New Home Construction vs. Renovation
Nov 30, 2022
I am not yet a homeowner and I have probably lived in more than thirty-five different rental properties in my lifetime (I must have stopped counting in the past few years). I am dreaming of becoming a homeowner in the next year and am trying to figure out what this might look like for me and my fiancé. I am interested in buying a piece of land to build something custom designed from scratch that will be exactly what suits the needs of me and my partner’s lifestyle right now, as I am equally interested in acquiring an older historic structure that has ‘good bones’ and lots of potential for renovating into something spectacular.
Comparing these two options is somewhat complex, as there are different layers of consideration in the decision process. There are a handful of empirical differences including financing, move-in readiness timelines, construction quality, total costs, embodied energy, and location options. There are also some emotional differences that might need to be considered with respect to the design outcomes of new construction compared to older home renovation and remodel.
One of the first decisions that a home or property buyer has to settle on is a parameter for the location of the future house. Realtors will always advocate that the future value of a home is driven by location, location, location. Of course, we can’t each afford a home in absolutely any neighborhood that we desire, and we can’t each live wherever we choose due to other life variables (workplace, family, schools, etc.). But let’s say we have an opportunity to consider buying an older house in an urban neighborhood or a nice piece of vacant land in a rural area that are equally accommodating to workplace, family, and schools or other variables.
First of all, the locations of older housing stock may exist in neighborhoods and urban areas providing culture and community that is more desirable in comparison to a rural location. Since available vacant land is more difficult to come by in urban and dense neighborhoods, or more expensive, the locations for new construction will perhaps be in more rural areas requiring a different lifestyle with a greater dependency on cars and commuting. The rural lifestyle may also have benefits of proximity to nature and be suitable for the remote lifestyle and accommodating other interests such as farm-to-table gardening and raising animals.
Of course, there is also a chance that vacant land could be available and viable within an urban neighborhood, though it may cost more than a rural property and be much smaller in footprint with additional zoning limitations for allowable buildable area. On the flipside, there is also a chance that an older house is available in a rural location, alleviating some of the initial land prep actions such as utility lines, wells, and septic system installation, etc.
When it comes to the house design, this is where my primary knowledge-set and informed intuition takes a front seat. Both the spatial and material conditions of housing are of significance to the quality of the design and the ability of the house to serve the specific lifestyle functions of myself and my partner. There are challenges and opportunities with older housing stock in this regard. For one, the spaces inside of older homes are going to be pre-defined to the extent that a perimeter footprint might be limited, and interior structural walls might be fixed. The existing plumbing locations will also be one of the limiting variables if renovation costs are on a budget.
Depending on the era and style of the older housing stock, which is often dependent on regional location, the layout of the spaces will vary. Nineteenth and early twentieth century single-family housing stock in the United States may be Victorian or multi-story brownstones which incorporate stairs as vertical circulation. The spaces of these types of dwellings will also most likely be organized with direct adjacencies between rooms without hallways or circulation spaces in between. In brownstones this type of layout is sometimes identified as railroad style floor plan (room by room organized from the front of the brownstone to the back without any hallways). In Victorian or Neo-Classical home styles this type of layout is referred to as emphalade, which includes the rooms continuing into adjacent rooms often with large openings at the center of each wall. These layouts can be around the perimeter of the house with a central organizing space in the middle that might be identified as a hall or gathering zone. Spanish-Colonial style housing from this era that might be present in the southwestern states has similar room to room layouts but often with a central outdoor courtyard in the middle.
With contemporary lifestyles, the need for privacy and acoustic separation for different home activities can present some challenges for suitability within these older floor plans. Some of the more successful examples are multi-story houses or brownstones that homeowners will zone by function on floor by floor. So, the master bedroom suite might be located on the top floor, the living space on the second floor, and the kitchen and dining space on the ground or first floor. Determining how to make use of older homes with multiple small rooms for contemporary family units and lifestyles can sometimes be challenging but may also provide unique opportunities. Small rooms can be used as home offices, yoga studios, craft rooms, guest rooms, children’s rooms, libraries, meditation rooms, and studies, etc. Some people may have a deeper appreciation for older housing stock at an emotional level, such as visceral memories of visiting their grandparents or feeling connected to history and past cultures. The character of older housing stock is often acknowledged as being special, architecturally, and sometimes can even bring tax benefits if the house is registered as an historic property.
