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We speak again with Doug Burdge, AIA lead architect and owner of Burdge Architects, Malibu. Doug and I talk about how one goes about conceiving the budget for the construction and design of a new home. For more information on Douglas and Burdge Architects go to www.buaia.com
Transcript
Jana:Â Welcome back. We are continuing our conversation from last week with Doug Burdge, AIA lead architect and owner of Burdge Architects Malibu.
Burdge Architects is an architectural planning and consulting firm based in Malibu, California. Doug is on the cover of the Spring 2021 issue of the Malibu Times Magazine. He is here with us for the second in what we hope will be a series of conversations specifically about rebuilding after the recent Malibu fires.
Today we would like to talk about the budgeting part of the design process. When I begin working on my projects, I must work with the budget that has been established because the house design is complete, and the plans have been approved for construction. Usually, I’m hired just before or after the framing begins when everyone realizes that they’ll need the plumbing roughs and the specifications for everything going into the construction process.
I look at the plans with fresh eyes just as the builder and the client are narrowing their vision. Unless the client chooses to spend more on some great idea that I propose, most of the time when I start, everyone is looking at how they can save money or where they can cut the budget. Being creative within budget restrictions is a big part of my creative process.
My first questions are about the budget and how it gets established. During the design and building process, are you, as the architect, the one who breaks the news to the client about how much their insurance coverage will cover?
Doug Burdge: Well, they’re the ones that have the insurance policies. They have to share that with us. As I said, for some clients, it wasn’t a problem. They had really good insurance policies. And then I had to take the temperature of my contractors of what they are currently pricing and whether there is a way to save on that.
What can you save? When you’re rebuilding a house, if you think about it, everything under the ground typically didn’t burn; your foundations and your septic system are still there. The driveway is still there. A lot of your landscaping burned down.
This fire was so hot, hotter than the ’93 fire, that it melted car tires and rims down to the ground. It was just molten metal. So, all the foundations were basically ruined.
They were allowing us to remove all the foundations so we couldn’t save the old foundations, which was actually a better thing then because now we don’t have to build exactly what the old house used to be. It might have been in a terrible location on the property.
With construction costs, we had to get a lock on “what are we building for?” People always ask me, what is the cost per square foot to build a house? Prior to the recession, you could build a house for $300 or $400 a foot. I’m talking about the recession of 2009, and ’10.
And now it’s like, can I build a house for $500 a foot? You’d like to, but it’s probably close to $600 or $700 realistically, and sometimes you can build a beach house for over a thousand bucks a foot.
So it’s knowing what the budget is, knowing what the insurance is, talking about it, and then knowing what you’re designing and saying, “I know you really like these nice windows, but you’re just not going to be able to afford them and this product here is a really good product, too.”
Most of our products, 95% of them, no matter what style of home, we’re using metal windows, aluminum windows, and steel windows. It’s rare to use any kind of wood windows. For lower burn rates and there’s a maintenance thing there too.
It’s just understanding materials, the whole thing, and the exterior box circulation. How much for air conditioning? Do you really need as much?
And then there’s the square footage, maybe their kids have moved away, do you really need an 8,000 square foot house anymore? Can you live with 6,000? And we can save you there.
I tell people there’s two ways to make a budget very, very simple. It’s called the level of finish and scope of work. The scope of work is how much you’re going to build, let’s say 4,000 square feet, level of finishes, whether it’s a Formica counter or a granite counter. And it’s the type of finish you put on that box. Those two things will determine the cost.
Jana: It sounds like working with the money is part of the discussion from the beginning, but do you start with some design ideas and learning about what they’re interested in or the style or any of the creative stuff before you really start to break into figuring out where the money’s going to go and how that money’s going to work?
Doug Burdge: I mean, people are always interested. They want to get excited when they start; we’ll figure out a way to afford this. You’re hiring an architect to be creative and maybe to you need them to be your accountant. Not that some accountants aren’t obviously super creative with your taxes, but I would say that you do want to get into that.
One thing we’re known for in our office, and I think I’m pretty good at it, is the basic space plan and understanding where things go and what rooms are. And again, I may have gotten their old floor plans and said, “Well, how was your house before?”
I’ll look at it and go, “I can make major improvements on this,” without necessarily adding any square footage, but just getting rid of some hallways or having another way to do something.
