Cursed By Knowing The Numbers

I have been producing architecturally significant homes for ten years now.  Along the way, I have learned a few things that the pros use that can really make a difference in your home [and in our own home] that help make waking up in the morning an Insanely Great experience.

Make one or more of these part of your New Year's resolutions:

  Buy and have handy a copy of Christopher Alexander's A Pattern Language.  It formalizes many of the spatial relationships into a grammar for great residential design.  It is a book you can jump in and out of when you are looking for "how to say" a solution to a site, a problem, or a requirement.

Install a Skylight in your Bathroom.

Install Dimmers on all dimmable Circuits.  I like the Lutron Maestro dimmers, about $25 at Home Depot. All your circuits (other than closets or garages) should be dimmable.

No naked bulbs.  You want to see the wash of light, not its source.

Experiment with LED's.  We still need a warm white version in the 3000K range, but we are getting there.

Add a lamp--layer the lighting in the room. Uplights behind furniture act as background lighting at night.

Combine the three types of lighting--ambient or background lighting; task or focused lighting, and mood lighting (candles).

Get paid for being Smart & Green.

Install a Solar Roof Fan.  This lowers the cooling load in the summer.

Check your insurance coverage.  Increasing home values over the past three years may have left you exposed on what is probably your largest asset.

Install a photovoltaic power system to replace the higher tariffs of power.  Look to replace any power that costs you more than $0.20/KWh (>130% of baseline in PG&E territory).

Bring more southern light into your home--windows, clerestories, anything to get more daylight into your home.  Install/Replace a window with one that better captures the light or view.

Find a Better Shower head.

If you are thinking of selling your home, check your property information on Zillow.  If someone knows the property owner's name--a matter of public record--they can post false information about a property because Zillow does not independently verify it.  Zillow says it will ban anyone who posts maliciously from claiming homes in the future, and will respond to owner comments in one day.  False information on Zillow about your property can be one more roadblock to a successful sale.

Posted by Ted at 1:58 PM | Permalink

  ...in producing insanely great places to live.  And plenty of links to help you figure out what needs to be done in the New Year.

Elegant Green--building sustainably without  screaming green.  Daylighting, sustainable materials palette, fresh air,  and employing logical common-sense solutions on interior finishes, and energy use.  

Performance Green--

• Photovoltaics make sense to replace any power requirement that PGE is charging you 130% of baseline rates or greater.  This tariff is currently $0.23/KWh.  Photovoltaics pencil out at greater than $0.20 for homeowners, and at all investment properties where Owners cannot pass through electrical costs to tenants and can take advantage of the 30% investment tax credit and depreciation shelter.
• Bamboo--will become the "hardwood" [actually a very attractive weed] of choice due to its workability, sustainable growth, hardness,  and value.  I like working with it, and the meaning behind the material says alot.  Be careful where you buy it--the hardness of bamboo harvested at three years is a fraction of its hardness when fully mature (~six years).
• Green building materials--flooring, glass, steel, copper, will become more widely used as the carbon footprint is understood. 

Triple Bottom Line Development is the way I am underwriting all my projects going forward. 

Everyone starts to understand the economics of climate change. 

UMXD--land uses as encrustations around experiences--pull people back to 24 hour cities, next to water, alongside openspace to better capture the experiences of daily life.  Livable streets.  Make transit options to the SOV a better experience.

Residential Land--the crash and burn of the public homebuilders mean that there is land available--buy carefully, the public builders will be back, and they will need land. Demand should be lower now than in the foreseeable future.  Probably a three to six month window.

Construction Costs increase at a more measured level than the 20 to 25% of recent years, primarily due to the dollar's continued depreciation.  We are baking in 10% cost increases next year on materials and 8% on labor.  No further pop in trade contractor OH&P, which almost doubled in the last 24 months. 

Carbon Neutral Development--is a great concept, but I don't know if investors here in the Bay Area will really give a flying flip about how we spec and produce our product.  It all gets down to the numbers and how well our neighbors understand the economics of climate change, and leaving things better than they found them.

Demographics-- William Frey of the Brookings Institution recently produced

Two trends that are not happening uniformly across the United States.

Boomer Induced Aging--Fastest growing demographic segment will be the baby boomer gains in the 55-64 set.  Predicted to age in place.

The age wave of well-off,  young seniors continues to emerge in Vegas, Denver, Dallas, and Atlanta.

