$1,000 for a custom home plan? This is a ripoff that will cost you.

One of our architects recently emailed this to me:

“I lost a commission on a NEW BUILD to a guy who charged a grand!!! Now I made most of my fee back, fixing it, but you wouldn’t believe how often that is the case.”

The key here is that the owner in this story still paid “most” of the original architect’s proposed fee. For the same cost the owner had to endure a painful experience of starting with a defective plan, then figuring out how to fix it during construction.

Every architect has this story.  Very few owners understand it.

The lesson is that a great designer or architect will create a better design, your project will be a much more enjoyable experience, and the time that the architect spends working on your project creates efficiencies that save you money.  Basically, you can’t avoid the work so you might as well hire a professional who knows what he or she is doing!

Eight years ago, I founded New Avenue and at the time I was guilty of misunderstanding the design process.  I had no idea what an architect really did. I fell for the prefab myth that scale and efficiency would save you money. It turns out shipping costs and cranes eliminate any cost benefits of prefab building. Worse than the lack of savings is that you get stuck with the existing design. That is never as good as a truly custom design for the specific site where you are building.

The key is finding a good architect who follows a good process and stays involved start to finish.

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How to permit and permit costs of an accessory dwelling vs. an accessory structure in Albany, CA

The Albany Planning Department has a very strict interpretation of an
“accessory building” (that is not a dwelling with a kitchen) and what triggers requiring a permit. Based on a conversation in February 2017, if a storage building (accessory structure) that is less than 120 square feet in size has power or electricity, then Albany requires a permit.

Similarly, if the accessory structure is intended for any use other than storage, Albany requires a permit. A workshop accessory building would require a permit based on the proposed use. This interpretation is unique to Albany.

Re: parking
When we spoke with the technician, he indicated to me that the main house is required to have 2 off street parking spaces, and that an “accessory dwelling unit” would need 2 more off street parking spots. In light of your conversation, we dug into the municipal code and found the exception which is that if your house was built before 1958, the main house does not require any off street parking, but the ADU would still need 2 off street parking spots. When asking at the city, the technician didn’t explain there were exceptions.

Re: planning and permit costs:
Because the technician was not forthcoming with what fees would apply, we made some assumptions so that we will have a reasonable amount in the budget to account for potential fees. Our project falls somewhere between an Albany defined “accessory building” and an ADU. We exist in a grey zone which their fee structure does not account for. We think once we have a master plan for development of the back yard, we should sit down with the actual planner to review the project, and the likely phasing of the

At that time we should get a clearer idea of the planning fees.

Again, the building permit fee we estimated was based on a $200,000
construction budget all submitted as a single project. That’s a number we
pulled out of thin air at the counter just to get the technician to commit
to an amount for a building permit.

As we revisit the proposal, do you have drawings of the existing house and
site that might have been prepared for your recent remodel?

Legalizing an existing accessory dwelling in-law unit in San Francisco

We know of just one apartment out of an estimated 30,000-40,000 illegal in laws in San Francisco that was legalized! This is the story about that apartment’s legalization process.

One of our partner architects, David Locicero recently completed the legalization of an existing in law unit in San Francisco.  The process from start to finish lasted 21 months and cost just over $50,000. This was an existing and unpermitted in-law apartment that was updated to meet current codes.

Do you wonder:

  • Can I legalize an illegal in-law apartment or accessory dwelling in my home?
  • What permits do you need to legalize an unpermitted apartment in your home?
  • What do building permits cost?
  • How long does it take to get permits?
  • How much does it cost to build or legalize an unpermitted apartment?

It’s near impossible to get the answers to these questions because very few people have done this. We answers these questions here and this is based on experience, not guesswork!

Our network of architects and contractors collectively have more experience than any other company we know of and we only know of this one project that legalized an unpermitted in-law apartment.  Of course we know plenty of unpermitted apartments.