So it is the layout. You want to get that established, but again, don’t think you’re in a vacuum. The property might be on a steep cliff, so we have to think about the foundation systems where you’re going to put a million dollars into the ground on the foundation, and you haven’t spent money on anything beautiful yet.
We have to look at where the site is and how we can best make any changes. We have had to work with the fire department and to work with all these different agencies. So it’s all very encompassing, but the people want to see the design right away.
Jana: And I imagine that the foundation, location, and things like that are where people are underinsured. I mean, when you buy a house, it’s already there and located. You insure the house. How realistically will an insurance company or your insurance agent help you identify what it would cost to rebuild that house?
Doug Burdge: Well, the site is actually what creates a lot of these unknown costs because you can be living on a flat lot somewhere in the valley, and it’s going to be pretty simple house.
You got that winding driveway that goes up 500 feet, or you have utility issues, you have drainage issues because Malibu is known for being more wild, there’s more open land and a little more rustic feeling. Not everything is in a track. There are no tracks here, so everything is custom.
It’s pretty much a custom place. You’re rebuilding and you’d love to think it’s going to be the same price as when you bought that house in 1980 or whatever, but it just isn’t.
Jana: Are you involved in any way with negotiations with the insurance companies? Is there any back and forth to bring their awareness of specific aspects of the loss? There certainly was in the case of my house; we had to point out the more extensive damage than they were looking at on the surface. And how does that work? Are you involved in that process at all?
Doug Burdge: Yeah, actually, early on there were insurance companies that wanted to have me on their cases. There were some talks organized for the neighborhoods. They brought me on because I was a local architect, and I could kind of explain the process. I was like the interpreter for the insurance company.
The insurance company would talk about their claims and what they mean. Then the clients would turn to me and say, “Well, what did they really mean?” I was trying to help and put it in the real language of understanding how that affects them.
And then, even today, we have a couple of people in our office who are pretty expert at this, so they’ll get the insurance information. In insurance, most policies say allow you to do code upgrades, and that’s required. So whatever your per-square-foot house is, there’s a replacement cost, plus a code upgrade.
So between 1960 or 1980 and now, we have more stringent structural codes, different septic systems, and energy codes are different. As well as upgrades on windows, doors, roofing, and materials. So you have about a 20 to 25% increase in your cost because you’re required to do these upgrades.
We have to be really in tune with what those are. So we’ll establish it with a couple of clients, so when the other client asks us to do the calculations, we’re not starting over. We already have the template to do that. We’ll give them our template.
Jana: So in the case of the two projects I just worked on in Oak Park and Woolsey Fire projects, the contractor, the builders, created the budget. And there was some going back and forth with the architect to make the numbers work with the design.
In your case, it sounds like you’re doing a lot of that budget work, but the builder, at some point, has to take that on and create a budget with which they will be committing to build that house. So how much of that is you, and how much of that is your builders, the builders?
Doug Burdge: Well, it’s really both because they may say, “Well, I can tell you that it’s going to be less for stucco than wood siding,” and they’re going to give generic examples, but in our case, we have to actually put the selections exactly into the plan.
So they’ll say, “I know you want that beautiful 30 foot wide opening with a 30’ slider and a pocket your door can alide into, if you would just allow me to put a post, one post halfway in between, I can work with the engineer and save a lot on that.”
So we call it value engineering. It has to happen together. Those are the ones that really make it worthwhile. You’ll have a meeting with the structural engineer sitting across from the framer. Then me or our project architect and the builder, and then within a couple of hours, you should be able to hone that budget without changing the integrity of the design.
Jana: So you have some rudimentary figures that you’re working on based on your experience. And then you create the design, and then you bring that team together so that you can hammer out the design based on what you and the client have come up with as their goal of what they want to accomplish. And you do that push and pull with the builder involved.
Doug Burdge Yeah. And the thing that’s interesting, and I know everyone knows this, but you can have all great intentions, and you hire the architect, and then you start your job nine months later or six months later or a year later, and then you have a budget, but is that really the budget when you’re done? Because stuff happens during construction, you have to pad your number, then maybe 20%. And we call those contingencies. There’s that word, contingency, but I’ll put a line item under your contingencies because I’ll say, “You may think the contingencies are for you if you want to upgrade to a nicer door handle or use Rocky Mountain hardware versus Schlage or whatever the upgrades you think you’re making.”
