7 Site Development Costs in Residential Construction

D.P. Taylor
Written by D.P. Taylor
Updated September 23, 2021
Housing development under construction
jhorrocks / E+ via Getty Images

From permits to engineering, knowing what site development costs you will encounter is crucial for project budgeting

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A patch of land is like a canvas to a builder. It’s a blank slate ready for a beautiful work of architectural art. But before the builder can paint, they must prepare the canvas.

Site development is an unglamorous part of home construction and remodeling, but it’s absolutely vital to ensure the successful, on-budget completion of any type of structure. It can get expensive, but not spending the money to get the work done right is a recipe for disaster.

So what are site development costs and why are they important? This guide will help you understand how each of them plays a role in a residential construction project.

What Are Site Development Costs?

Site development costs are any expenses related to construction in a specific location, from permitting and fees to utilities and landscaping.

These costs range widely depending on several factors, including:

  • The cost of a comprehensive survey of the land

  • How much land you have to clear

  • The roads, curbs, and drainage required

  • What permits you need

  • How opposed to development neighbors are

  • How much of the land has to be offset for greenways and watershed ponds

  • Any inspections that need to be done

  • What utilities need to be installed (connect to municipal water/sewer or develop well/septic)

Based on surveys from real Angi professionals, typical land development costs to build a house range from $1.30 to $2 per square foot overall (although specific work within the overall project, like basement excavation, may cost much more than that).

What Is the Difference Between Site Development, Site Preparation, and Land Development?

Pros often use these terms interchangeably when talking about residential construction. However, in some cases, construction professionals may use “land development” to refer specifically to work done to the land, such as brush clearing and excavation. Site preparation and development also includes paperwork, like permitting and inspections.

How to Calculate Site Development Costs

There is no one-size-fits-all formula for calculating site development costs, but you can add up typical site development costs to get a good idea of what the ballpark for your overall cost is.

Typically, the way you would estimate site development costs is fairly straightforward:

Impact fees + civil engineering costs + permitting costs + geotechnical or soil testing costs + demolition costs + excavation for a foundation or basement costs + miscellaneous costs = site development costs

7 Factors for Site Development Costs

What should you expect in terms of site development costs when you get ready to build? 

Generally, you should expect to encounter the following seven costs.

1. Impact Fees

An impact fee is what a local government charges a developer to pay for the costs of providing public services in order to mitigate economic impacts on surrounding jurisdictions. It varies widely depending on the jurisdiction, ranging from a few thousand dollars to the tens of thousands.

The government uses impact fees to fund public services and infrastructure.

A few common things the government may charge for include:

  • Installation of a sewer line

  • Expansion of a road

  • Increased usage of public services, such as schools and fire departments

2. Permits

Building permits are necessary for any new construction or remodeling. State and local authorities require them to ensure you are in compliance with building codes and that the home will be safe to live in. Check with your local and state government to determine what permits they require for your project.

3. Civil Engineering

A civil engineer is responsible for several specific aspects of a project, including:

  • Site planning and oversight

  • Grading

  • Drainage

  • Sewage

  • Utilities

A civil engineer will conduct a survey and draw up plans to ensure a home has proper drainage. They will also check that the construction manager has graded the property correctly and mapped out the utilities.

4. Geotechnical or Soil Testing

Just because it feels like solid ground doesn't mean it's suited to be the foundation of a house.

Geotechnical engineers will examine the soil earthworks to ensure the following:

  • The house can sit in that spot safely

  • Underground power transmission lines can be installed

  • The construction team can run gas pipelines for the house

  • Sewer lines can be put in place

If the construction team doesn’t properly test the soil, then the project may run into a major problem midway through that halts it entirely or dramatically increases the budget. Or, long after the team finishes the project, the home could collapse or lean.

5. Demolition and Land Clearing Costs

You can't build on a site until it's clear, and that may involve either demolishing an old structure sitting on the property or removing brush and debris from an unused site. For this, you will have to bring in a demolition or landscaping team—or perhaps both—depending on the work you need to complete.

6. Excavation for a Foundation or Basement

Unless it's a trailer home, you'll need to dig to lay a foundation or build out a basement for the home. Excavation requires heavy-duty equipment and is one of the more expensive parts of site preparation. These costs are relatively limited if you're just digging a foundation—digging a basement will cost you extra.

7. Miscellaneous Costs

Site developers deal with a host of miscellaneous costs outside of these six general categories. For example, you might need to pave a driveway. Or, you might want to dig a well, which will require drilling and extra equipment like pressure tanks and piping. You might also need extra grading for additional structures outside of the main house.

Why Does Knowing This Cost Matter?

Proper estimating before starting a construction project is absolutely critical. Every developer has a budget, and exceeding it jeopardizes the entire project, forcing them to cut corners or abandon it entirely.

By doing your homework and getting accurate, thorough estimates before beginning, you can reduce the risk of cost overruns and ensure you successfully complete the project. 

Looking for help in estimating site development costs for your project or getting more qualified leads? Join Angi Ads to access a wealth of information for construction professionals and to get more leads too.

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