The Bay Area trends younger with recent immigrant driven population growth, and immigrant families (>20% of the population), becoming a "New Minority" locale.  The Bay Area, like California, Nevada, AZ, Texas, Florida and NY are both "aging" with aging in place Baby Boomers and "younging" with new immigrant minorities.  Different real estate products in a vibrant economic setting

Look for land use patterns responding to this generational segmentation--for example, Riverside CA has the greatest distinction--only 3 of ten children are Caucasian, while 7 of ten 65+ are caucasian.

Color--Pantone's interior paint color forecast for 2007.

Longer term trends:

 Competitiveness--Superstar Cities, as described in the NYT, are forcing us in the "insanely great places to live" industry to focus on the changing market.  Living in SF, NY, or London is now perceived as a "scarce luxury good", and demand is reflecting this.  Michael Bloomberg, Gotham's mayor, political pragmatist, and urban planning visionary has been establishing a vision for New York that accomplishes three things:

• Accommodates a 12% increase in population over the next 25 years,
• Rebuilds NYC's infrastructure--water, transport, communications.
• Transforms New York into a "sustainable city", including the pledge of New York having the cleanest air of any big city in America.

Housing Equity--providing a balance of housing options to meet our regional housing needs.

VLJs change high end travel patterns.  Eclipse Aviation is getting the bugs out of their glass cockpit avionics, and ramping up production.  Ability to fly in Class A airspace, 1200 mile range and 2400# payload at a total op costs of $352 per flight hour, create demand for this flight option with ability to land at over 10,000 US airports.  Initial cost of $1.5 million are driving the economics of this travel option--but wait till they get the glass cockpit technology straightened out.

Ground based ops at exotic locales--Angwin in Napa County--merit further study.

Big Urbanism-- where best to participate in this value chain-- where can my company utilize its tactical advantages, rather than laying siege to a large land holding.

Posted by Ted at 1:30 PM | Permalink

The single most difficult challenge in producing the architecturally significant home is the ongoing check of budget versus scope of work.  Quality construction is best attained by a team that knows what is expected, when it is needed, and that all team members are focused on resolving issues before momentum and equilibrium are affected.

An on-time, on-budget development project flows--it has a tangible equilibrium and momentum to the work.  I maintain this momentum by:

• Establishing real budgets based on historical costs upfront, before commencing design and development work.
• Designing to a budget.
• Recruiting reputable contractors.
• Contracting to a budget.  Contracting with enforceable construction documents adequate to defend the price.
• Resolving any scope changes or unforeseen items against the budget before folding them into the scope of work.
• Reconciling current scope to current budget once per month--Our Cost to Complete.
• Reconciling current work in place momentum against current scope once per month--Our Time to Complete.
• Quick resolution of open issues requiring clarifications or resolution--the HotList.
• Ongoing dialog with planning and building officials.
• Current project information maintained and distributed.

If you must build, there are a lot of us who understand.  The challenges facing you are not really unique, and have been surmounted before.

Keep your eye on the prize, and get started.   Drop me a line if you need a hand, or a positive word.

Posted by Ted at 4:19 PM | Permalink

Change orders present an opportunity to increase profit margins on a job for a contractor.  They provide an Owner a handy tool to accomplish deviations from the originally intended work based on better information, superior materials, or simply understanding the work from a "full scale model" approach.

Equitable adjustment of the construction contract can provide a fair and balanced approach to the need to increase the scope of work without unduly enriching the contractor.  I covered the sources of changes here.

RFI's, or Contractor Requests for Information, are the lead document in identifying issues that are not clearly understandable from the working drawings and specs.  Projects get in trouble when there is a cascade of minor undocumented changes, contractors respond to them and, at some point, start to realize they are over budget.  RFI's are a way of documenting minor changes and understanding the cost, if any, of implementing a requested change.

Changes happen.  Contractors don't get to say "I don't wanna" and Owners have to negotiate for an equitable adjustment to the contract.  Changes can be ordered, and there is no way to compel pricing.