I said, “When the geologist or the grader starts digging your foundations where he thought that rock was only three feet down because that’s what the site plan indicates, but it’s actually 10 feet down. Who’s going to pay for that extra concrete to add structural support?” You’ve got to pay for it, but that money was never in the original bid.
So it’s that kind of surprise. And then, at the end of the job, you’re thinking, you started the job with the architect at this budget idea, X. You start the job construction with X plus one, and then you have to finish it either at X equals zero or X plus two, three, or four. That’s where it gets crazy.
And the owner adds things. The builder had delays. There’s weather delays. COVID hit, construction was shut down, not for a long time, but it did affect some trades. Building departments got brutal because they couldn’t go back to the office. They’re still not in the office.
We never stopped working. We’ve been amazingly busy. We’ve hired people during COVID because we’ve been so busy. And so many other professions are gone. So you had very well-to-do clients that lost their businesses and didn’t know for how long.
How could you ever think restaurants were closing unless you had bad food? So they didn’t have a choice. So there are people that own 20 restaurants, they own office buildings and people that were very financially secure clients that just called and said, “I can’t. I have to put everything on hold.”
But as much as those people put stuff on hold, other people during COVID moved here from other areas and kept Malibu very busy regardless of the fire rebuilding situation.
Jana: So a lot of the budget goes toward the interior finishes of course, which is where I’m usually involved. In your case, you’ve got someone in your office that’s going to be involved in that process. A lot of those things are being decided in the process.
So, it’s not until you break ground, and you have seen what factors in the foundation that might affect your costs, that you have a fuller idea of what to really expect?
So, how do you help them plan? Is the budget created with allowances that then the client will go out and try to work within? Say, $25 a square foot for tile or 45. For flooring?
Doug Burdge: Yeah, I say that on any job, just make sure your allowances are frigging real. Take your example, the $25 a foot for tile. Where does the client want to shop? There are brands that are in that range but many others that only start at that range. Is the client interested or willing to go where the selections might even come in at ½ that cost?
It used to be even custom wood flooring was $40, $50 a foot, but now we’re getting these great engineered floorings, and we can find them for $18 or $23 a foot. Do you need the wood to be solid or is an engineered product going to work for you?
So it’s just being realistic with the goals and tastes of the client. If you have the luxury of picking everything out, at least before you purchase it, your appliance package, your plumbing package, what kind of electronics you want in it, what kind of audio, video, all these things, then you can push and pull your amounts to keep the budget on track.
Will the client want electric blinds? Are they on the plan? They probably didn’t exist in the original house, and there’s a huge dollar number there. You have to know that at the beginning because you have to provide the slots for them and prepare the electrical connections. Otherwise, you get this kind of ridiculous, after the fact valences and electrical.
Jana: So you include those conversations early on in the game so that you can take best advantage of technology, window treatments and all the finishes as part of the overall picture.
So, is there ever a finished budget? Understanding things will change and you allways need to allow for contingencies. Does the client ever have a solid number to work with? And if so, is that from your office, or is that from the builder’s office?
Doug Burdge: If the client understands the process and understands the value of us, then they want it to be from us because we’re going to be a third party really representing the client. Because at that point, we’re still maybe bidded out, and we’ve got three or four bids from various builders.
We’re trying to put the numbers on the same spreadsheet so they’re apples to apples, Because some builders might just say, “Finishes.” “What kind of finishes? Interior finishes, exterior finishes, what’s the product? What’s the quality? What’s this? What’s that?”
We do want to try to be the ones that help the client understand that there’s the basic, we’ll call it the shell and there’s a budget for that. People want to build the box, they get it done and then they’ll think about the interiors. But there’s a lot of overlap, like the lighting and then the blind side. For example, the window and doors are finishes. Yes, it’s on the outside but also facing the inside. On the inside of the windows and doors is there molding, casing and trims? These have to be included in the budget. So you can’t fool yourself.
Again, a lot of clients are designers, or they might be a developer or don’t need help. They’re going to pick all that stuff out. They just want the shell. We call that a permit set of plans but for more of a regular building or custom set of plans. You do need to know everything. And bring the design and build team in on day one. Fine. I mean, I’m not an ego guy. We need to have everyone in the room together, and we’re going to design this house with the team.
Jana: In closing for this episode, what would be your best advice for the client that’s designing a new home within their budget? If you were just giving a little bit of sage advice, what would that advice be?
