Any developer in business today knows that rising development costs, especially land prices, make it hard for deals to pencil out anymore.
This trend has forced developers to seek higher-density solutions to mitigate the average rent increases. But higher densities trigger different building types, such as steel and concrete, which are significantly more expensive and result in total costs that can’t be supported by competitive market rents.
To find solutions, developers and architects need creativity and flexibility in their construction methods and systems. Enter hybrid products, which can help achieve incrementally higher densities at costs substantially below those associated with full high-rise concrete and steel.
Hybrid structural systems, prefab panels, and modular components such as bathrooms provide affordable alternatives to conventional building materials while meeting required densities and improving construction quality, which in turn helps developers design and build better-quality communities with more control over cost.
Such technology has led to a new way of thinking in the apartment industry; namely, studying alternatives up front, in the planning stage of a building project; bringing precision to estimating; understanding system details to minimize unanticipated extra costs; and developing insight into geographically specific cost implications for labor and materials.
These hybrid systems have rules, however: Designers and developers must understand the logic behind dimensioning, maximum spans, structural shear resistance, and other technical matters. They must also optimize system components and avoid nonstandard elements, such as additional, nonstandard steel framing components.
The key is to adapt what’s out there to each individual project.
Approach Design With an Open Mind
An open-minded, flexible approach begins with understanding available systems, selecting the most appropriate choice, and optimizing your project design within those constraints. While housing design is inherently creative, there must also be a methodical approach to optimizing the building systems you choose, adapting to project-specific circumstances.
For example, typical four-story, Type V wood-frame construction could change to five-story, Type III construction, increasing density by 20% to 25% with only a marginal increase in the construction cost. A Type I podium slab could be added and—with recent code changes—two levels of units, common spaces, retail, or parking could be placed underneath.
Another approach is to use a proprietary Type I or Type II light-steel hybrid system, such as Hambro, Infinity, Ecospan, Epicore, or Prescient, building up to 12 stories over a podium at a cost that’s higher than wood frame but significantly lower than traditional commercial concrete or steel high-rise construction. Such creative solutions provide more density on-site while optimizing the construction economies.
Deliver a Creative, Project-Specific Application
Although applying new technology to construction has its benefits, continuous fine-tuning is required. As the design progresses, initial broad-stroke guidelines must be refined and shifted to address the structural and production questions that emerge during the technical detailing of later design phases. To optimize hybrid systems, you must develop a set of guidelines and work within their constraints, focusing on keeping framing costs as reasonable as possible.
Consider some examples:
The Prescient system works on a 2-foot grid, so typical unit layouts have to be immediately reconciled with that grid. In addition to the spatial order, structural elements beyond panels and trusses are crucial parts of the system. Optimal design should eliminate the need for extra columns, shear walls, and other elements that are “non-Prescient.”
Such “extras” can have a significant impact on the delivered cost of the building. Understanding how these pieces fit together during the early planning phase allows for a design that seamlessly incorporates these elements.
Panelized exterior walls are another example of prefabricated elements changing the landscape of mid-rise and high-rise housing. One project in Atlanta utilizes thin, precast-concrete sandwich wall panels. The panels contain built-in insulation and can be installed directly onto the frame. Because the building exterior can be finished quickly, construction can begin sooner on the interior of the building, reducing the overall project schedule considerably.
Such solutions are becoming more prevalent as their performance is validated with each subsequent project.
Balancing Costs Savings With Demand
One of the biggest issues for multifamily developers is how to deliver an affordable, market-driven community while satisfying investors. This sometimes requires a delicate balancing of construction economics and quality.
Understanding the reality of competitive rents in each location will drive design choices at a fundamental level. One project on the urban–suburban perimeter of Atlanta presented a challenge with construction costs that were higher than the area’s rents supported. Since land is a commodity in this market, adjusting the initial purchase price wasn’t viable.
The developer in this instance provided a program based on a fixed number of units at pro-forma rents. The site was small, with an aggressive density requirement, so it was challenging to figure out how to get all the programming on the site with adequate parking and retail facing the public thoroughfare. The solution was to increase density by moving from Type V construction to a Type III wood-frame building that wrapped around a freestanding garage.
Cost estimates from a contractor can present a somewhat myopic viewpoint based on the builder’s own experience. An index cost model can provide real-time insights in such situations, but there are still some things that are unique to each site. Using the index model as a starting point, teams can dig deeper to find solutions to the more-nuanced, project-specific challenges.
In addition to the numbers supplied by contractors, a historical price index can provide additional clarification. At Niles Bolton Associates, we’ve developed an index of costs for certain basic construction and product types that helps estimate project costs. The index includes templates for different density solutions, making the project team less reliant on inconsistent reports that may not consider escalations in the prices of materials, labor, and, especially, land.
It becomes more complicated than just increasing density when a combination of hybrid solutions is required to achieve optimal value. Having some knowledge up front of relative cost options for construction materials helps create realistic budgets and verify the numbers provided by contractors so that everyone on the team is on the same page.
Verify That Your Applications Are Appropriate
Experienced teams will know what systems are available for implementation in a new design and how to choose the best fit. This comes not only from familiarity with alternative systems but also from knowing what questions to ask in advance.
New technologies may look promising upon initial review but may not always fit seamlessly into a particular application. It helps to have a rubric by which project teams can vet the potential system: Does the system have specific limitations? How does modular dimensioning factor in? What structural elements are included? Is noise transmission a consideration? What’s the construction erection efficiency? How predicable is the schedule, and are there clear time savings?
For example, a thin, precast wall panel may be great “in place,” but it must be structurally sound enough to be lifted and withstand cracking during delivery and construction. Precast-concrete structural systems for mid- and high-rise buildings are a new technology and may not have been tested in the given conditions, so evaluation and study become critical.
Evaluate the Site Conditions
Before proposing a solution, it’s crucial to examine the site and determine whether it’s effective for a given project density or product. Site configuration, topography, and allowable building footprint and heights must be considered. Developers want to know how many units they can put on a site and what systems will be ideal for each location. In some cases, it may prove logical to switch from one system to another.
With the range of potential building options growing as new technology hits the market, development teams have more options than ever before. Site and solution vetting, and careful tracking of data to optimize efficient use of a system based on the site and building configuration, will ensure the best possible outcome for all stakeholders.
Planning and zoning restrictions, also, can present obstacles, but communities are beginning to recognize that increased density can serve as a tool to mitigate traffic congestion, improve air quality, and provide affordable housing. Density that places housing within walking distance of workplaces, shopping, dining, and entertainment offsets the increased rents of mid- to high-rise construction by significantly reducing transportation costs while increasing quality of life.
Individual sites and their communities have unique needs, so potential locations must be analyzed prior to development for the best building system and the most efficient use of that system. For developers, designers, and contractors to make the best decisions, they must be armed with sound data. This requires communication between contractors and design firms and a shared understanding of the overall project mission.
Part of the goal of fulfilling that mission is creating a budget that will recognize the given site constraints and the design and materials needed to deliver a product that’s competitive within the target market. This means ensuring that a reasonable budget is established, the contractor is selected based on chemistry and previous experience, and a game plan for delivering a successful project is firmly in place.
Developments that fulfill all these key planning and execution elements will deliver the type of density that’s changing the way we view urban and suburban development.
