Home & Garden Columns

About the House: The Last 10 Percent Rule of Remodeling

By Matt Cantor
Friday March 23, 2007

Economics is a wonderful and fascinating field. When I think about the things I’d like to study as I get older, it keeps getting pushed higher up on the list. The fun thing about it is that it’s at work everywhere around us. As long as money or goods are flowing through a system it’s there and from my very prejudiced vantage point it appears to me no more prevalent or relevant than in the world of construction. 

I always laugh and roll my head back when I read stories in the press about enormous civil projects that have cost over-runs of 100 percent accompanied by time delays and white collar arrests of paper pushers who sloughed cost overruns into their Cayman Island accounts. It makes the contractors look good. Certainly many people have a story of woe involving a contractor who turned out be a scoundrel but as I have often beaten into the tabletop, it’s not the way most of them are and certainly isn’t a function of evil. Contractors are JUST like everyone else. Most are trying to their best and most do pretty well but only a few are top flight.  

Also, a few are going to be incompetent, varying with the trade; that is, licensed electricians are rarely stupid and most are both bright and committed. Roofers, on the other hand run from superb to pathetic. I suspect this is because roofs don’t kill people and you don’t have be too bright to nail roofing onto plywood. Of course, this remark is deceptive (like the problem) because roofing, done responsibly and well is actually fairly complex but since you can get away with something that looks like roofing (and who climbs up there to look, anyway) without knowing the finer points, we end up with more than a few roofers who stay in business while producing a shoddy and economically inadequate product. By the way, amazingly, most cities, while issuing permits for roof replacements do NO inspections of these jobs (are you shaking your head?). 

A better roofer may charge 20 percent more for their work but may well produce a product that requires almost no maintenance and lasts 30-100 percent longer. While it seems as though this is a no-brainer, most buyers of these services don’t do much shopping and don’t ask critical questions or contact referrals. Thus, we all end up with lots of subcompentents in the marketplace. If we all did more research, they would just wash out with the tide. Apparently people don’t just get the government they deserve, they also get the marketplace they deserve. See, I’m an economist too (look ma, no Ph.D.) 

But, as usually, I’ve managed to completely evade the point I want to make so I’ll just mosey on back to where I lost my place. The thing I’d like to discuss, and it IS about economics, is within the financial theory of construction costs. When I see houses being sold, they’re often suffering from what might be called, empty-pocket syndrome, or the theorem of ever-shortening shrift.  

Redmodelings I see often appear as though the money ran out about 3 weeks too early and all the nice things that could have been done near completion were either omitted or done in such a slip-shod manner that the best of what they could have been is lost. It’s not only sad, it’s really stupid, economically speaking. Had this same project been economically planned to allow for it’s actual scale, the final measures could have made the work shine. 

When we build a house, there’s a lot of money that goes into a foundation, framing, plumbing and wiring but these, in the end, are not the parts that make us “oo” and “ah.” They’re the subtext. The presumptive. The parts that excite us about a house are mostly the things that get added in the very last days of construction. Now, this isn’t to say that good massing (shape and size of the building and its rooms) as well as good fenestration (window placement) don’t help to make a great house (and these are clearly things set at the beginning of the project). But even when these features are present, the detailing and appointing of these rooms makes all the difference. 

It seems to me that so many of the houses of the 1960 and ‘70s make this argument for me. They may have huge rooms and dramatic siting and views but they leave me blah because they lack detail. Now this was institutionalized in this time period and very much their misbegotten intention but for many of us doing projects today, the same sort of thing happens inadvertently. 

We plan a wonderful project and complete all the big rough parts and then, just around the time we should be picking out great appliances, counter-tiling and flooring, the money starts to run out. Instead of picking great finishes, the parts we’ll actually see and feel, we are forced to short ourselves on the very things that will make the project satisfying and valuable. Worse, we often run out of labor dollars near the end, forcing many important tasks to be passed along to someone cheaper and less skilled. This often results not only in a loss of appeal but also in longevity and quality far short of what a reasonable end-of-job budget would have allowed. 

Finishes, as we might call them, including finish carpentry (moldings, baseboards, built-ins), flooring, counters, painting, appliances and all the things that we do toward the end of the project. These are not only expensive (for seemingly small units of area), they’re also time consuming. The final parts of a construction project can often take half the budget and half the time to complete but these should not be seen as nuisances or cost over-runs. Rather, we need to revise our thinking so that we see the physical mass of construction as being a staging for this vital set of details. 

This modern thinking is a very large part of why modern houses don’t look like old houses. It’s economics. We see square footage as the primary feature of houses today while the quality of detail was the central criteria a hundred years ago and even more in the distant past. 

So how do we actually make this work? Well, one important dictum is to scale your project accordingly. If you want real quality, start off by bidding for it. Make it clear to your architect, contractor or subcontractors that you want “finishes” done well and that you want to begin budgeting for great tile and wonderful windows early on. Build-in all of these costs and leave an extra, secret, sum of money set aside for changes or other budgetary slip-and-falls that are likely to occur before completion.  

Most jobs have some cost over-runs and most clients are asked to accept some disappoint before the job is done, in order that all the bills get paid. If you’ve set something aside, you’re more likely to be able to answer these dilemmas with “Well, I think I can come up with a little extra to make sure that I get it the way we planned.” Don’t say that too often or they’ll figure out where the spigot is. 

Most importantly, don’t try to build or remodel to the max. Part of why Small is Beautiful is that it’s complete, fully nourished and well budgeted. It’s economics. 

By the way, part of what we’re talking about here is the European model and certainly the Japanese model. Do less. Do it better. Make it last and get every penny for your dollar. 

Good contractors end up learning this (if they didn’t know it to begin with). Architects often understand this but can’t always get their way with clients or contractors. 

Really bad contractors not only don’t know it, they often seem unable to finish properly despite repeated requests for extra money. A well organized and experienced contractor can end up being cheaper in the end simply because they know how to control expenditures. 

We’ve covered a lot of ground here and it may be a little hard to digest all at once, but if I can leave you with only one nugget to hold onto, it would be that when you take on any sort of construction job, whether it’s jacking the house, remodeling a kitchen or simply hanging some shelves, that you allow plenty of time, money and labor for what looks like the last 10 percent.  

I think it’s safe to say that it ain’t. 


Got a question about home repairs and inspections? Send them to Matt Cantor at mgcantor@pacbell.net.