Baton Rouge is recognized for being the location of Louisiana’s flagship university and the melting pot of the Cajun and Creole cultures. The city is located at the mouth of the Mississippi River and plays an important role in America’s logistics and energy network. Following the onset of the COVID-19 pandemic, Baton Rouge’s economy has been affected by storms and tight supply chains. Fortunately, markets expect local performance to improve as 2022 passes.
Businesses have begun to adapt to the shift in market trends, including consumer behavior and an uptick in infrastructure projects like roads, bridges, and flood protection. The Baton Rouge Economic Outlook Summit 2022 discussed the changes taking place in different sectors of the local economy. Adam Knapp, president and CEO of the Baton Rouge Area Chamber, mentioned that firms are looking into more creative ways to reach more talent to hire. One effort is an app that taps into the college and university students by offering internships, which is expected to help alleviate the problems arising from the outward migration of 25 to 44-year-old professionals. Still, Baton Rouge is doing better compared to its peer cities.
The Cost of Building a Home in Baton Rouge
According to Knapp, the top obstacle for employers is workforce-related. About 18.5% of employers in a BRAC Survey put workforce issues as its top obstacle, followed by traffic (12.18%) and material costs (11.54%).
Associated General Contractors of America officials noted that there is a growing number of job openings, which is an indication of increasing labor shortages. About 83% of contractors reported difficulties in finding skilled workers to hire. Despite construction employment doing better in most metro areas, contractors still prefer to hire workers.
As a result of the labor shortage, the construction industry is experiencing an overstretched workforce, project delays, and an increase in costs.
Compared to the national average of new home construction of about $207 per square foot, a real estate group said it is around $150 per square foot for Baton Rouge. Cost per square foot will differ from project to project, typically based on the type and quality. Prospective project owners can expect to see firms charging $75 to $220 per square foot for the home building cost. Overall construction cost, however, will also be affected by hard and soft costs.
Hard costs cover the aspects of construction that are physically part of the house itself. It typically includes things like framing, foundation, plumbing, flooring, and roofing. Meanwhile, soft costs are things like architectural and design fees, permitting fees, and land costs. Project owners should keep in mind that hard and soft costs will fluctuate independently of each other without prior notice.
Typically, new home construction projects in Baton Rouge will cost anywhere between $147,338 and $436,401. Some new home construction projects may cost more, depending on the square footage and additional features. Some firms may offer to work at $75 per square foot for an extremely basic and simple home, however, it is uncommon. It is more common for project owners to come across a $145 to $219 per square foot price range, usually for a mid-value type home. Projects priced at $220 per square foot and above are mostly for high-end luxury homes in the Baton Rouge area.
In addition to basic construction costs, project owners also have to factor in other hard costs like foundation, roofing, HVAC installation, and electrical installation.
Roofing costs in Baton Rouge can range anywhere from $153 to $1,729 per 100 square feet, depending on the roofing type. The following table provides price ranges that project owners can expect to see:
The cost of site work is composed of several aspects. One of the major parts of site work is the foundation, which can cost about $5.55 to $6.18 per square foot. Another is concrete footing that can sometimes result in $2,892 to $22,600 for the overall work. There is drywall installation, costing $1.40 to $2.20 per square foot.
Major systems, meanwhile, are typically centered around HVAC, electrical, and plumbing. HVAC systems will generally cost $1,615 to $1,931 per furnace material costs and plumbing is usually $70 per hour of labor. Electrical wiring is about $87 to $699, while electrical fixture installation is at a fixed $124.93 to $142.23 per 120-volt outlet.
Flooring costs between $705 and $5,291, but may be higher or lower depending on whether the project owner is looking for materials on top of labor.
Soft costs are concerned with the non-physical aspects of new home construction. Most project owners will pay most attention to things like design costs, permitting costs, and land.
Cost of the Land
While Baton Rouge was one of the fastest-growing cities in the south, it is now experiencing stagnant population growth. The sluggish population growth means that land prices will not increase as much as areas with higher inbound population growth.
The parcels of land available for residential development in Baton Rouge on Redfin have an average price of $179,553.33. The cheapest lot available is $9,900 for 2,613 square feet. It is located on 36th Street. Meanwhile, the most expensive lot is priced at $560,000. The lot is 12,225.53 square feet and is located along Ingleside Drive.
Permits and Other Fees
Information regarding obtaining permits in Baton Rouge can be found on the local government’s website. Permits can be applied for through the online platform MyGovermentOnline. The website also provides a list of works that do not require a permit and information required for residential plan reviews.
The local government has provided typical situations that require a permit:
- Any accessory structure over 200 square feet
- Any electrical work
- Any fencing that is 4 feet tall or higher
- Any modification of floor plan or structural aspect
- Changing out an air conditioning unit or components (excluding window units)
- Changing out or relocating a water heater
- Changing windows or doors
- Covered patios
- Gas line work
- Home additions and renovations
- Installing generator or solar panels
- A new residence
- Pools, in-ground and above ground
- Relocation of a house or mobile home
- Roofing and decking that exceeds 100 square feet
- Sewer line work
- Solid fencing that is 3 feet tall or higher
The following table provides information on the usual fees that need to be considered:
Architecture and Design Fees
Architects will typically charge based on the total cost of construction or total construction value. Baton Rouge will charge between 4 to 8%, depending on the services rendered, project complexity, and architect experience.
There are also architectural firms that may charge by the hour or by square footage. Pricing is based on the request, project location, and the architect’s position, experience, training, and reputation. Some of the common services new home construction projects require are layered drawings, project management, concept development, consultation, and site visits.
As for interior design, firms that are paid by the hour will generally charge $50 to $200 per hour. It is common to see services being offered between $85.77 to $97.34.
Some projects have total architectural costs at as low as $500 and as high as $17,000. The average total price most project owners have paid is $1,800 to $8,900.
The Future of Baton Rouge’s Residential Construction Industry
Despite Baton Rouge expecting a full job recovery by 2023, the construction industry will continue to experience the pressure of having a labor shortage. About 72% of general contractors foresee the labor shortage to be their biggest challenge for 2022.
Some firms have looked into making up for the lack of labor through the use of technology. Supposedly, having the right construction software and combining it with an automated drone surveying workflow will improve everyday efficiency. A survey in 2020 showed that about 32% of general contractors are looking into new technologies to optimize labor.
Innovating the industry will bring some relief to a workforce harried by supply chain issues and Hurricane Ida. While Baton Rouge was spared from the worst of things, there are still contractors that are helping families clear out debris and rebuild certain areas. This may result in higher project costs and longer completion times. There is also still a delay in materials like lumber, concrete, and steel.
The delays construction firms are experiencing are extending the completion time by about three months, which results in the average time to build a house going up to more than six months.