(Budget) honesty is always the best policy

This is a topic that spends a disproportionate amount of time in our heads. While we are motivated by the positive impact we can have on the world through the work we do here at Envirotecture, the reality is that the cost of construction is a challenge on every project regardless of scale or budget. Expectations are commensurate with budgets!

Putting digital pen to digital paper has been inspired by a particular conversation though…

We are frequently contacted by potential new clients (lovely!), part of the process involves them providing us with an outline of what they are wishing to achieve including a single question on their project budget; see here for one of the ways that can occur.

The answer to the budget question can often generate a very honest response: “we’d love to help but unfortunately your budget will not allow you to”. This can lead to one of two broad scenarios, one, where we wish each other well and go our separate ways. The other, where a conversation leads to either a revision of the wishes and/or the budget number and progress towards a design solution that does tick boxes.

Delivering that often unwelcome, although not always surprising, news of insufficient budget is rarely fun for us but as we know a lot about the costs of construction we believe it is unethical to do anything else. We are optimists but have learned that realism needs to be a bedfellow with it. While we will never know exactly what something will cost (only a contract between client and builder does at a particular point in time) even at the early stages we can see which briefs are misaligned with budgets. 

For those who are unable to revisit the wish list or budget, we also offer this cautionary tale. There have been plenty of people in their shoes who we have seen meander off to other design professionals, presumably with the same wish list and budget, only to hear 12+ months later that all had gone sideways due to unaffordable construction costs. If someone claims to solve a problem no one else can, please be sure to ask how they are going to do that and why it will work. We can not be sure exactly what happens and don't want to cast dispersions but we use this tale to caution; if it sounds too good to be true, it probably is!

Now the inspiration for this piece was a sit down discussion on the topic with a potential client. When discussing the budget they let slip that “our mortgage broker told us to tell you half of the budget number because the costs always go over!”

While, especially post-covid, there are increasing stories about cost overruns, this initial dishonesty around budget is incredibly unhelpful to everyone.

Firstly, as registered architects, we have a legal responsibility to design to meet the budget. As mentioned above, we will never be 100% accurate (only the contract price is ever that) but we should be pretty close. If you are unable to trust your design team, you should probably choose a different team until you find one you can.

Secondly, let's assume that we fulfill our professional duty, you will end up with a project that costs half of your budget! This could be a good thing. The other way to look at it is that you may also only get half of the value. We certainly do not think that more expensive projects are inherently better but we do know that there is a huge difference between $600k renovation and $1.2m one. It could be more space, better quality, better materials, higher thermal performance, greater efficiency; it all depends what value means to you and what you choose to prioritise.

Budget honesty does not mean that you should not have access to a contingency, especially for a renovation but, if you are about to embark on a multi-year project starting from a place of trust and transparency puts the project on the right footing. There will be bumps in the road, a solid foundation will take the edge off them!

Many people find talking about money awkward yet when embarking on one of the most expensive projects of your life, this is not the time for bashfulness. 

Find people who you like, be honest with them and expect the same in return.

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