Chesapeake is a regional transportation hub known for being one of the most important commercial shipping ports worldwide. The city also has strong manufacturing, retail, and technical and professional service industries. According to Mayor Rick West’s State of the City address, Chesapeake is a thriving community for businesses to begin expanding. City leaders currently have several multi-million dollar projects in progress in the city.
The Cost of Building a Home in Chesapeake
Unfortunately, the construction industry in Chesapeake may have a difficult time keeping up with demand from both the residential and commercial sides. Firms continue to experience supply chain crises and skilled labor shortages, leading to a stretched-out workforce. On top of firms losing over half of their workers, there are no trade skills being taught in schools or apprenticeship programs being offered to close the gap left behind.
The Associated Builders and Contractors (ABC) foresees a massive shortage in at least one area of skilled labor for the rest of 2022. ABC’s forecast predicts a shortage of about 665,000 construction workers. While entry-level construction laborers increased by 72.8%, the total number of construction workers only went up by 25%.
Firms have also reported struggling with supply-related issues. With manufacturing sites having shut down due to the COVID-19 pandemic, getting materials has become difficult and costs have skyrocketed. The Associated General Contractors of America (AGC) stated that construction material costs jumped by almost 20% in 2021. The Producer Price Index for steel mill products went up by 0.2% in December and 127.2% over the last 12 months. Other material price indexes like lumber rose by 12.7% and plywood by 17.6%.
Most firms like the American Contracting Services, LLC do not foresee any price reductions any time soon.
The average cost of construction for Chesapeake is about $250 per square foot, which is much higher than the national average of $207 per square foot. Project owners can expect to see firms charging within the $200 to $300 per square foot range for the home building cost, which does not include things like heating, ventilation, and air conditioning (HVAC), kitchen space, bathroom space, or exterior elements. The actual construction cost will vary from project to project based on the type and quality. This does not include hard and soft costs.
Hard costs cover the aspects of construction that are physically part of the house itself, including framing, foundation, plumbing, flooring, and roofing. Soft costs, meanwhile, are related to things like the cost of land, permitting fees, and architectural and design fees. Project owners should keep in mind that hard and soft costs will fluctuate independently of each other, sometimes without warning.
Typically, new home construction projects in Chesapeake will start at $200 per square foot for value-conscious homes with basic and simple designs. Project owners who want to build a home with more customized features will come across firms that offer their services starting at $250 per square foot, which is generally for mid-value type homes. Building a fully customized and high-end home, meanwhile, could cost at least $300 per square foot. It should be noted that these figures are estimates and actual prices may be higher or lower depending on the square footage and additional features. These figures also do not include things like HVAC, kitchen space, bathroom space, and exterior elements.
Roofing costs in Chesapeake can range anywhere from $150.28 to $2,080.80 per 100 square feet, depending on the roofing type. The following table provides price ranges that project owners can expect to see:
Major systems are typically composed of HVAC, electrical, and plumbing. HVAC systems will generally cost between $200 to $28,000, depending on the service. Plumbing costs between $92 to $668, while electrical installation costs between $92 to $742.
Soft costs are expenses that go beyond the actual building of the structure. These costs include land costs, permitting fees, and architectural and design costs.
Cost of the Land
Chesapeake is currently experiencing positive population growth, with an annual growth rate of 0.99%. Because the city has inbound population growth, land costs are expected to increase more than cities with stagnant or negative population growth.
The parcels of land available for sale in Chesapeake on Zillow have an average cost of $123,466.67. The cheapest lot is being sold for $65,000. It can be found along Queen Street and is 7,405.2 square feet. The most expensive lot, meanwhile, costs $214,900 for 20,908.8 square feet. This lot can be found in Bellechase Court.
Redfin’s average cost of land is about $115,828.57. The cheapest and most expensive lots being sold are the same as ones on Zillow. The cheapest lot is being sold for $65,000 while the most expensive lot is priced at $214,900.
Permits and Other Fees
Information on the permitting process in Chesapeake can be found on the local government’s website. The website has forms that are required for residential building permits, which are the Land Disturbing Permit, the Mechanics Lien Agent, and the Commonwealth of Virginia Contractor’s License.
The immediate fees that need to be paid upon permit issuance are as follows:
- The permit fee is based upon the square footage of the structure. The minimum fee is an administrative fee of $40 for issuing each permit, plus an additional $6 per 100 square feet or fraction thereof. The cost for residential permits can also be found on the Residential Fee Schedule.
For example: For a new residential construction project that has 2,200 square feet, the fee will be calculated as follows:
2200 ÷ 100 = 22
22 x 6 = $132 + $40 (administrative fee) = base fee $172
- Minimum fee — $40
- Land Disturber Registration — $30 (for new construction only)
- Zoning Review of residential plans — $10
- Certificate of Occupancy fee — $30 (will be included to the building permit fee)
- Driveway permit fee (if applicable) — $30
- 2% state levy is assessed to each fee by the State of Virginia excluding City water and sewer fees
- Technology Fee — $5
- Hampton Road Sanitary Disposal (HRSD) fee — $1,895 (will be paid separately from other fees)
- City Water Fee (Part II Code of Ordinances – Chapter 78 Utilities – Article IV Rates, Charges and Fees – Section 78-86)
- City Sewer Fee (Part II Code of Ordinances – Chapter 78 Utilities – Article IV Rates, Charges and Fees – Section 78-86)
- Plan Review Fee Schedule
After obtaining the required building permits, the electrical, plumbing, and mechanical and gas permits are required. These permits can be applied for online, through the local government’s eBUILD platform. There is also the option to apply for these permits in person. The following are links to the necessary forms:
Permits found on online contractor marketplace BuildZoom (BZ) show that the average cost of permits in the last five years is $590.10.
Architecture and Design Fees
Architects will typically base their costs on the total cost of construction or total construction value. Nationally, that would be around 5 to 20%, depending on the service, project complexity, and architect experience.
Some firms may also price their services by the hour or by square footage. Chesapeake architects tend to charge $5 per square foot for value-conscious projects, $7.50 per square foot for mid-range projects, and $10 to $13 per square foot for high-end custom homes. These prices are estimates and do not include consultants or interior designers. It is more common to see firms pricing their services in the value-conscious and high-end ranges.
Pricing will typically be based on the request, project location, and the architect’s position, experience, training, and reputation. Some of the most common services homeowners avail of are layered drawings, project management, concept development, consultation, and site visits.
What Leading Custom Home Builders and Architects that Serve the Chesapeake Area Say
Charles Wermers, founder of Wermers Design & Architecture, PLC, shared that the biggest concern at the moment is the cost of construction, which has shot up by 20% in the last couple of years. Firms are also experiencing long lead times. Wermers noted that delayed projects are experiencing cost overruns.
“Projects must be effective, authentic, and efficient to satisfy the needs and program of the owner,” said Wermer. His advice is to put importance on design, stating that style is meant to be a clever and beautiful expression of meeting a client’s needs.
The Future of Chesapeake’s Residential Construction Industry
The construction industry in Chesapeake continues to experience trouble with labor shortages, which ABC expects to last the entire 2022. The labor shortage is a result of several factors, including an aging workforce and a lack of trade skills being taught in schools or apprenticeship programs being offered.
This labor shortage, alongside supply chain issues, is causing the price of construction to rise. Some firms have also taken to limiting the number of projects they accept to prevent missing project deadlines. ABC predicts a shortage of about 665,000 construction workers.