Development Costs

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The following information is provided for the purpose of understanding the cost of developing land in Juneau. The significance of these costs is directly tied to the affordability of housing.

 

Factors that Affect Construction Costs

Construction costs for subdivision development are dependent upon several site characteristics including: Geographic location; Zoning; Topography; and Soils conditions. These cost characteristics are detailed as follows:

• Geographic Location. The geographic location of the proposed development site affects construction costs in several ways. Costs may be impacted based on distances associated with the following:

• Hauling construction materials

• Transporting workers

• Locating storage and waste sites

• Importing borrow or eliminating excess material

• Connecting the site to the nearest roads and utilities

Additionally, existing roads and utilities may need to be upgraded prior to, or in conjunction with, the development of a new subdivision. This might occur in instances when the current utility systems or roads are at, or near, capacity, or are substandard. Such upgrades will result in added costs.

• Zoning. Zoning controls the density of the development as well as lot size. Therefore, zoning will limit the maximum number of lots allowed at a specific site. The development costs on a per lot basis will generally be greater in low density zones that require fewer lots per acre. Road development costs will be affected by road standards set forth in zoning regulations. Rural zones may allow open ditches with gravel surfaced streets, whereas, urban zones may require concrete sidewalks, curbs, gutters, and paved street. Additionally, zoning may also require setbacks from streams, flood plains and the waterfront, as well as preservation of open areas, parks and greenbelts. These features reduce the acreage available for residential lots, and may increase the construction costs per lot.

• Topography and Soils. Topography and soils conditions have a direct affect on construction costs. Construction costs increase at steeper sites and those with poor soil conditions. As the site topography becomes steeper, costs may increase due to the following:

• Increased difficulty in designing lot and road configurations that maximize lot development and minimize the utilities construction costs;

• Possible need for retaining walls;

• Increased number of sanitary sewer manholes and storm drain catch basins;

• Need for slope stabilization; and

• Increased quantities of excavation and embankment.

In addition, subdivisions developed at higher elevations may require construction of a water pump station and reservoir to assure adequate water pressure for domestic use and fire fighting purposes.

• Cost Analysis. Estimated construction costs for the CBJ's land disposal program were developed by analyzing actual cost data from recent Capital Improvement Projects (CIP) and applying those costs to subdivision development. Another source of information were local consulting engineers experienced in subdivision design. They were interviewed for their opinions and cost estimates.

CIP's are required to pay federal or state established wage rates, under the Davis-Bacon Act, if the project construction costs exceed $2,000. These wages result in an increase of approximately 15% to 17% to the overall construction cost. This must be taken into consideration when using CIP unit costs for estimating subdivision development costs. The unit prices used in this report are unadjusted CIP prices. If the subdivision is developed by the private sector, then the final construction estimates given here should be adjusted to account for the lower wages.

The cost analysis developed in this report is based on the assumption of a relatively flat site. As previously discussed, steeper topography will result in higher construction costs which will need to be addressed on a case by case basis.

Seven aspects of construction work were analyzed to derive an estimate of total costs. The seven categories include:

• Clearing and grubbing

• Excavation and embankment

• Sanitary sewer systems

• Water systems

• Storm drainage systems

• Street improvements

• Private utilities

Each of these seven categories of work are addressed in the paragraphs below.

• Clearing and Grubbing. Clearing and grubbing involves the removal of all trees, shrubs and approximately one foot of the organic surface material from the street right-of-ways. CIP costs for clearing and grubbing range from $10,000 to $12,000 per acre. This equates to approximately $7 to $9 per linear foot of street right-of-way per lot (assuming a lot each side of the right-of-way).

Excavation and Embankment. The quantity of excavation and embankment is dependent upon the site topography. For a relatively flat site (slopes less than 4%), excavation will entail removing thirty inches from the roadbed and replacing it with suitable, non-frost susceptible, imported material. Some areas may require soil removal to depths as great as five feet, depending on soil conditions. Filter fabric is often used to bridge weak soil areas.

As site slopes increase, the quantity of excavation and embankment may increase considerably. For example, if the slope increases from flat to 12%, the typical road section excavation quantities might increase by as much a 80%. Similarly, the embankment quantities might increase by 30%. These quantity increases will depend on the balance of cut and fill in the road's cross-sectional design.

The cost of excavation and embankment is also affected by the haul distance required to dispose of, or import, material. If the excavated material can be used on-site in the building of the embankment or for building sites, then a lower cost for this item would be expected.

Based on the quantities involved, excavation costs on a typical CIP range from $6 to $12 per cubic yard. Embankment costs, using imported material, range from $12 to $15 per cubic yard. Assuming a subcut excavation of thirty inches for the minimum paved roadway (CBJ Standard 102), the per lot cost for road excavation would range from $2,090 to $3,190. The cost per lot for imported road embankment would range from $3,190 to $3,960. These costs include all equipment, labor and materials.