This is what I do to help the team equitably adjust our contracts for changes:

• Original contract shows quantities and unit prices for typical assemblies.  For example, retaining walls are so many $/SF, or $/CY of concrete.  Flat work is one price, structural slabs are another.  Electrical is priced at so many $/fixture.  Adjustments up or down are done from these unit prices.
• Mockups and color samples are called out in the submittals and are used to establish acceptance criteria.
• Shop drawings are contract documents and supercede dimensions on drawings.  Contractor responsible for tying back all these dimensions.
• RFI's are incomplete without the Contractor's recommendation of an on-time, on-budget resolution.
• Owner/Architect needs to understand when complete information is needed to maintain intensity and pace of the work.
• A contingency account is set up to provide for resolution of minor design errors and omissions, unforeseen conditions, and code compliance issues.  The balance in the account at the end of the job is split between the Contractor and Owner, providing a bottom line incentive to the Contractor to achieve faster/better/smarter resolution of these issues.

Posted by Ted at 3:48 PM | Permalink

Built quality is the touchstone of a contractor's operation...at least as far as the Owner is concerned.  Quality is the only element of a project that survives until resale, long after the delays and the value engineering are forgotten.

I define quality in that you get what you inspect, not what you expect--insight provided to me by one of my chief petty officers when I was a wet-behind-the-ears ensign in the US Navy Seabees.

The best way to get a fix on quality is by seeing mockups and samples to provide a real example of what is buildable, and hence approvable. 

The second best way is to find where it was done elsewhere and find out who did it.  Look at what they did, and see how close it is to where you want to end up.  Architect's monographs can be a great source of solutions.  When I'm stuck, sometimes I wander over to Bill Stout's bookstore and look for solutions.

Specs help get you in the general ballpark, but seeing is believing. 

In our world of design once, build once, operate once, I use mockups and samples extensively to get agreement on what it is that we want--how materials meet, finish conditions, trim options.  I usually have a mockups budget to help get us iterating through the finish options to get us where the building needs to be.

Posted by Ted at 3:03 PM | Permalink

One of the most frustrating things to encounter on a jobsite is to find a crew working off an obsolete set of plans, installing assemblies that will have to be torn out.

Managing change is easier when the plan is current, distributed, and accepted by those who will be performing the work.  If you can shave a couple of months off a project through open-door collaboration tools, the savings are real when builder overhead is $30 to $50K per month.

Here is what I need from an online interface...

• Plans are available to all team members in .pdf format.  Architecturals, specs, SK's, OSK's, CSK's with acceptance chain.
• Current milestone schedule is posted, with time to complete tracking against last known, current and if on the critical path.
• Finish schedules.  Fixture Schedules.  Door and Window Schedules.  Hardware Schedules.
• View, markup, upload and download drawings and SK's.
• Time to Complete.
• Hot List, including RFI log.
• Change order tracking log.
• Current Cost to Complete.
• Photo journal/weblog tracking news, changes and touchpoints.

Am evaluating a couple of project collaboration tools right now

37 Signals Basecamp web-based software may be a good first step.  It runs from $50 to $150 per month.  Free one-month trial.

Anticipate Acrobat will be the primary markup tool.  Need database functionality for tracking milestones, RFI's and change log. 

Do you use a web based collaboration tool?  Any recommendations?

Posted by Ted at 2:52 PM | Permalink

Nothing screws up a project faster than cascading changes forcing remodeling and redeployment of tradesmen.

Changes folded into the project late end up costing you two to four times what they would have cost if in the initial scope of work.  Reversing progress is demotivating.  Changes happen--all I ask is that everyone understands the true need, the best solution, and the true cost before you start demolishing what you have built.

I posted about where changes come from here.

Projects reach a tipping point where the motivation changes from "Perfect is good enough" to "Good enough is perfect". 

Understand where you are vis-a-vis this point in your project.

Here are five tips on how to avoid impending disaster by changing work mid stream:

• Freeze the Design.  Owner and architect agree to freeze the design at a point, and not backtrack.
• Appropriate finishes sometimes only become apparent in the "full scale model stage", that is, during construction.  This can trigger changes to the finish schedule.  Understand what elements in the finish schedule are placeholders and what lead times are to procure the options.
• Faster/Better/Smarter.  Substituting a better, faster, or smarter finish may help progress--look for hangups due to E&O (errors and omissions) where you can leverage a better solution to maintain pace and intensity.
• Keep off the critical path.  Know when information is needed by the building team and how the scope of work cascades through this area and this item of work.
• Live with it.  If it is a change to finishes, casework or cabinetry, hold off until after you have lived with it for a while.

Making changes late have costs beyond the direct labor and material involved in the direct scope of work.  Make sure you understand these costs when asking for this change.  There is a value to the new and improved solution, just know the numbers involved to get you there.