Here are the facts about the legalization process:

When did the clients accept the design proposal and hire the architect: June 2015
When were permits submitted: September 8, 2015 (3 months of design)
When were permits approved: April 2016 (8 months waiting for permits! you should plan on the same)
Construction started: April 2016
Construction finished:  November 2016 (8 months of construction).
However we didn’t get the Certificate of Occupancy until January 2017. Between the holidays, and some confusion among the inspectors, it took us quite a while to get our “CO”. (an additional 2 months of waiting).
# Hours of design time: Approximately 45 hours including responding to plan check comments and construction administration.
We had a very good contractor and very few problems uncovered during construction. The existing conditions were very favorable for minimal design costs.
Other subconsultants needed: Title 24 (Energy Conservation Compliance). I used NRGcompliance.com
Approximate design cost: $5000
Approximate construction cost: $50,000

Total timeline: 21 Months from start to finish.

We can share much more details, copies of the plans, and review your project ideas.  It’s free to call New Avenue if you have any questions.  We offer a $250 design session in your home if you want an assessment of your property.

Here are before and after photos of the living room and bathroom:

sunset inlaw_before_1 sunset inlaw_after_1

Bathroom Before

sunset inlaw_after_3


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What Architects Say When Construction Bids Come In

We received the following email from an architect as bids were coming in for one of his projects:

Architect Reaction to Construction Bids

This happens all too often.

There are two ways to counter this surprise:

  1. Study the cost of a nearby project that is of a similar size and scope.
  2. Invite a contractor to provide an estimate and “value engineering” beginning at schematic design. This is before you do the engineering or apply for permits.

To get the costs of a completed project you can’t ask an architect or contractor. They design and build and they do so separately. So they have no way of knowing what the other one is charging.

You can ask us at New Avenue – We are the system that manages payments for the entire project.  It’s free to do so:)

You can sign up and use the New Avenue system for free here: Get Started

Custom Wood Doors on Panoramic Way in Berkeley, CA (A historic district)

I’m kind of curious about the kind of doors you’ll find on homes that cost $1,000,000 or more.  Do you get a certain quality that you just don’t see in “average” homes?  Or do you get the same?

We stumbled across a few homes while home shopping in this neighborhood and wow!  What a history of nice custom doors up here. A few of these homes were by famous architects like Julia Morgan, Steilberg, Frank Lloyd Wright.  Others were by lesser known Japanese woodworkers too.

Check out these doors!

This is the side door for a house that cost $750,000. 

754 Panoramic 2

This is the most amazing door of all!

754 Panoramic 1

This was a 1,600,000 house but just a plain old door.  It’s nice but not on par with the home that cost half as much just up the street.

1.63 Panoramic 1

Below is a beautiful door and custom window that matches. But those exterior electrical conduits are a disaster. I get it, you someone had to get the job done cheap.  But let’s do better than that.  This is the side door in a $1,360,000 home.

1.43 Panoramic 4

This is the main door to the $1,630,000 home.

1.43 Panoramic 1

And these are the deck doors from that $1,630,000 home.  Look at that ceiling too!

1.43 Panoramic 2

It seems the cheapest door was on the most expensive home.  Is there a moral to the story?  I guess you don’t have to put in an amazing custom wood door.  But nice doors are so worth it and if you’re spending a million bucks, why not do it right?



Cost of a basement remodel and a new guest house with roofdeck

The cost of a major basement remodel and guest house is listed in the attached budget below.

This project includes an 899 square foot two story guest house and the remodel of over 1,000 square feet of unfinished basement space into two new apartments.

You can open the link below to see all of the detailed line items in this project. We list the cost of each line item in the project budget.

Oakland Budget

This is the ground floor of the new guest house / accessory dwelling:

Screen Shot 2017-02-07 at 2.52.14 PM

This is the upper floor of the accessory dwelling including the bridge to the main home and the roof deck:

Accessory Dwelling Second Floor

This is the floor plan of the basement remodel:

Basement Remodel


Cost of a 660 square foot guest house in Menlo Park

This guest house in Menlo Park, CA is breaking ground next week. The costs are:

Architecture: $26,146

Survey: $2,100

Geotechnical Engineering (Soils Report): $3,650

Structural Engineering: $4,400

Energy Efficiency Report: $800

Arborist Report: $1,250


Planning Permits: $2,102

Building Permits: $3,012

Fire Department Review: $241

Construction $261,251 ($395 per square foot, including site work utilities and drainage. The ground floor is 376 square feet and the loft is an additional 284 square feet)

376 Ground Floor + 284 Loft Elevation Side Elevation Menlo Side Elevation 2 Menlo Rear Elevation Menlo Interior Section Menlo Interior Section Menlo with shower

The full budget with every line item is here: 660 Square Foot Backyard Cottage Budget

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Cost of a 310 square foot guest house in Berkeley, CA

The cost of a recently completed super small guest house in Berkeley, CA was $130,695.  The full costs are detailed in the line item budget here.

