When our sales engineers at Zahner start looking at a potential project, one of the first questions we’ll often get is, “What’s the price per square foot? How much is this going to cost?”
As anyone working in architecture can attest, for better or worse, we live in a world dominated by price per square foot. While this can be a fantastic way to measure construction budget, it is important to understand how the numbers can play tricks on us. There’s a couple of ways that these types of measurements can create a cost illusion.
A PSYCHOLOGICAL Case Study from another industry: Gas Efficiency
Before we jump into cost per square foot, let’s look at miles per gallon. In 2008, Duke University published a study which illustrated how misleading miles per gallon (MPG) can be. A number of tests were given to subjects. Each subject was asked to find the best value when buying a more fuel-efficient car:
Which of the following improvements will save the most fuel?
— Improving from 10 to 11 MPG — Improving from 16.5 to 20 MPG — Improving from 33 to 50 MPG
Most people would assume that going from 33 to 50 miles per gallon is a greater rate of savings than 10 to 11 miles per gallon. Surprisingly, each of these options saves about the same amount of gas over 10,000 miles: About 100 gallons.
Because we have trouble understanding how the value difference goes down as cars become more efficient, the authors of this study have proposed using “Gallons per mile” or “gallons per 10,000 miles” as a substitute. The data scientists were successful in driving awareness, and now the EPA-DOT labels reflect this measurement on new vehicles.
HOW COST PER SQUARE FOOT CAN MISLEAD IN ARCHITECTURE
While there isn’t an exact parallel for this phenomenon in architecture, there are similar psychological cost illusions that we see with cost per square foot, especially when attempting to determine material value.
A lot of contractors and designers will look at the cost per square foot for raw materials. It might not seem obvious, but the raw material cost per square foot is not the best metric when determining value. A more accurate way to gauge your options is often to compare the installed material cost.
The problem with using raw cost per square foot (like the chart above), is that it doesn’t factor in a few things. For one, the cost of applying a secondary finish to these metals may vary. The raw price is always going to show you a factory mill finish, which isn’t an architectural finish. If you’re designing an aluminum system, anodization and paint will drive the cost up, whereas a material like zinc or copper may be installed in is raw state.
Secondly — and this is big — fabricating and installing these materials has a leveling effect on the numbers above.
Let’s say that you’re building a facade and trying to decide between cladding it in zinc sheet metal, or cladding it in carbon steel sheet. When you price these two materials in sheet form, you might quickly discover that the steel is roughly $1/SF for an appropriate thickness, and a similar zinc material might be $5/SF.
If you use these numbers, you might think that a zinc facade is going to cost you five times more than a steel facade. But this isn’t true. Its important to understand how fabrication and installation are the biggest factors in determining cost per square foot.
The installation and fabrication costs are usually going to be about the same for each materials — so let’s say that the cost of fab and install in our case is going to be a combined $40/SF. Now, when we add in our cost in for steel and zinc, and we get $41/SF vs $45/SF respective. The reality is that you have only a 10 percent increase in construction cost for the use of zinc. On top of that, if properly installed, zinc will last two or three or four times as long as steel or aluminum with minimal maintenance.
The chart below shows how these numbers start to coalesce when comparing the same metals that we looked at above.
When you start to break down the cost of installing your facade, you’ll find that manufacturing the panels, and installing the panels, will bring you much closer.
Next let’s look at the final component, where the illusion of cost per square foot completely breaks down — when you start getting bids from different suppliers for manufactured and installed panels.
In the chart below, we’ve added two more lines showing different facade competitors and their furnished price. Now we start to see a very big disparity between each of the supplied costs.
Fabrication and installation is where different quotes will create the most variety, while cost per square foot for the raw metal sheet will vary only a little from the different metal mills.
So in our example, both zinc and steel manufacturing and installation can cost roughly the same for each of the materials, but may end up being up to $15/sf price difference among furnished materials.
In all of this, don’t lose sight of how zinc, copper, and stainless have significantly longer life-cycles than the less expensive materials. We write about this in the the Semantics of Metal. When you factor in longevity, you might be able to see how some of the more expensive materials can actually end up saving money for the client.
So what is the best way to ensure that you’re understanding the best numbers? We find that its as simple as asking, “What’s the installed cost per square foot?” This is the number you’ll want to use to compare various material systems.