Rock may be encountered during site development and require removal. The values used in this analysis are for situations in which conventional excavation methods are used and do not include the costs for blasting and rock excavation. The cost for rock excavation may range from $50 to $90 per cubic yard.

• Sanitary Sewer System. The improvements considered in this category include all labor, materials, and equipment necessary to provide a complete sanitary sewer system including:

• Sanitary sewer main

• Manholes

• Cleanouts

• Service laterals

• Trenching and bedding

The actual project costs for CIP sanitary sewer utilities analyzed in this study ranged from approximately $28 to $73 per linear foot of street. In preparing cost estimates for a typical subdivision, a range of $25 to $35 per lineal foot per lot should be reasonable. The higher per-foot cost for some of the CIP's was due to steep terrain and constricted working space in downtown street reconstruction work. These estimates assume gravity flow to an existing public sanitary sewer system that is adequately sized for the additional sewerage flow and does not require a lift station. If a lift station is required, the cost should be increased by approximately $35,000 to $45,000 per station.

• Water System. The improvements considered in the category include all labor, materials and equipment necessary to provide a complete water system including the following:

• Water main

• Valves

• Fire hydrants

• Residential services

• Trenching and bedding

Project costs for CIP water utilities analyzed in this study ranged from approximately $28 to $86 per linear foot of street. A per-lot cost for a typical subdivision is estimated to range from $25 to $35 per lineal foot per lot. The higher cost per foot for some CIP's was the result of dual waterlines (both high and low pressure) existing in the same roadway. Another factor was the limited working conditions in narrow, downtown streets. This estimated range of costs assumes the water main to the subdivision site is of adequate size and pressure.

Two design scenarios that may have a significant affect on water system costs are 1) an undersized water main serving the proposed site, and 2) site elevations which exceed the pressure range of the water main serving the site. Either scenario could result in the developer being required to upgrade the existing water main, install a reservoir and/or install a pump station. The analysis of these types of improvements is beyond the scope of this report, although waterline pump stations historically range in cost from $200,000 to $300,000 and reservoirs have historically cost from $0.50 to $1.00 per gallon of water stored.

• Storm Drainage System. The improvements considered in this category include all labor, materials and equipment necessary to provide a complete storm drainage system including the following:

• Main line collector pipes

• Catch basins and manholes

• Service laterals

• Trenching and bedding

• Concrete inlet structures and headwalls

The actual project costs for CIP storm drainage utilities analyzed in this study ranged from approximately $23 to $69 per lineal foot per lot. In preparing a per-lot analysis of a typical subdivision, an estimate of approximately $25 to $35 per linear foot per lot should be reasonable.

The cost and time necessary for permitting should be taken into consideration if the outfall for the storm drainage system is to a river or wetland under the authority of the Army Corps of Engineers. Unanticipated costs that may result from an Army Corps of Engineers permit include oil/water separators, holding ponds, settlement basins and other storm drainage control structures. Cost analyses of these types of structures are beyond the scope of this report.

Another storm drainage consideration is the impact on downstream properties that are to receive the storm drainage. New storm drainage systems can increase the amount of storm water flow to downstream sites or systems. The receiving sites may not be able to handle the increased flows and the developer may be required to construct storm drainage improvements to the downstream sites or retain the increased storm drainage volumes on-site and release the water at the original "natural" rate. These conditions merit attention; however they are site specific and are beyond the scope of this report.

• Street Surface Improvements. The improvements considered in this category involve providing all labor, materials and equipment necessary to provide complete street surface improvements including:

• Base course grading

• Concrete curb and gutter

• Concrete sidewalks

• Asphalt paving

• Striping

• Topsoil and grass seeding

The actual project costs for CIP street surface improvements analyzed in this report ranged from approximately $25 to $60 per linear foot of street. These numbers represent the reconstruction costs for narrow downtown streets and do not reflect the costs for wider subdivision streets with full street improvements.

In preparing a per-lot analysis of a typical subdivision lot, an estimate of approximately $75 to $85 per linear foot per lot would be reasonable. This cost includes six inches of base coarse material (D-1 grading), concrete (Type I) curb and gutter on each side of the street, six-foot concrete sidewalks each side of the street, two inches of asphalt pavement, four inches of topsoil each side of the street, and hydroseeding. This cost range is for full street development and will vary for areas zoned for lesser design requirements.

• Power, Street Lighting, Telephone and Cable Utilities. The improvements considered in this category include all labor, materials and equipment necessary to provide complete underground private utilities and street lighting for a subdivision. In doing a per lot analysis of a typical subdivision, an estimate of approximately $9,900 to $13,200 would be reasonable.

• Consultant Design. Consultant design services for subdivision development typically include the following:

• Surveying

• Soils investigation and testing

• Lot and right-of-way design

• Street and utilities design

• Construction administration and inspection

The costs for these services typically range from 10% to 13% of actual construction cost for design and 8% to 12% of actual construction cost for administration and inspection, depending on the involvement requested by the developer.