Posted by Ted at 1:08 PM | Permalink

The critical path, or flow of a project’s momentum, is always changing.

Know what the team’s next three milestones are, who owns them, and how close you are to accomplishment and acceptance.

Stay off the critical path—have your deliverables provided on-time, and in a way that is easily acceptable by who is taking custody for this delivering this solution from you.

If your solution is not acceptable to the next one in your project foodchain, you own the problem of making it acceptable.

Posted by Ted at 8:55 PM | Permalink

The pace and intensity of a job tells you a lot about the team producing it

 It can tell you a lot about how good the schedule is, and whether people actually do what they say they will.

Jobs lose pace and intensity through cascading change orders, encountering unforeseen obstacles, or lack of buildable information.

Quickly clarifying design intent to maintain pace and intensity is a critical responsibility of the entire team.

This is how to get the information out to the team to build and maintain the pace and intensity on our projects

Acceptances are the way to build schedules.

 Track accomplishments, not start dates.

Maintain current project information—plans, specs, and schedules--in an accessible online website so everyone can get current copies whenever required. Have everything in .pdf format

Track issues via Hot Lists to track conflicts, omissions, or errors in articulating design intent. Make sure someone has both action and the tools necessary to find a solution.

Use RFI’s correctly. Requests for Information are not a substitute for reading and understanding the plans and specifications, nor for adding scope or initiating changes to the project.

 There should be enough information available so that the RFI process is confirming design intent, not developing it.

Make sure submittals are correct. Do they comply with the specifications?

Will it fit? Will it get here in time? What is missing?  Build it on paper first.

Generate options for errors and omissions discovered for the Owner to review and accept.

 Define what the error or omission is clearly, and list a range of solutions with money and time effects. Contingency accounts are useful here in that everyone becomes focused on the optimal solution is, rather than trying to duck blame.

Describe any  changes needed completely and build them on paper first. Is the cost, in both time and money, understood and agreed to by all parties? Avoid making changes on a time and materials basis unless you are exploring an unforeseen condition.

Wander around. Understand how the different crafts work with and around each other. Learn what they need to get their job done. Ensure the superintendent understands.  Appreciate what is happening.

Get it done. Now. The more time and delay on making a decision, the more it will effect downstream work

Understand how you got here. Is this a chronic weakness or a one-time deal.  Repair appropriately.

A happy job is one that is clean, safe, and trucking along on schedule.

Posted by Ted at 7:45 PM | Permalink

At this point, your architect and you have developed a common language and she has  captured what you want to build into a set of design development drawings and outline specs.  You now need to convey this intent to your builder in a manner that gives you certainty on the cost--the Cost to Complete--and duration--the Time to Complete.  Architects tell me that designing an architecturally significant home to a budget is difficult in the best of times, and impossible without a reputable contractor on the team to provide good pricing feedback.

Understand that your builder, if they are like most reputable builders, is motivated by two things:

• first, getting new projects, and
• after getting the project, increasing their margin, and reducing their risk.

This is how good contractors operate.  To get your contractor to build what you want, you need to first understand what they want.

There are two issues in getting the contractor to build what the architect wants.  The first is recruiting a reputable contractor that will build in accord with the architect's documents.  The second issue is that the standard AIA cascade of documentation does not do much to defend price, reduce risk, and maintain equilibrium in pricing power on margins. 

Recruiting A Reputable Contractor:

• Contractor Bench Strength--have their subs done work of this level of quality before?  Look at their subcontractor bid manual.
• Estimating--are their quantity takeoffs accurate?   Are they broken down into units and quantities or are they just lump sums.  Are performance specs called out and met (waterproofing and flashing).
• Supervision--the singlemost important person on the job.  Make sure you get the right person for the job.  Honest, forthright, experienced.  How did they punchlist their last job?
• Schedules--what is the critical path?
• Risk--what do they foresee to be the risks of the job?  How are they dealing with them?  Have them walk you through their notes to the AIA general conditions for the construction contract.  Understand any risk shifting that is happening here.
• Margin--understand what this number really is.

Producing Enforceable Construction Documents:

• Accurate project information, such as surveys, soils reports, local rules and regulations,  existing conditions if a remodel.
• Accurate and comprehensible plans, with sections, details, elevations, and matchlines fully coordinated.  Comprehensible specifications.
• Complete finish and fixture schedules with version control.  Headend information on electronics.
• Performance spec information on acoustical, waterproofing, HVAC, line voltage electrical, plumbing, and horizontal and vertical control.  Trade contractors need strong design skills to be responsive in the design/build environment.
• Constructable detailing.  Details coordinated with plan and elevation.

