Why does it cost so much to build in the Roaring Fork Valley?

My conclusion is that it’s a change to the industry, not so much any one pressure point. To look at this changing industry, I chatted with folks, sometimes briefly, sometimes for hours at a stretch. Maybe you’ve had a conversation like this also, wondering about these questions: Why does construction feel like it’s getting harder? Why does it cost so much more? I have some takeaways, but this is the headline:

Building is a complex symphony with a lot of hierarchy – layers of it. Gone is the baton pass between one skilled tradesperson to the next. In its place is a system of checks and balances that, among other things, makes things take longer and cost more.

Construction is no longer blue collar or white collar, but some messy combination of the two. It’s in flux.

Here are some additional takeaways from some focused time thinking on this subject:

  • Projects take many years. Count them. Really, accurately, count them.
    Projects in this valley take 4 to 7 years. (And that throws out some at the edges). The average time elapsed between permit submission and certificate of occupancy in Aspen is 60 months. That means the whole project is even longer. 7 years? Perhaps.  The cost/sf data people are talking about (most of the time) is at least two years old, in terms of a new project, maybe more. When you compare cost to build to cost to buy, that’s comparing things that exist in two different time periods. People are weirdly optimistic about time.
    Even if you are looking at pricing when you are ready to start construction, the buyout is still years away, and your GC is doing the best he can to estimate a future cost on at least half of it. A lot of final pricing is later in construction and the buyout lands roughly halfway through construction (maybe slightly past halfway).  Halfway through construction is years after hiring an architect. That conversation you have about cost/sf in initial feasibility is not meaningful. Get the timing right, and nothing else, and you will be better prepared than most. It’s all about those expectations.
  • A New Construction Paradigm
    If we create a pie chart for cost impact factors, just reviewing labor and materials would not enlighten us. There is a bigger truth. There is a new construction. It is not exactly blue collar and not exactly white collar. It’s a messy combination of the two.
    That’s happening because of the demands of clients and jurisdictions. Regulations (requiring more materials, more labor, more professional consulting), sheer demand (popularity of our valley = supplier profit, sub-contractor profit, general contractor profit, less qualified and less trained individuals in trade and in management and more fixes for the isues that causes), complexity (full-time professional services hourly rates in oversight all through construction– on site and in an office, dozens of sheets of details, fees), architectural fireworks (fireplaces that appear to ‘hang’ in front of windows – re:above image, wild stretches of glass, cantilevers in single family construction, minimalism is more work, not less etc.).
    That stream of consciousness above is a brief scratch at the list of things that are evolving into new norms in construction. Wildly unpredictable construction costs is symptom of an unsettled industry. And, that imndustry has not landed into any new form. It’s just in the middle of a disruption. We hear a lot about prefabrication as a future for the industry. Surely that’s a part of it. I just think we’re in the eye of the storm right now.
  • HOW MUCH will it cost?
    My digs about data notwithstanding, the L+S summary of Aspen data says that Aspen projects having a first design meeting now (midway through 2025) will average $2500/sf by the time they are built. An ultra-luxe home could double that, and a modest remodel might cut that by half. This is Aspen only, other jurisdictions may be included in future versions as we can accumulate more datasets. This information is summarized in a PDF here.

 

I’d like to keep this conversation a live one and welcome your input.

Thank you for reading!

Regards,