Writings

Looking Forward to Monday Mornings
A series of essays on business, architecture, and the business of architecture.
A, B, or C
by Daniel Frisch
Posted November 27th, 2018

New York City is a mirage. People come here, work hard, and (mostly) succeed. At some point they decide their success should support participation in the American Dream and they set out to purchase their first apartment. “Moving on up, to a de-luxe apartment in the sky” was the theme song of “The Jeffersons,” a popular sit-com when I was a child. This was a fun proposition for a sit-com about an upwardly mobile family in the 70’s, yet that de-luxe apartment always seems just out of reach for other-wisely successful purchasers today. I don’t believe this is a new reality, just that the real world differs from sit-coms. The apartments featured in “Seinfeld” and “Friends” highlight the disconnect between television depiction and reality.

Regardless of the size or price of an apartment, I’ve rarely walked a space with a potential buyer that was not one room too small, and for which necessary renovations would not exceed the desired budget. When we are introduced to a new project, most clients are certain they know the scope of their proposed renovation project, and are considering the acquisition only within the narrow context of predetermined scope. Unfortunately, most initial thoughts and expectations about scope and budget are dramatically underestimated. To help communicate this spread between expectation and reality, we created a straightforward and disarming explanation to share with clients; a simplistic algorithm we call “A, B, or C.”

An “A” project type is one in which the scope can be contained and is unlikely to expand. This may be a stand-alone kitchen or bath renovation whose scope will not extend to include installing central air, room reconfigurations, and a complete re-wiring and repainting of the entire residence. We refer to these “A” projects as surgical interventions.

A “B” project is described by having many acceptable or even well-liked components, but where the intended scope touches a majority of areas. These “B” projects represent the majority of projects to which we are introduced. Usually, the buyer repeatedly asserts and assures that the project is “not a gut,” and that the intended scope is minimal, really a cosmetic project. Ninety-percent of the time, these “B” projects evolve to become full-scope undertakings. Real estate brokers consistently and predictably reinforce scope underestimation by presenting favorable brokerage materials. Apartments are shown in their best light and are easier to sell if represented this way. Purchasers are willing partners in this deception, usually confident of the acceptability of certain shortcomings of a particular property, or believing work could be performed down the road. While realtors have the experience to dig deeper, they lack the incentive, and buyers who don’t have the means, time, or desire to fully renovate complicitly cooperate.

Early in our career and with less experience, we were more willing to accommodate partial scope expectations – even when we were skeptical. When consulting with homeowners we aim to help assess project scope. First, we need to start with what is behind the walls, not just the cosmetic details. Would it make sense, for instance, to skim coat and paint an entire apartment without checking the wiring in the walls? We have also found many renovated apartments with floors that were not replaced when the rest of the renovations were made. It’s very hard to replace a floor after the fact. Similarly, most buildings in Manhattan do not allow for the replacement of bathroom fixtures and re-tiling without replacing the branch piping behind the walls and replacing the shower valves with up-to-code anti-scald valves. As a project’s scope increases to include wiring and plumbing work, costs increase, and not electively so. At which point, categories like air-conditioning tip the scales. Installing proper air conditioning (central where possible, through-wall where not), even with all of the associated costs, presents a meaningful return on investment – both from a lifestyle and monetary viewpoint. From an investment standpoint, we have found our clients have enjoyed the greater appreciation in value when they have undertaken full renovations as opposed to partial or cosmetic renovations. Few new buyers want to pay for a previous homeowner’s personal decoration, but almost all buyers are interested in buying a home that has had its electric upgraded, its bathrooms renovated, its kitchen redone and has central air (provided of course the work is technically and aesthetically well executed.

In addition to evaluating the systemic needs of a project, we also review the discretionary choices, many of which often tip the scales towards full renovations. An example I often use is ‘doors and hardware.’ Often a number of new door openings are necessitated by layout changes, and a number of doors are scheduled to remain. Should the new doors, hardware and trim be fabricated and installed to match the existing, or will the owner prefer to replace all the doors, hardware and trim to a new (improved) standard? It’s very hard to endorse making new installations match substandard existing conditions. Even the best items of a previous renovation usually look tired when placed next to new work.

At the end of the conversation, our clients have learned that their original – and certain – plan of a “B” might be ill considered, and that they would be wise to either limit the scope of the project and proceed with an “A” project or embrace scope-creep. To finish the alphabetical allegory, a “C” project is, therefore, a fully considered project for which the entire client program has been evaluated. After going through the through the three project types, it is no surprise that most of our projects fall into the “A” and “C” categories.

Most importantly, we hope to go through this analysis when buyers are considering acquisition, rather than after they have signed contracts. It is much easier to adjust budget and schedule expectations and set projects on solid footing before one has purchased.

DF, 1-19-2017