Development costs: Difference between revisions

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Development costs are all those required to complete a new project such as housing. In the US, sometimes referred to as Total Development Cost (TDC).

Cost components

Land acquisition cost

Entitlement cost

Design

Financing

Construction costs

Taxes and fees

Relationship of development costs to housing prices/rents

References

Bertolet, Dan.
- "Yes, Red Tape and Fees Do Raise the Price of Housing." Sightline, July 24, 2017. http://www.sightline.org/2017/07/24/yes-red-tape-and-fees-do-raise-the-price-of-housing/.
- "Housing delayed is housing denied (and rent increased)." Sightline, August 10, 2017. http://www.sightline.org/2017/08/10/housing-delayed-is-housing-denied/.

California Department of Housing and Community Development. 2014 California Affordable Housing Cost Study, October 2014. http://www.treasurer.ca.gov/ctcac/affordable_housing.pdf.
California Governor’s Budget Summary – 2017-18
http://www.ebudget.ca.gov/2017-18/pdf/BudgetSummary/HousingandLocalGovernment.pdf.
Total development costs average $332,000 per unit for the construction of new affordable units
The Economist. "Efficiency eludes the construction industry: American builders’ productivity has plunged by half since the late 1960s." August 17, 2017. [1].
Emmett, Gary. "International construction market survey 2016." Turner and Townsend. http://www.turnerandtownsend.com/en/insights/international-construction-market-survey-2016/.
Ive, G. and Gruneberg, S. The Economics of the Modern Construction Sector. (2000).
https://books.google.com/books?id=kCuBDAAAQBAJ&pg=PA264&lpg=PA264&dq=Ive+%26+Gruneberg&source=bl&ots=aHTS_oEf2d&sig=ACfU3U1yQ6oWnuvDJD4yheGhieCXAC82Yw&hl=en&sa=X&ved=2ahUKEwidtNOkrvbkAhWTKn0KHT4TDiUQ6AEwB3oECDoQAQ#v=onepage&q&f=false.
Korn, Peter. High cost of 'affordable.'" Portland Tribune. February 06, 2014. http://www.pamplinmedia.com/pt/9-news/209817-66668-high-cost-of-affordable. on Rob Justus / Home First Development.
LePatner, Barry B. Broken Buildings, Busted Budgets: How to Fix America's Trillion-Dollar Construction Industry. October 15, 2007. https://www.amazon.com/Broken-Buildings-Busted-Budgets-Trillion-Dollar/dp/0226472698.
McKinsey Global Institute. "Reinventing construction through a productivity revolution." February 2017. [1].
By Filipe Barbosa, Jonathan Woetzel, Jan Mischke, Maria Joao Ribeirinho, Mukund Sridhar, Matthew Parsons, Nick Bertram, and Stephanie Brown.
Meyer Trust (Portland, Oregon). "The Cost of Affordable Housing Development in Oregon: Meyer Memorial Trust Cost Efficiencies Work Group Final Report.” October 2015. https://mmt.org/sites/default/files/inline-files/Cost-Efficiencies10_1_15.pdf.
Monahan, Rachel. “A Developer Offers the Portland Mayor 300 Apartments at a Deep Discount—and Waits for a Reply.” Willamette Week, March 21, 2017. http://www.wweek.com/news/city/2017/03/21/a-developer-offers-the-portland-mayor-300-apartments-at-a-deep-discount-and-waits-for-a-reply/.
NAHB. “Cost of Constructing a Home.” Heather Taylor, National Association of Home Builders, Economics and Housing Policy Group, November 2, 2015. https://www.nonqmhomeloans.com/cost-of-constructing-a-home/.
Rider Levett Bucknall Ltd. (Phoenix, Arizona, USA). "Rider's Digest 2016." http://assets.rlb.com/production/2016/04/20002334/RLB-Riders-Digest-USA-2016.pdf.
"A compendium of USA cost data and related information as well as international cost data.
"Rider Levett Bucknall is an international property and construction consultancy firm with over 120 offices worldwide. The costs stated in this section represent hard construction costs and reflect the standards and specifications normal to that country or region. Variation in costs may be experienced for factors such as site conditions, climatic conditions, standards of specification, market conditions, etc. Costs for associated site development work such as site formation, utilities, paving, parking and landscaping are excluded.
"Figures also exclude furniture, fittings and equipment (FF&E) with the exception of figures for Hong Kong, China and Singapore, which do include FF&E in hotel costs.
"All project soft costs such as land acquisition, design and engineering fees, entitlements, permitting and financing are excluded."
Sveikauskas, Leo. “Productivity growth in construction.” Journal of Construction Engineering and Management, Oct 2016. http://ascelibrary.org/doi/10.1061/%28ASCE%29CO.1943-7862.0001138.
Terner Center, UC Berkeley. “Terner Center Study: Understanding the Drivers of Rising Construction Costs in California.” 2017. .
U.S. Census. "Construction: Summary Series: General Summary: Specialization in Types of Construction by Subsectors and Industries: 2012." 2012 Economic Census of the United States. Release Date : 10/30/2015. https://factfinder.census.gov/faces/tableservices/jsf/pages/productview.xhtml?pid=ECN_2012_US_23SG06&prodType=table

