In the same way that no two designers have the exact same aesthetic sensibility, architectural billing is tailored to the demands of a specific project. Nonetheless, certain industry-wide guidelines do apply. Here, Archinect breaks down common architectural fee structures in the U.S. as they relate to residential construction projects.
Broadly speaking, architects determine their fees based on either a flat hourly rate or as a percentage of the project’s construction costs. The customary percentage in the U.S. varies depending on the type of project: a commercial structure, for example, will generally have a different rate than a residential home or a concert hall. There are the different phases of the project itself, each of which accords for a certain percentage of the overall fee: the initial design concept phase, schematic design, construction documents, and construction administration.
Residential house design can be quite complex: case and point, John Lautner’s Sheats-Goldstein House. Image via wikipedia.org.
However, designing a custom single residential family house is perhaps one of the most complex projects an architect can undertake. Partially, this complexity derives from the relationship dynamics between the architect and client, the condition of the proposed house’s site (it is a brand new site, or a renovation of an existing structure? Are environmental impact reports required? Is everything permitted, licensed, etc.?), and theBe wary of figures found online, as they are often based on national averages, and can therefore even out at a lower rate.approximate budget the client has in mind. Also, houses require incredible detail in a way that most commercial projects do not. Cabinetry elevations, for example, can easily require 100 hours to draft (although they are not usually included in a standard service package).
According to architecturalfees.com, a client almost never accurately estimates the cost of residential construction, making it easy for an inexperienced client to balk at the numbers an architect may initially present them. A client may also lowball their budget specifically to try and lower the architect’s fees. Additionally, an architect may use the AIA’s “Cost-Plus” method to add a “cushion” to their hourly fee structure, to make sure they don’t end up in the red.
Remember that all fee rates are subject to time, place and negotiation, but for general purposes of discussion, a commonly cited range for fees on a residential project is 6-8 percent of the construction costs, according to architecturalfees.com. However, this can also be at the lower-end of the spectrum, especially when compared to rates for projects in more competitive urban markets like New York or Los Angeles.
In general when calculating rates, be wary of figures found online, as they are often based on national averages, and can therefore even out at a lower figure. An LA-based architect told us they seek out “15% on smaller jobs”, but are aware of other locals getting as high as 18 percent. Another told us that an architect charging 15 percent is “doing very well indeed”, intimating that those clients must have multi-million dollar projects, and that they don’t know many architects getting more than 10 percent. Your mileage may vary.
Aside from the regional market, these figures can vary due to several factors. The total price of the project influences the percentage: as an example, a typical percentage for the rare house with a construction cost of over $50 million is 6.5 percent, while a house with a construction cost up to $100,000 would traditionally have a fee of 12 percent.
In this still from “The Architect” (2016), clients Parker Posey and Eric McCormack clash with their architect’s design for their dream house.
Here’s a quick look at some of the major factors that influence pricing:
RENOVATIONS VS. BRAND NEW CONSTRUCTION
Surprisingly to clients, renovations tend to be far more expensive than brand-new construction, partially because of the need for existing conditions drawings, which are electronically accessible documents of the pre-existing structure before any renovations or changes are made. (Clients: unless you have architectural drawings in an electronic format, you can expect to pay for the generation of existing conditions drawings: paper copies, while having a certain nostalgic value, aren’t usable by most architectural firms. Also, it’s considered fair to bill hourly for the creation of these drawings because no one knows exactly how long it will take to draw them.) These drawings in and of themselves can add 2-5 percent on top of the baseline 6-8 percent fee.
UNDERSTANDING OF SERVICESThe client needs to understand what services they are paying for, and the architect needs to understand what the client expects
As mentioned earlier, the detail involved in residential design can make it quite costly. This level of detail—for example, whether a client elects to have an architect draw electrical schematics, something architects don’t automatically do—is an item that should be discussed up front for the sake of both client and architect. The client needs to understand what services they are paying for, and the architect needs to understand what the client expects. Some of these services include contractor negotiation, project management, and construction administration.
Depending on the size of the firm and the complexity of the project, certain phases of the project may actually be outsourced to other firms that specialize in that type of work. Every firm has a slightly different attitude toward what a “full package” of services means, so it’s worth everyone’s time to very specifically indicate what is and isn’t included in the fee structure.
HEATED SQUARE FEET/HABITABLE VS. GROSS SQUARE FEET
Lastly, not all square feet are measured equally. In residential design/construction, square footage can be broken down into habitable space (aka “heated square feet”) and “gross square feet.” The latter is a figure of all available square footage in the unit; habitable space usually omits unfinished basements, porches, driveways, attics, and other spaces that would not be climate controlled. However, in order to create a reasonable fee structure, architects will factor some of the GSF into the habitable space to account for materials. A porch, for example, isn’t climate-controlled usually, but requires planking and railings, among other things. To bill for this, the architect may add additional space to the total habitable space calculations, even though the porch is not technically for inhabiting.
In sum, creating the fees for a project qualifies as its own kind of financial architecture.
This piece is part of our special editorial theme for July 2016, Domesticity. Submit to our open call for submissions through July 25, and check out related content here.