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Rochester is known by different names like the “Young Lion of the West,” the “Flour City,” and the “Flower City.” It has a history of photography, xerography, and optics, along with a reputation for manufacturing, research, and imaging sciences. The local economy was noted to have recovered most of the ground lost upon the onset of the COVID-19 pandemic in 2020. However, while there are opportunities for growth in the distribution, healthcare, manufacturing, and multi-family sectors, Rochester has yet to reach full job recovery.
The Cost of Building a Home in Rochester
The construction industry in Rochester is also seeing more activity, which some experts have attributed to the city’s strong industrial history. Still, some issues persist, including the volatility in supply chains. There is a strong demand for construction services, but the supply side brings a level of uncertainty.
Experts forecasted an optimistic yet cautious year of recovery for 2022. Residential construction spending is expected to increase by 6.5%, which was marked a slowdown compared to 2021’s predictions. Still, it is considered a fairly strong growth rate.
Unfortunately, the Rochester area continues to face a labor shortage of workers and supplies for the construction and trade industries. Some institutions have begun trying to amass interest in the younger generation for construction work to make up for the lack of skilled workers. According to the Associated Builders and Contractors (ABC), the industry needs around 1 million more workers to keep up with demand for the next two years. Experts have noted the importance of the younger generation’s interest in construction to help alleviate the labor shortage.
Figure 1. Typical cost breakdown of a single-family home constructed using the conventional method, according to Home Builder Digest.
The national average cost of new home construction is about $207 per square foot, which is much lower compared to Rochester’s average cost of $365 per square foot. Most firms in the Rochester area will offer pricing within the $265 to $465 per square foot range for basic construction costs. The actual cost of the construction work will vary depending on the project’s details, as well as the hard and soft costs.
Hard costs cover the aspects of home building that are physically part of the house itself, including framing, foundation, plumbing, flooring, and roofing. Soft costs, meanwhile, cover things like land costs, permitting fees, and architectural and design costs. Project owners should keep in mind that these costs are independent of each other.
Hard Costs
The cost of basic and simple home construction in Rochester can start in the $265 to $314 per square foot range, although finding firms that offer this pricing may be difficult to find. Projects that are more complicated or detailed—typically mid-value type homes—can cost $315 to $424 per square foot. More customized or detailed projects cost $425 to $465 per square foot and above and are considered high-end homes in the Rochester area. It should be noted that these figures are estimates and firms may have higher or lower rates based on details like square footage and additional features.
On top of construction costs, project owners need to take into account the costs incurred from foundation, roofing, heating, ventilation, and air conditioning (HVAC), and electrical installation.
The roofing costs in Rochester can range anywhere from $160 to $1,800 per 100 square feet, depending on the roofing type. The following table provides price ranges that project owners can expect to see:
The cost for Major systems is a combination of HVAC, electrical, and plumbing. The following are the average costs for major systems: an HVAC system is about $2,600 but may reach up to $6,200, while plumbing installation is $412, and electrical installation is $443.
Soft Costs
Soft costs are expenses that cover aspects of construction that are not physically part of the house itself. These include land costs, permitting fees, and architectural and design costs.
Figure 2. Soft cost percentage and average price range of additional fees, determined from the overall cost of custom home building in Rochester.
Cost of the Land
Currently, Rochester is experiencing negative population growth with a -1% annual rate. With fewer people living in the city, it can be expected that the cost of land will not rise as quickly or as drastically as land in areas with inbound or positive population growth.
Plots of land available for sale in Rochester on Zillow have an average cost of $102,133.33. The cheapest lot is 5,249 square feet and is being sold for $9,900. It is located along Grand Avenue. The most expensive lot on the site costs $299,900. It is 12,197 square feet and is located along Eldridge Avenue.
Permits and Other Fees
Information regarding the permitting process can be found on the local government website. The website provides information on which work requires a permit and which work does not. There is also a section on the website that provides permit application packets to help applicants with the process.
The following table contains information from the city’s building permit schedules:
If the project cost is $60,000 and above, the city uses the following formulas to compute for the permit fees:
The city also has a scheduling fee for plumbing permits and electrical permits. Additionally, there is a base fee of $80 for plumbing permits.
Architecture and Design Fees
Architects commonly base the cost of their services on the total construction value. For Rochester, the usual range would be 14.55 to 15.28% of construction costs, depending on the services rendered, project complexity, and architect experience.
Project owners may also come across architectural firms that charge by the hour or by square footage. Pricing will be based on the request, project location, and the architect’s position, experience, training, and reputation. Some of the common services offered by firms are layered drawings, project management, concept development, consultation, and site visits.
What Leading Custom Home Builders and Architects that Serve the Rochester Area Say
According to Peter Morse, a Rochester-based architect with his own firm, construction prices will continue to increase so long as housing demand remains strong. It is possible for real estate to cool off should interest rates increase too much.
The Future of Rochester’s Residential Construction Industry
Much like in other cities, the construction industry in Rochester is suffering from a labor shortage. On top of an aging workforce and an uninterested younger generation, firm owners have spotted other possible factors to the shrinking labor market. Some of these are the expanded unemployment benefits, loss of certain work benefits during the pandemic, and retired workers who have briefly stopped doing part-time jobs. It is also possible that people are no longer willing or able to accept the low wages being offered for many jobs.
The Rochester workforce is at a historic low. Experts have shared that the labor shortage is not just the effect of the pandemic. The New York State Department of Labor shared that the labor shortage is a long-term trend that existed long before the onset of the pandemic.
The labor shortage was acknowledged as the most critical challenge to be addressed. Contractors have been experiencing difficulty in keeping up with the high demand due to a lack of workers to take on new projects. Qualified tradespeople are in short supply and there is a lack of younger people entering the construction industry to meet demand. Firms are being forced to cut down the number of projects to take on to ensure everything is done on time, which also drives up the cost of construction.
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