INTRODUCTION

Development projects often begin with the developer or landowner approaching the land development team with a piece of property, and possibly a development program or intended use. The following economic or cost questions are likely to arise almost immediately and demand more precise answers as the project advances:

• Is the expense and effort involved worth the return, that is, is the site/project profitable?

• Can I complete the development in a reasonable amount of time?

• How much risk and potentially hidden cost does the development have?

• Is the project a good short-term investment? Long-term?

• Will people buy/rent/lease the product in a predictable period of time?

• Is adequate financing available to cover design and construction?

Construction cost estimates directly respond to some of these questions and facilitate finding the right answers to the others. Land development engineers are commonly requested to prepare cost estimates as part of the land development design process. The estimates intended use largely determines the level of detail and the information required. In turn, the level of detail determines the time and, hence, the cost of preparing the estimate.

This chapter defines the possible purposes of estimates and identifies estimate types and their limitations. It is always important to state the assumptions that were made in the process of preparing the estimate. When preparing estimates with more detail, the importance of including all elements cannot be overstated. Therefore, we have provided a checklist of elements that should be included in...