Site Improvements

How Much Are Demo Costs?

When estimating the costs to improve a site – grading, utilities, streets – it is important not to forget about demolition costs.  In some cases, a site may have nothing more than grasses and vegetation, which needs to be removed before the grading can begin – often referred to as “clear and grub”.  But in other cases, a site might have structures both above and below ground that need to be removed prior to the grading work being started.

Some of the obvious demo costs can be the removal of an old house or building, fencing, walls, barns, sheds, and other easily visible items.  What tends to get overlooked is what lays hidden underground.  The site might have abandoned septic tanks, water wells, underground storage tanks, and pipelines that all need to be removed.  And you also might have asphalt and concrete on the surface, which needs to be torn up and transported offsite.

You may not have a large demo scope, but it is good to make sure that your contractor is aware of possibly having to remove some material prior to constructing the new improvements.  When you provide plans to contractors requesting bids, the removal of old materials may not be obvious or indicated on the plans.  As example, a contractor providing a bid to install new curb and gutter may need to know what old concrete needs to get removed first.  Or, a water line contractor may need to remove and replace an old line before installing the new line.  The contractor’s effort is increased a bit as opposed to just installing new improvements.

When trying to estimate the cost of site improvements, I have found it useful to get actual bids from demo contractors.  The bids will provide a higher degree of accuracy in your cost estimate, and often the demo contractor will see salvageable material that might lower the overall bid.

As always, feel free to share your comments and questions with us below.

John Kaye has over 30 years experience within the land development and homebuilding industries, having held senior management positions with The Irvine Company, Koll Real Estate Group, and Brookfield Homes. As a developer, John has overseen the land acquisition, entitlements, and development of master planned communities, residential tracts, urban infill sites, and land assemblages. His experience and skill sets include land acquisition, land brokerage, project management, market analysis, finance, and strategic planning.

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