How Developers Can Curb Rising Construction Costs

Construction costs increased more than 5% last year, and they will likely climb again this year with pressure from tariffs and the ongoing labor shortage. Developers are looking for ways to curb costs in other ways to offset the rising prices. As construction costs continue to increase, developers can benefits from better pre-construction planning and scheduling.

“In the rising cost environment, today’s developers can deeply benefit from utilizing pre-construction services, which involve planning and scheduling, identifying potential problems, scope of project, estimating costs, and analyzing project needs,” Richard Lara, president and CEO of RAAM Construction, tells GlobeSt.com. “This is a service our firm conducts regularly, especially in the affordable housing sector, and it can be a game changer for developers, who understand that it’s essential to keep costs down without sacrificing quality.”

The pre-construction stage is the ideal time to make decisions that can have a significant impact on costs without sacrificing quality. Specifically, this means consulting a full team as early as possible. “At this stage, we can value engineer the entire project before any permitting or approval processes begin. This is essential to avoiding ancillary costs that can come from design changes down the road,” says Lara. “By bringing in a contractor before presenting the project for approvals, developers can better understand what will and won’t work from the start, ultimately saving a tremendous amount of time and money.”