@@ Line 7: / Line 7: @@
 === Land acquisition cost ===
-=== &nbsp; ===
 === Entitlement cost ===
-=== &nbsp; ===
 === Design&nbsp; ===
-=== &nbsp; ===
 === Financing ===
-=== &nbsp; ===
+=== Construction costs ===
-=== Construction costs<br/> &nbsp; ===
+=== Taxes and fees ===
+&nbsp;
-=== Taxes and fees<br/> <br/> &nbsp; ===
+== Relationship of development costs to housing prices/rents ==
+&nbsp;
+&nbsp;
 == References ==
@@ Line 31: / Line 31: @@
 **"Yes, Red Tape and Fees Do Raise the Price of Housing."&nbsp;''Sightline,&nbsp;''July 24, 2017.&nbsp; [http://www.sightline.org/2017/07/24/yes-red-tape-and-fees-do-raise-the-price-of-housing/ http://www.sightline.org/2017/07/24/yes-red-tape-and-fees-do-raise-the-price-of-housing/].
 **"Housing delayed is&nbsp;housing denied (and rent increased)." Sightline, August 10, 2017.&nbsp;[http://www.sightline.org/2017/08/10/housing-delayed-is-housing-denied/ http://www.sightline.org/2017/08/10/housing-delayed-is-housing-denied/].<br/> &nbsp;
 *California Department of Housing and Community Development. 2014 California Affordable Housing Cost Study, October 2014. [http://www.treasurer.ca.gov/ctcac/affordable_housing.pdf http://www.treasurer.ca.gov/ctcac/affordable_housing.pdf].<br/> &nbsp;
@@ Line 42: / Line 43: @@
 *Meyer Trust (Portland, Oregon). "[https://mmt.org/sites/default/files/inline-files/Cost-Efficiencies10_1_15.pdf The Cost of Affordable Housing Development in Oregon: Meyer Memorial Trust Cost Efficiencies Work Group Final Report.]” October 2015. [https://mmt.org/sites/default/files/inline-files/Cost-Efficiencies10_1_15.pdf https://mmt.org/sites/default/files/inline-files/Cost-Efficiencies10_1_15.pdf].<br/> &nbsp;
 *Monahan, Rachel. “[http://www.wweek.com/news/city/2017/03/21/a-developer-offers-the-portland-mayor-300-apartments-at-a-deep-discount-and-waits-for-a-reply/ A Developer Offers the Portland Mayor 300 Apartments at a Deep Discount—and Waits for a Reply.]” Willamette Week, March 21, 2017. [http://www.wweek.com/news/city/2017/03/21/a-developer-offers-the-portland-mayor-300-apartments-at-a-deep-discount-and-waits-for-a-reply/ http://www.wweek.com/news/city/2017/03/21/a-developer-offers-the-portland-mayor-300-apartments-at-a-deep-discount-and-waits-for-a-reply/].<br/> &nbsp;
-*NAHB. “Cost of Constructing a Home.” Heather Taylor, National Association of Home Builders, Economics and Housing Policy Group, November 2, 2015. [https://www.nahbclassic.org/generic.aspx?genericContentID=248306 https://www.nahbclassic.org/generic.aspx?genericContentID=248306].<br/> &nbsp;
+*NAHB. “Cost of Constructing a Home.” Heather Taylor, National Association of Home Builders, Economics and Housing Policy Group, November 2, 2015. [https://www.nonqmhomeloans.com/cost-of-constructing-a-home/ https://www.nonqmhomeloans.com/cost-of-constructing-a-home/].<br/> &nbsp;
 *Rider Levett Bucknall Ltd. (Phoenix, Arizona, USA). "Rider's Digest 2016." [http://assets.rlb.com/production/2016/04/20002334/RLB-Riders-Digest-USA-2016.pdf http://assets.rlb.com/production/2016/04/20002334/RLB-Riders-Digest-USA-2016.pdf].<br/> "A &nbsp;compendium of USA cost data and related information as well as international cost data.&nbsp;<br/> "Rider Levett Bucknall is an international property and construction consultancy firm with over 120 offices worldwide.&nbsp;The costs stated in this section represent hard construction costs and reflect the standards and specifications normal to that country or region. Variation in costs may be experienced for factors such as site conditions, climatic conditions, standards of specification, market conditions, etc. Costs for associated site development work such as site formation, utilities, paving, parking and landscaping are excluded.<br/> "Figures also exclude furniture, fittings and equipment (FF&E) with the exception of figures for Hong Kong, China and Singapore, which do include FF&E in hotel costs.&nbsp;<br/> "All project soft costs such as land acquisition, design and engineering fees, entitlements, permitting and financing are excluded."<br/> &nbsp;
 *Sveikauskas, Leo. “Productivity growth in construction.” ''Journal of Construction Engineering and Management'', Oct 2016. [http://ascelibrary.org/doi/10.1061/(ASCE)CO.1943-7862.0001138 http://ascelibrary.org/doi/10.1061/%28ASCE%29CO.1943-7862.0001138].<br/> &nbsp;