Breakdown of Soft Costs in Construction Projects


Soft costs represent a significant portion of construction costs. These costs typically are associated with nontangible items, such as design work, real estate fees, inspection fees, project management, and taxes. Soft costs typically constitute about 30 percent of the total construction cost, while the remaining portion of the total costs ​is related to hard costs, such as for the building, site work, landscaping, and overhead.

Architectural and Design Fees

The architectural and design fee includes costs of feasibility studies, master planning, design work, and related costs incurred throughout the project. These costs often vary by the project size and tend to represent a smaller percentage of total soft costs on larger projects.

Inspection Fees

Inspection fees include the cost of building inspections and fees for permits paid to the local government. These fees must be paid to gain authorization for the project. They can be related to permitting applications, costs to file permits, occupancy ​permits, and related transactions.

Land and Real Estate Costs

Land and real estate costs are associated with the legal process, appraisal, real estate, land acquisition, assessments, and improvements to land. Also included are costs for real estate research, surveying plats, lot assessment, and transaction costs related to easements and rights of way (ROWs). Land for temporary staging areas required along the route or off-site may present additional real estate costs.

Construction Equipment, Rentals, and Tools

Equipment costs categorized as soft costs can include equipment, supplies, and services that are not directly related to the final project delivery. This may include office equipment, office trailers, cellphones, radio communication systems, and staging area equipment.

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