You Can Build a Modern Net Zero House or Passive House for Less Money Than a Typical House
The skyrocketing cost of house construction has made building either a high-performance (net zero or Passive House) or even a typical house seemingly unviable for most families. You're committed to a wise investment in your family's future, so you're doing your research. You need a house that will fulfill your family’s evolving needs and that will be a long-lasting, healthy home; but starting a huge mortgage at this stage of your life to cover the build cost maybe isn't practical. How do you afford an ultra high-performance house that incorporates climate resilience and creates a wonderfully healthy environment?
Learn design strategies that will reduce the cost of building a house and simultaneously make the house better.
Part 1: Common Techniques (Not Recommended)
Part 2: 10 Design Strategies (Highly Recommended)
What Is the Cost to Build a House and Why Is It So High?
For only the second time in the past 40 years, the inflation rate in Canada has risen above 5%. In 2021, the construction cost of a fully custom residential house in Vancouver was between $435 and $1100 per square foot of floor area - a wide range but still expensive at the low end. A million dollars for a 2200 sq.ft. custom home? Construction costs in general in BC were climbing aggressively around 2015. However, the cost of house construction escalation exponentially from the beginning of 2017 to the end of 2021 going up 39%. The price of lumber DOUBLED from 2020 to 2021. Three months into 2022, lumber's price tripled. Why is it so high? The short answer is: everything. More precisely, a combination of many factors appears to explain current prices and price volatility. Record-low interest rates, renovations during lockdowns, closed factories, stuck cargo ships, floods, wildfires, Amazon's expansion, record-high immigration to BC, and perhaps other factors colluded.
But that doesn't really matter, and I'll explain why later in the article when I share some of the techniques in my SAPPHR Strategy™.
Worst Ways to Reduce House Construction Cost, So Why Is Everyone Using Them?
You may feel that you're facing a dilemma: pay for a higher construction COST now at a low interest rate or wait until the construction costs (hopefully) correct later to finance a likely higher land cost at a higher interest rate after at least a few years of yet more general inflation. You're smart, so you look at the options for reducing the cost of building a house now. Here are ways to reduce cost that most people choose.
Less Expensive Finishes: This seems the most obvious, but it actually has probably the least impact unless you were planning to fly in Moroccan tadelakt artisans to plaster your bathroom. Explore this option as a last resort.
Smaller House: This is also obvious, but far less easy for most people to swallow. Reducing the size of the house will reduce the construction cost, but reducing the size by 10% may only reduce the cost by 5%. Use with caution.
Lower Quality: All other things being equal, a building constructed to the bare minimum according to building codes will be the least expensive. It will also be the least comfortable and have the shortest lifespan.
Production home from a builder or developer: These houses are predetermined, standardized design configurations with few or no customization options. The home can cost less than half of a typical custom house. Just like every other house on your block of identical homes.
Cheaper Land: Spending less money on a property will leave you with more money to spend on the construction cost of the house. Use with caution. A suburban or semi-urban lot that has services (gas, water, electricity, sewer) already and is close to urban distribution hubs is less expensive to build on.
Land with an Existing House: A bank will typically lend considerably more to buy a property that already has a house on it. However, demolition of the existing building typically requires a permit and may require asbestos evaluation, other assessments, or waste disposal fees that add to the project cost.
Remodel an Existing House: Depending on the condition of the existing house and the extent to which you would want to renovate it, remodeling may be less expensive than building from scratch. However, age-related deterioration or elements not compliant with the building code could add expense that uses up what you saved in buying second-hand.
Competitive bidding: This approach isn't very useful when the construction industry is very busy because builders are less interested in chasing low-profit projects. Due to cost volatility at the moment, builders are padding their prices to cover anticipated cost increases. Find a builder whom you trust, and negotiate a contract with them.
Local Builder: A builder who lives and works in the area will have good ongoing relationships with a network of local suppliers and subtrades who are willing to provide competitive pricing. You still need to qualify them to ensure they will be able to meet your expectations.
Local Architect: A local architect does not need to charge for travel expenses. Then again, you will need to be able to trust one of the local architects with the huge sum of money and your invested future.
Self-managed Project: Unless you're a builder with project management experience, you do not have either the relationship with trusted subtrades or the familiarity with orchestrating subcontracts in a very heated construction market. Pay for a general contractor to manage the build.
Simpler Design: A simple box that has only one exterior finish material is the least expensive to build. However, there is a spectrum ranging from elaborate excess to boring bunker, and the best solution is somewhere in the middle.
Optimized House: Yes. Just yes. Let's get into that.
