Land Development Project Costs

Environmental Due Diligence Cost Breakdown

Environmental due diligence is a cost most land developers try to encounter as late in development as possible. This process discovers the environmental red flags on a project and all the environmental permitting requirements associated with the site. Environment consultants perform this process over weeks or months, costing tens of thousands of dollars. Additional studies and reviews by an environmental consultant may be required for some sites, potentially increasing the overall cost. The actual cost for environmental consulting depends upon the consulting firm hired, the land's size, and the project's complexity.

Wetlands Delineation Costs

Wetlands delineations and other wetland studies are performed to determine the presence, boundaries, and locations of wetlands on project sites. This information aids in the site selection process and the overall site plan. These studies can cost tens of thousands of dollars and result in permitting requirements.

Soil Testing

Soil testing tests the type and extent of soil contamination on a site, helps limit dangerous runoff, and determines if the site can handle the project load. Testing soil compaction is part of an overall geotechnical survey for a site, typically done earlier in the development process by an environmental consultant or geotechnical surveyor. This process can cost thousands of dollars.

Critical Issues Analysis

Also known as Feasibility Studies or Environmental Desktop Reports, these reports are the overall assessment to determine the environmental risks for a site and the likelihood of project success when considering these factors. These studies take 60 to 90 days to complete and cost upwards of $5,000. Larger sites can see cost estimates for this study nearing $100,000.

Civil Engineering Costs

Civil engineering design, development, and inspection all play a role in land development. These costs vary depending on the site’s needs, the engineer’s time required, and the overall extent of engineering involvement. Engineering costs can range from thousands to tens of thousands of dollars.

Legal Fees

Environmental Permit Fees

A building permit or environmental permit may all necessary required for a site. These requirements can range in price at the local, state, or federal level. Zoning, building, and environmental regulations change regionally, so it is best for land developers to stay up to date with all permits required for their project site.

New Construction Impact Fees

Local governments require impact fees to aid in providing or expanding existing capital facilities for a new development. This cost is typically a cash payment before project completion. These fees allow services to extend to a new development without the taxpayer fronting the cost. As these costs are set at the local level, they will range with each area. However, many areas may not require this cost as many believe new developments should not pay for potential services and facilities the municipality may need.

Construction Costs

Site work to develop the property is a known but potentially underestimated cost. The total cost construction project varies depending on the development and its requirements. Site construction- such as land clearing- and the build-out of the facilities and structures for the property (ex., a wind turbine or real estate structure) are included in these costs. These site development costs are subject to the extent, type, and complexity of earthwork and build-out required for the project. Construction managers help oversee construction and can play a role in managing the development budget.

Materials Costs

Materials costs significantly impact a project, covering items such as steel or cement. Land developers typically expect and plan well for these expenses. Project and construction managers are crucial in minimizing these costs and potential waste.

Site Improvement Costs

These costs are upgrades or maintenance done on a site over time. Site improvement costs, such as updating landscaping for a real estate development project or improving sewer lines or a septic system, can impact your budget over time. These hard costs must be planned for as they can be high- depending on the work required. A site exposed to flooding over time, resting on a drastic slope, or requiring extensive landscaping could see its bill increased by thousands.

Inspections

Inspections are one of the many soft costs required for project development. These costs can be forgotten about until the time for inspection arrives. Inspection costs play a critical role in the development process and can be well planned for.

Ways to Cut Land Development Costs

Ensuring your development team all aim to properly plan for and manage costs ensures a decrease in last-minute scrambles to cover required costs. Early, proper site selection that considers environmental factors can limit permitting, materials, and mitigation costs. By using automated due diligence software, site selection can occur in minutes and earlier in the development process. This will allow for fewer hiccups in the development process and fewer sites with environmental dollar signs attached to be selected.