A summary of the costs are:

$1,200: Survey

$3,312: Planning (Zoning) permits

$3,650: Structural Engineering

$550: Energy efficiency report

$2,830: Building permit

$563: Mechanical, electrical and plumbing permit

$20,854: Hourly architecture fees

$97,736: Construction Costs ($315 per square foot)

Here is a summary of the plans:

Berkeley Front 235 Square Feet Berkeley Side - 235 Square Foot Guest House Berkeley Back - 235 Square Foot Guest House Berkeley Floor Plan - 235 Square Foot Floor +75 Loft Berkeley Floor Plan - 75 square foot loft

The full line item budget is here: budget 310 square foot detached cottage

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3 Essential & Free Tools Every Addition, Remodel or Custom Home Needs: A Design Agreement, Construction Agreement and Budget

Every project needs a Design Agreement, Construction Agreement and Budget.

Owners, architects and contractors use New Avenue’s innovative system to manage projects that cost between $50,000 to over $2,000,000.  Current projects are located from California to New York.  Our software system collects insights throughout the design, permitting and construction process. In one year we see more transactions, proposals, and changes than most most architects and contractors see in a lifetime.   We incorporate those lessons in the industry’s best agreements and budgets and we provide these to you for free.

We are genuinely afraid of any project that does not have a clear agreement and budget in place.  Without this expectations are almost guaranteed to be wrong.  We recommend that every project use these three agreements to set the right expectations and establish a healthy working relationship:

New Avenue Construction Agreement

New Avenue Design Agreement

New Avenue Example Budget Format For $100,000 – $5,000,000

Every project should use these forms.  Project are easier to manage, more efficient, and more affordable when the team has a clear understanding of the work to do.  The owner, architect and contractor will be happier during the design/build and upon completion.

Following the guidelines set forth in these agreements requires discipline and the New Avenue project management system makes that part easy.

You can sign up and use the New Avenue system for free here: Get Started

For Architects: How to Fire a Client

We have worked with several hundred homeowners in the past few years and roughly one out of one hundred have been just downright mean. When I say mean, that includes behavior honest people can’t imagine.  I asked a lawyer friend of mine if he ever has to fire a client.  He said he does it all the time.  He stressed that it is just not worth the personal stress that a bad client causes you and their behavior can really hurt the rest of you your business too.

Here is how he fires a client:

“I have a very busy practice with many clients who I truly care for.  You, unfortunately are not one of them.”

That’s it.  You’re done.

I’ve never said this though. I don’t have the courage. We’ve also been good enough to consistently note that we charge for the services provided and that weeds out quite a few people right at the start.

Every professional service person such as an architect, contractor, engineer, electricians, plumbers, carpenters, painters, landscapers learn early in their careers that avoiding a problem client.  In order to survive they do so very early in their careers.  According to one electrician he “has very good antennae for the problem clients”

Here are the tactics that more polite people use to avoid challenging people before they even get started:

The polite ways that we have seen architects and contractors effectively fire people include:

  1. ” I am booked for the next year and can’t fit this in my schedule. I’d be happy to work with you next year”
  2. “Who referred you to me? I’m busy working for the children and relatives of previous clients.  Sorry:
  3. Provide a proposal that is two or three times more than they are charging a comparable, but nice client.  Note to owners: When someone bids way too much this is their “walk away price”.
  4. Don’t return phone calls or emails.  This works and may be the most common tactic but it doesn’t reflect very well on the professional.

Here are a few “fireable” actions:

  1. Throwing a proposal back at the designer saying it’s too expensive “fix it”.
  2. Refusing to pay for the services offered.
  3. Negotiating to reduce fees below what the professional needs to earn to run a successful practice.
  4. Fighting other projects in the neighborhood.
  5. A bad relationship with previous professionals, contractors, tradespeople.
  6. Claiming they can’t afford the professional services while magically finding money when it’s time to buy nice gadgets and finishes.

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