The pricing and negotiation period is the time to surface these issues.  Pricing equilibrium is lost if these issues are discovered during construction.

Posted by Ted at 8:08 PM | Permalink

Insanely great homes are built from a common language, a patron that understands what they want, and has the resources to get it done.

Establishing this common language, establishing the values and principles, and articulating this in a way your designer understands so that they can develop the working drawings is the next major challenge you face, after right-sizing your budget.

 
Your architect is motivated differently than you are. 

This is my post on why people build.  It is the design, material, and recognition that drives your architect and your common language needs to incorporate these motivations.  Understand what motivates your architect and you are more than halfway there.

Posted by Ted at 5:03 PM | Permalink

OK-you've decided you want to build.  The first challenge I face in producing an insanely great place to live is establishing basic requirements, and putting a number to it.  This first pass number is my instant feasibility test of size times unit pricing against resources available.

Agnes Bourne says:

 "When creating your physical world, it is good to realize that this place is a reflection of you.  Knowing what matters to you is important in the planning of these spaces...What matters most to you?"

If the first cut cost is more than your resources available, your choices are:

• increase the budget
• shrink the size by reducing program
• shrink the footprint by building up
• shrink or eliminate the basement, or
• leave space unfinished.

A major fallacy of modernism is that spaces are multi-use.  Spaces may start as multi-use, but they end up as single-use spaces.  Develop your program with a focus on single use spaces.

Stratify your program into <strong>good, better, and best</strong> level of finishes for each component.  Scope creep during construction tends to drive everything toward the best level, this first cut is a good way to draw a line in the sand about how far you are willing to go.  This post talked about how finishes and casework and cabinetry are the big variables in construction costs.

Iterate, iterate, iterate.  Refine the spirit of your project.  I will be posting additional insight on refining what you want in your physical world in future posts, so if this is where you are right now, stay tuned.

What is the right unit pricing number?  Costs have been going up 2% a month for the last two and a half years, so right now that number is both moving, and scary.  Your contractor should have a sense for what his recent jobs cost him, or drop me a line and I can give you my take on current costs vs. value.

Posted by Ted at 3:44 PM | Permalink

...in the practice of producing insanely great places to live.

We really are getting to the point where we are moving bits and only doing windshield tours as a final check.  Property data is now available online, and the amount of public data is tilting the value add equation.  And getting to know the numbers has gotten dramatically easier with online tools--but it takes a fair amount of time to become proficient--

"Give me six hours to to chop down a tree and I will spend the first four sharpening the axe."

--Abraham Lincoln.

Here is what I use when turning over stones to find a suitable project:

1.  Google search rank has changed how I develop alternatives.  The single greatest tool I use.

2.  I keep Google Earth open on my desktop all day.  Handy for virtual low altitude fly-bys of potential sites.  I have a two monitor setup using an NVIDIA Geforce 7800GTX driving two Viewsonic VA1912wb's.  I keep Google Earth on one monitor and my current app on the other.

3. Zillow, and its user blog, to get a sense for development values around the sites I look at.

4.  For trends in residential markets, Zindex.

5.  To understand how current and former residents are trash-talking multifamily properties I am underwriting, I check Apartment Ratings.

6.  For property acquisitions, I use re3w.  It only works on IE--is really buggy on Firefox, my preferred browser.  And it uses MS Visual Earth, not Google Earth.  Let me know if you have a better alternative.

7.  Proformas are run on MS Excel, it has the flexibility to do whatever I need it to.

8.  I use Dreamweaver to put together my web apps--great product, but I am only using about 10% of its capabilities. Need to sharpen this tool...

9.   Movable Type v3.34 is my blogging software, a lot of brain damage setting it up on my server, but now seems to be running without a problem.

10.  When I am laying out or checking elevations on site, I love my DeWalt Laser rotary level--self leveling, uses the standard DeWalt 18V battery packs, and beeps if it goes out of level.

11. And I never leave home without my trusty Treo 650.

12. My Leatherman Juice is essential to McGyver'ing my way out of a problem.  It is always in my pocket...except when on my way to the airport.

What tools do you use?

Posted by Ted at 4:08 PM | Permalink