as construction can start.

Furthermore, even if the project hasn't gone through the permitting phase when reopening the state, you would have avoided the backflow of projects looking to restart asap.

COVID-19 Opportunity plan scheme

Lastly, if you take the time that the planning phase should have, you'll save money in the long run by reducing design changes later on, including time and cost overruns during construction.

How to start?

Change the challenge into an opportunity. You can still protect your capital, make a better profit –with discounted cost and interest– and have a great design without sacrificing the other two. Start with a Feasibility Study today!

Typically, the Feasibility Assessment saves our clients thousands of dollars and weeks of lost time, not to mention the stress and headache of getting something wrong. When you combine it with the design phase later, they're the perfect COVID-19 Opportunities to take and implement now.

Accomplish them all from the safety of your home. Call or send us an email and begin the planning phase before its too late!

Matias Daroch, AIA
MIK Architecture

PS: At MIK Architecture, we continue delivering the same level of support and design that we accustomed to provide. We've employed proactive measures to ensure that our team can work remotely. We are well prepared and have experience in remote meetings with out of state clients. Request a Free Guideline Session here!

Design-Build vs Design-Bid-Build - What is better for Residential Projects

There are many forms of project delivery, which is the process of how a project is completed from beginning to end. The different methods vary depending on the involvement of the project's timeline, budget and owner's involvement. Other priorities can also influence the project delivery method as general risks to take, whether a collaborative team is important, or if looking for the most competitive construction bids. Here you will find a comparison between design-build vs design-bid-build.


Design-Bid-Build project delivery

The traditional method is Design-Bid-Build (DBB), which, as the name suggests, begins with the design from an architecture firm, then goes through a bidding phase to look for a contractor and is later built to completion by the awarded contractor. In essence, the design and construction are split between entities with separate contracts and responsibilities.

OPPORTUNITIES | What to like

May result in the lowest Bid
When the project design is ready for bidding,
Has the architect as construction advocate
Minimizes the owner's involvement in any conflicts as it has one point of contact. At the same time, conflicts between the architect and builder are reduced as they work collaboratively as a team to resolve any issues.

DISADVANTAGES | What to look for

Longest time overall
Has a linear step by step phase, meaning that all the design documents must be finalized before bidding and later building the project.
Higher risks
The developer or owner has two contracts and must coordinate both teams (designer and builder), opening itself to mistakes in the transmittal of information, which may then result in change orders or other bigger problems.
Construction cost defined at later stages
Without a contractor involved in the early stages, the architect may over-design elements that may go over-budget and known only after the bidding process; this may require some re-designing and re-bidding, adding more time to the overall project.
Susceptible to Change Owner
With separate entities, there is less communication and collaboration between the design and building team, resulting in increased susceptivity of change orders and finger-pointing becoming controversial during construction. Additionally, the design team's documents will be heavily scrutinized for errors & omissions looking to create more Change Orders and increase the construction cost.


Design-Build project delivery

The Design-Build (DB), on the other hand, is an alternative project delivery method that has grown in popularity in the last decade. With this project delivery method, there is one entity in charge of the whole project and under a single contract with the developer or owner. The Design-Build entity can be a team of architects and builders for different firms, but the owner only deals with one project manager, one contract, and one unified flow of work from design all the way through completion.

As in the traditional method, Design-Build can be used on many types of projects and can be very successful if executed properly. This approach to implementation is becoming more popular because for both owner, and AEC (Architecture, Engineering, and Construction) professionals. The joint effort saves money and time by transforming the relationship between designers and builders into an alliance that fosters collaboration and teamwork and gives the owner one entity to hold responsible if something goes wrong.

OPPORTUNITIES | What to like

One point of contact
You, the developer, only need to coordinate and deal with one entity for the whole project for any questions or concerns. As the relationship will be long, we recommend doing a zero-commitment Feasibility Study before hiring the architect or Design-Build entity
Reduced risk
Minimizes the owner's involvement in any conflicts as it has one point of contact. At the same time, conflicts between the architect and builder are reduced as they work collaboratively as a team to resolve any issues.
Faster overall delivery
By eliminating the bidding process, the project saves a significant amount of time. Additionally, the construction can begin prior to finalizing the design details, this saves as much as 33% in the overall project completion.
Collaborative and cost-effective
By designing with the contractor's input from the early design stages, the project is designed with the most cost-effective materials and methods, achieving the budget and saving the risk of having to re-design the project to meet the budget.

DISADVANTAGES | What to look for

No advocates for the Owner
As the design team works as one entity, the Owner has to take decisions and check the quality of the work by himself. For developers, this usually isn't the case as they usually have someone assigned to the project who does this task, whatever the project delivery.
Lower bidding transparency
By eliminating the bidding process, the project may result in higher prices than if it was competitively bid. However, by having the contractor in the early stages of the design, the Project's budget is usually met.


COSTMay result in a lower bid when the design team knows the latest means and methods of construction.Builder is involved in the early stages of design and gives feedback on the means and methods of construction, resulting in a cost-effective design
TIMELinear steps of the project, longer time overall.Design Development and Construction Documents phase may overlap with the Bidding and Construction phases.
RISKDeveloper has two contracts to manage and must coordinate design and building team separatelyDeveloper contracts one entity that if fully responsible for the complete project.
DESIGNMay have better design, as the construction cost aren't usually fully taken into account during the design phase.May have good design, without sacrificing costs and risks as it is part of the design process.
Design-Build vs Design-Bid-Build time and cost comparison

Explanation Video

Video by Gluck+ Architect Led Design-Build firm