The Cost of Building New in St. Louis: Is It Really Worth It?


Why build from scratch when you can remodel your beloved family home? Sure, there’s a certain appeal to the idea of creating a new home from the bottom up. It’s fresh; it’s modern, it’s 100 percent yours. But those perks come with a hefty price tag. One has to wonder if it’s really worth it.

Believe it or not, a significant portion of homebuilding costs come from regulatory fees. But what are regulatory fees, and how can they impact your project? Good question.

Regarding Regulations

The process of home construction is riddled with regulations—in other words, checkpoints imposed by various levels of government to ensure that homeowners are abiding by property development rules. Compliance with building regulations is mandatory if you intend to build. There’s simply no way around it. And while it can be a major hassle, it’s also in your best interests to get your ducks in a row.

Building in accordance with codes and up-to-date safety standards not only protects your personal wellbeing, but it will also help to legitimize your use of the property. Essentially, no one can contest the fact that you’re following the rules. You’re covering your legal bases, so you’re within your rights to build and enjoy.

While following property development regulations and important and necessary, they’re also quite expensive. It turns out that jumping through these legal hoops actually ends up raising the home’s final price tag by quite a lot. 

In fact, the National Association of Home Builders (NAHB) found that approximately 25 percent of the final price of a newly built single-family home was made up of government-imposed regulations. Of that 25 percent, three-fifths of the cost came from regulations related to developing a finished lot. That means that most of that number doesn’t even come from the construction of the house itself.

Breaking Down the Budget

So just what are you paying for when it comes to regulatory costs

1. Lot Approval

Just because a plot of land is for sale doesn’t always mean you’re allowed to build on it. Before you close the deal, you’ll want to make sure that the parcel of land is approved for building. You can find this information through property records, available through your local city hall or another county department.

2. Zoning

You can build on the property? Great! But hold on… it depends on what you intend to build. Not all plots are zoned for all kinds of structures. The pertinent zoning information is also publicly available through city hall or your local zoning office.

3. Ordinances and Covenants

Ordinances and covenants govern the specs of a structure, such as height and size. These are usually managed at a local level. 

4. Building Codes

Building codes deal with the details and inner workings of your structure. They have to do with fire prevention, plumbing, and electricity. While other regulations are governed at a state or municipal level, most building codes meet an international standard.

5. Permits and Plans

These are your drawings, measurements, floorplans, and material choices. They all have to be submitted to your local code office for approval.

After all that, you can probably see why building a home is such a lengthy and complicated process. It’s critical that you, the homeowner, along with your design and build team, ensure that all your papers are orderly before you even think about breaking ground.

Build or Rebuild?

The NAHB also found that between 2011 and 2016, the average amount of regulatory costs on a home built for sale exploded by almost 30 percent. The data estimated the average price at nearly $85,000 in 2016, up from $65,000 in 2011. Altogether, these regulation fees are not only costly, but they also can delay the construction process. If not carefully planned and rigorously executed, new builds can be plagued by hiccups and periods of waiting, accumulating higher labor expenses, and prolonging your move-in date.

If you have your heart set on building a brand new home from scratch, it’s essential to understand the associated costs. But for others who are uncertain about whether to build new or improve what’s already there, this information may be enough to sway the decision.

Remodeling your home is a faster, simpler, and more streamlined process—not to mention, it’s far less expensive. You can still get what you want without upheaving your family and changing your lifestyle. So if it turns out that building new isn’t for you, remodeling might be the perfect way for you to get what you want without busting the bank. 

Of course, whichever way you decide, J.T. McDermott Remodeling can help. We’ll take care of all the permitting and paperwork so you can sit back and look forward to enjoying your new home. Connect with us today, and let’s see what’s possible.


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