Top Ten Ways to Reduce the Cost to Build Your House
Your success wasn't an accident; it is a result of one smart decision after the next. While all the options above are methods you can use to save on construction costs, they are nearly all some sort of sacrifice or compromise. Do you want to compromise on your family's home? I developed the SAPPHR Strategy™ after years of following case studies of successful cost-effective net zero and Passive House residential construction projects. The way in which houses have been built for the past 80 years - Victorian, Craftsman, and Prairie School styles - is not the best way to build them; it's just been a standardized, practical way to build them that doesn't require much expertise. I offer here instead key strategies to help you optimize the house to make it less expensive to build and to maintain.
1. Hire the builder early in the design phase: A good builder engaged early can offer cost-saving suggestions that can be incorporated into the evolving design instead of applied as an axe after the fact. Allowing the builder to take part in the design will simplify onboarding when construction begins and lessen the likelihood of construction details or coordination items being missed in the design. Some builders will credit the preconstruction fees to the cost of the construction since the participation saves them money as well and allows them to more accurately provide a quote to build it.
2. Simpler Building Form: Exterior walls are often jogged out and roofs articulated in an attempt to create visual interest. These junctions are not only labour-intensive falsework not even visible from indoors which and require extra material - and therefore costly - but they also reduce the thermal efficiency of the building. Excess roof valleys are liabilities for accumulating snow and ice, attracting moss or lichen that eat away at the roof, and provide a nesting spot for flying embers during a wildfire thereby increasing the risk of catching fire. How often do you hear of someone being complimented on how nice their roofline is? Simplifying the general outline of a floor plan also improves circulation between rooms, reduces the distance you have to walk to get from one spot to another, and lowers the heating and cooling costs. A straight exterior wall can be clad with either different materials or even the same material at different depths to articulate and visually break up the single plane.
3. Advanced Structural Framing: This is essentially lining up structural elements to reduce the amount of material needed.
Align exterior wall studs with the studs in the wall above - for two-storey houses - and with the roof framing members.
Increase the typical wall stud spacing from 16" to 24".
Decrease exterior wall stud width from 2x6 to 2x4. This relies on insulation mostly or wholly outside of the sheathing and on a fairly simple floor plan.
4. Consult with the builder's HVAC and plumbing contacts to suggest a water heating system that works together with heating and cooling of the home. This exercise reduces costs by eliminating single-purpose equipment.
5. Plan the ventilation system: Assuming your house will be heated and ventilated with a HRV or ERV, planning the supply ductwork and return airflow to minimize the length of ducting will save you money on not just the duct but on the HRV/ERV equipment itself - a substantial portion of the equipment cost.
6. Plan the plumbing layout: The kitchen, laundry area, and washrooms should be located as close to each other as possible to minimize the cost of piping, piping insulation, water heating equipment, and air conditioning loads. This also reduces wasted water while you're waiting for hot water from the faucet.
7. Develop a daylight strategy: Plan where and when light will enter and move through the house. Carefully designed daylighting reduces the need for artificial lighting, makes use of sunlight for heating, but also avoids glare, overheating, and consequently reduces the amount of air conditioning required. The extra benefits are more pleasant illumination throughout the home and less costly heating and cooling. I explain daylighting in more detail in my article "Daylighting Design for a Happier Space".
8. Simplify the structure of decks and balconies: Provide posts under decks where possible, but if it's really an eyesore, ask your engineer to design a self-braced balcony that reduces the material and simplifies the construction where the balcony structure meets the exterior wall. You'll save money building it and on heating in the winter.
9. Use solely exterior insulation: Installing all the thermal insulation on the outside of the wall and using a single waterproofing membrane greatly eliminates the costly sealing of joints in and penetrations through polyethylene vapour barrier membrane. The same applies to your roof, and I expand on this in "Roofs for Cold Weather".
10. Standardize junction details: The designer of the house should minimize the variation in building envelope junctions to reduce the learning curve for the builder's construction people.
11. BONUS: Spend money where you WANT to spend it: Decide what aspects and parts of the house matter to you. By applying the previous ten techniques, you will buy some financial room to splurge on a few key elements of the house that matter most to you and allow you to enjoy it the most. Go ahead and get the tadelakt.
My SAPPHR Strategy™ gears a building project to a cost lower than average, and the savings can be used to make the building better - more enjoyable. The first step in SAPPHR is getting a RAD Study™ to analyze your situation and give you a solid direction forward.
20 years from now, you could be enjoying a healthier house tailored to your family’s needs and which doesn’t need substantial repairs, or you could still be stuck in your current house that’s increasingly drafty in the winter and literally uninhabitable during summer heatwaves. Will you be able to continue to live in your current home into retirement? Can you afford not to build the right house?
Book a Diagnostic Session to discuss getting your RAD Study™.