As an architect, I have the ability to immediately see the potential when I walk into an older house and envision the renovations that could improve the layout and the spatial qualities, especially if there are certain lifestyle preferences in mind. I can see the possibility to take down partition walls and make some larger spaces for open living-dining-kitchen zones, or to expand a small bathroom to encompass a larger floor area for a dressing room and vanity. Many times, I immediately observe the daylighting quality of the interior spaces and make sense of whether additional daylighting can be achieved with skylights, bay windows, light shelves, or other apertures. There are also opportunities to add more storage and closet space, (which is quite often lacking in older houses in relation to the contemporary American household belongings), by creating full wall shelves or thickening the walls to have interior closets with pocket doors. The challenges I find most problematic are low ceiling heights throughout the house, differential settlement of the foundation, or extreme decay of primary structural members (columns, beams, walls, trusses). Exposing unique structural members such as beautiful wood roof trusses can bring another element of character to the home design and replacing a few trusses that are in disrepair is acceptable for a renovation project.
The material condition of old construction is another topic that also needs to be addressed. The embodied energy of older housing stock is extremely low compared to building from scratch. It takes almost 30-years of a building’s lifespan for the carbon footprint of operations and maintenance functions (heating, cooling, lighting, minor repairs and replacements) to catch up with the carbon footprint of the original materials and products at the time of build. The life-cycle of materials and building products includes the raw material sourcing, manufacturing, transport, and installation carbon footprint metrics. There are also end-of-life aspects, such as the ability for recycle and re-use, that may be included in the life-cycle analysis. So, compared to new construction, the embodied energy of an older home is extremely low and much more environmentally friendly. There is a great environmental benefit to renovating, restoring, and caring for older housing stock.
The challenge with the materials and construction of older housing stock is that the quality may be degraded to an extent that is not salvageable. In addition, the construction techniques for the exterior walls and roof may not be adequate for current energy codes and will likely require additional insulation and perhaps vapor barriers and new interior finishes. It really depends on a case-by-case basis what the existing condition and design is for the given climate location. New construction, on the other hand, could be accomplished with excellent material specifications, using only the healthiest compositions (low-VOCs, no formaldehyde, water damage proof and mold resistant, etc.). Older housing stock may have embedded health violations with the materials in the construction such as lead pipes for plumbing or asbestos in the wall insulation. Water damage to older houses means that mold remediation may be required prior to renovating, which is a more involved procedure depending on the extent of the damage.
Compared to older houses, a new house could be designed with the exact floor plan and space layouts desired for the current lifestyle needs. The materials and construction techniques could also be accomplished with the best selection of eco-friendly options and integrate passive design strategies for optimizing energy efficiency, rainwater collection, natural ventilation, adequate daylighting, and other beneficial elements. Perhaps everyone would want to design their own home from scratch if given the opportunity and ability to do so… but there is also such a beautiful thing to re-design existing homes and make them wonderful and suitable for contemporary lifestyle functions.
Some of my next steps will be establishing a potential budget for whole picture of property purchase and construction or renovation. Within this task, I’ll consider the different financing access under each scenario as well and what that might mean for long-term interest and comparing total costs at the end of the projected pay-back periods. Financing for much older housing stock can be difficult to obtain, especially for a serious fixer-upper. From what I’ve seen on the market, renovations are already made before an older home is marketed for sale with typical mortgage lending practices. Otherwise, the older poor condition housing stock has to be bought in cash in full up front. The challenge with a pre-renovated house is that it may not be exactly what is desired but you’re still paying for it and will possibly want to do your own alterations or renovations after move-in.
Financing of new construction can have its challenges as well. The purchase of land must be in cash up front, but the cost of construction can be through cash or construction loans. These loans or cash payments could also be phased or sequenced over time to accommodate the flow of capital for different stages of the construction process. Interest rates on construction loans are typically slightly higher than mortgage interest rates (within about 1% difference typically), but construction loans are more difficult to access with more stringent qualifying criteria due to the bigger risks involved with building. However, the total costs for developing the new home when loan payback is complete is likely to be cheaper than buying the existing home and renovating.
I look forward to getting deeper into this journey of becoming a homeowner and am excited to begin the search in earnest in 2023. I will establish a comparison criteria checklist that I can use for documenting the information for each prospective property that I am considering, and ultimately use this as a guide to inform the final decision. I am sure there will be ups and downs in the property acquisition and construction or renovation process, but I still await the journey with optimism and patience. I think deep inside I acknowledge that no matter what the outcome, whether we go with an older house that we remodel or if we build from scratch, we will finally have a place that we can truly call home.
If you have any questions about the architectural design for a renovation or new build for your primary housing structure, reach out to AIDA, LLC today for a consultation. You can always find more information and healthy home resources at Aletheia Ida Design and Architecture, LLC (AIDA, LLC) at www.aletheiaida.com.