Doug Burdge: I mean, if they want to stay within their budget and they hire the architect and together they create a vision. How do they get the house to turn out that way and on their budget?
Jana: Yeah.
Doug Burdge: In that scenario, I don’t know, once you have a plan, you can’t say, “I’m going to do all these extra things” and expect them to be handed to you for free or thrown in. You can’t think you’ll get some sort of deal. You have to think of it as can I live on less? Do I really need a 6,000-square-foot house? Can I have a really nice house for three or four? Maybe if the whole house plan is smaller and smarter you can throw more caution to the wind and upscale the finishes.
My wife and I have never lived in a house higher than 3,000 feet. So it’s kind of “be realistic,” but more so because you’re going to get more out of that.
And also, look at it early on and look yourself in the eye and at the project, saying, are we really being smart with this? Or maybe we have to move. Maybe because we brought it up earlier in our conversation, some people said, “I know I want to rebuild here, but we’re just not going to be able to afford it.”
So don’t hire the architect, don’t do all these designs, and be disappointed. If you could figure that out in the beginning, sometimes it’s a hard reality where you decide you have to sell, but then again, maybe there’s a reason you’re selling. Maybe there’s a reason that this fire is changing your life. So look at that as another opportunity, not as a detriment.
And maybe they were able to sell, they had it for a while, they didn’t have any debt, they didn’t have a mortgage, and they made a couple of million dollars, and they got an insurance settlement, and they moved on. Maybe they moved out of state, they moved somewhere else. That was an opportunity.
So I’m just saying everyone has a budget, even if you’re a trillionaire, there’s still a budget on a project. We work with all sorts of people. But, it’s just very clear with your advisors, whether it’s your spouse, family, or financial people, and say, “Should we really be moving on versus doing all these drawings?”
And then look at it, downsizing to possibly have a better lifestyle because you don’t need as much, you’re not heating as much. Utility bills are less. So look at that as a serious option. Because people think they have to rebuild the same, and they don’t.
Jana: That’s great. It can also be hard to resist the temptation to build more because the lot can take more than you had in the original house. Will an increase in square footage really serve them?
Doug Burdge: And they really don’t need it. You can still have a beautiful kitchen and a beautiful bathroom and the living space you desire. Now, the kids aren’t there that often. And maybe you don’t need five bedrooms; you need three. And that’s why they invented hotels, Airbnb, and other stuff.
Jana: Yeah, that’s very much in keeping with my philosophy too, which is more lifestyle doesn’t necessarily mean more house. It means making specific decisions based on your exact needs. That has been my key to success and happiness and I share that with my clients. Build what you can afford!
I could talk to you all day, but I don’t get you all day. So I need to wrap this episode up. Is there any other thought you want to add before I find a way to get you back for another session?
Doug Burdge: Yeah, no, I think in another session we can talk about alternative, new building methods and ways.
Jana: Exactly.
Doug Burdge: That’s a separate discussion because we are doing the shipping container homes, we’re doing prefab homes, we’re doing homes made out of different materials, more fire-resistant topics and different ways, better ways to build, different ways to build than your typical stick frame house. That’s a separate discussion.
Really, in closing, whether you’re living in Malibu, whether you’re from California or from areas there will be different considerations in rebuilding. We live in an area where there really is great weather, it’s nice most of the time, and this goes to the saying is like it’s that indoor/outdoor feeling. You can have a 2,000-square-foot house, and you have a 2,000-square-foot patio and a garden and everything else, and you’ve just doubled the size of your living space.
Don’t think of your living space as inside. Think of your living space as everything you could use to live on your property. And that is another kind of, “Oh yeah, I haven’t thought about that.” to include in the overall budget. Everything burned down, look how big my yard is now. I didn’t even see it before.
Jana: Now I have a view that I didn’t have before.
Doug Burdge: Yeah, exactly. So, just think of it as a little different shift, and the whole inside/outside thing is exactly why we think we’re successful in the way we’re designing these homes, we take advantage of that.
Jana: Fantastic. Thank you so much. We will have all your contact information on our website so that people can find you. And there’s been a recent wonderful article in the Malibu Times Magazine that people can look up as well, which talks about those container homes.
So with that, I thank you again so much, and I look forward to talking to you again very soon.
Need design help? You can contact us or find out more about our guests at fromdisastertodreamhome.com. Until next time, let us guide and inspire you as you create the home of your dreams.