The developer will also be required to pay the actual costs for the CBJ to hire local consultants to provide construction inspection services. This cost typically runs 6% to 10% of the actual cost of construction.

A major concern for the potential subdivision developer is the amount of time it takes for consultants to provide these services in the Juneau area. Local engineering consultants estimate it takes ten to twelve months from the time of initial subdivision plan submittal to the CBJ before construction can begin on major subdivisions. A major subdivision is defined as any subdivision greater than four lots.

 

Costs Summarized

The following tables summarize cost ranges for subdivision development as described above. The cost estimates are based on general assumptions and should be used with caution. Theses figures could be used for budgetary purposes in determining initial cost estimates if the CBJ were to proceed with development of its parcels. Each potential subdivision site will have special design and construction concerns that must be taken into account in developing a preliminary cost estimate. The estimated cost of construction must be continually updated by the engineer throughout the design process to track and control the development costs.

This information is given in a cost per lot and cost per linear-foot per lot basis. The cost per linear foot per lot figure assumes that there is a lot on either side of the roadway. The cost of construction of the roadway and improvements are split between the two lots. If a subdivision has only one lot fronting a roadway the cost figures for these improvements should be doubled. The following assumptions were used:

• Design density is two lots per acre

• 25% of each acre is used for right-of-way or other dedicated public use

• Only the street right-of way is cleared

• Road frontage per lot is 110 feet

The resulting construction cost for an Urban Standard for this study range from $31,511 to $41,019 per lot. In comparison, local consulting engineers have been using $25,000 to $40,000 per lot as a rule-of-thumb, based upon their past experience with local subdivision development. Considering the conservative approach taken with this analysis and the full development standards used, the range difference is not unexpected. It is recommended that a construction cost range of $35,000 to $50,000 per lot be used for subdivision planning.

The resulting construction costs for a rural standard range from $20,829 to $28,200 per lot. A rural standard, for this study, deletes cost for sanitary sewer and storm drainage systems, and reduces the costs for street surface improvements. A typical rural subdivision will not be paved and will have ditching rather than storm drainage. The costs for the water system are included because most areas of the CBJ, urban or rural, are served by the public water system.

As previously stated, construction costs for each site must be considered independently. A detailed feasibility study should be considered for any site before estimates of construction are prepared. The feasibility studies should include research into CBJ design requirements, available public utilities and access, topography and soils conditions, and a preliminary lot and street layout. In this manner, more detailed and valid project costs can be determined.

Table 15

Subdivision Construction Cost Analysis - Urban Standard

(1995 Costs)

Description

Cost Per Lot

Cost Per Linear Foot

Per Lot

Clearing and Grubbing

$770 to $990

$7 to $9

Earthwork    
Excavation

$2,090 to $3,190

$19 to $29

Embankment

$3,190 to $3,960

$29 to $36

Sanitary Sewer System

$2,750 to $3,850

$25 to $35

Water System

$2,750 to $3,850

$25 to $35

Storm Drainage System

$2,750 to $3,850

$25 to $35

Street Surface Improvements

$8,250 to $9,350

$75 to $85

Private Utilities

$9,900 to $13,200

$90 to $120

Subtotal @ CIP Rates

$32,450 to $42,240

$295 to $384

Minus 17%

(Davis-Bacon)

<$5,517 to $7,181>

<$50 to $65>

Subtotal @ Private

Rates

$26,933 to $35,059

$245 to $319

Plus 10%

(Consultant Costs)

$2,693 to $3,506

$24 to $32

Plus 7%

(CBJ Inspection Fees)

$1,885 to $2,454

$17 to $22

Total Construction Costs

$31,511 to $41,019

$286 to $373

 

 

Table 16

Subdivision Construction Cost Analysis - Rural Standard

(1995 Costs)

Description

Cost Per Lot

Cost Per Linear Foot

Per Lot

Clearing and Grubbing

$770 to $990

$7 to $9

Earthwork    
Excavation

$2,090 to $3,190

$19 to $29

Embankment

$3,190 to $3,960

$29 to $36

Water System

$2,750 to $3,850

$25 to $35

Street Surface & Drainage Improvements

$2,750 to $3,850

$25 to $35

Private Utilities

$9,900 to $13,200

$90 to $120

Subtotal @ CIP Rates

$21,450 to $29,040

$195 to $264

Minus 17%

(Davis-Bacon)

<$3,347 to $4,937>

<$33 to $45>

Subtotal @ Private

Rates

$17, 803 to $24,103

$162 to $219

Plus 10%

(Consultant Costs)

$1,780 to $2,410

$16 to $22

Plus 7%

(CBJ Inspection Fees)

$1,246 to $1,687

$11 to $15

Total Construction Costs

$20,829 to $28,200

$189 to $256

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