arranged as a timeline
This article includes a lot of public information from the City of Louisville, Superior, and Boulder County, but also professional opinions by me, Aide Fitch. I’m a local architect and fire survivor like you and I LOVE our community.
Due February 25 Opt in or out of coordinated cleanup
Due March 1 Apply for the SBA loan. Everyone should do this. You do not have to use it, but the interest rate is in the low low range of 1.4%. update: Now that my insurance structure payout and loan application have both been processed, my insurance structure payout is overriding the SBA loan. The loan can only cover gaps between your insurance and the official verified loss calculated by SBA or FEMA (? not sure which), and in my case it turns out to be even lower than what my insurance company calculated. Unfortunately for me. But maybe it can help you if you’re severely underinsured. I’m also glad I did apply because SBA could come back around and increase their rebuild estimates, thereby making me eligible again. I’ve seen some political action on this front.
around now Get comfortable. By now you should be getting settled into a long term temporary home situation that is comfortable for you and your family. Why is this worth mentioning? Because the last thing you want going into negotiations with a contractor is to be in a rush, under the gun, or in any way frazzled. You want time on your side so you can negotiate from a position of power. Maybe you’re nervous because the construction market is very hard right now? Labor shortages, material supply issues, these are all the more reason to slow down and take control. Make sure your family is happy. Make sure you’re happy.
Have you inquired whether there’s a hard stop on your ALE coverage? Mine says 24 months on the policy, however, my adjuster says it can continue to extend if construction takes longer. You should consider that, even if your insurance ALE coverage runs out after 24 months, you ought to keep a fund set aside to be able to easily extend your temporary housing beyond 24 months. Even if it’s just for 3-4 months longer, this can give you the stability and strength to weather the bumps that WILL happen over the course a construction project. You might also consider using your ALE coverage to pay a mortgage on an investment house you can buy and live in while waiting for your house reconstruction. That way you can get free equity in an investment! I did this and just had my ALE coverage approved to cover my monthly mortgage payment (including principal, interest, taxes, and insurance), plus additional coverage for an office rental, since my new home is half the size and no longer contains a home office. (Note that there will be some income tax consequences for this. But the equity, and not to mention peace of mind, is a huge net win.) If you can’t find anything affordable in Louisville of Lafayette, Longmont has much more affordable houses, and a quaint downtown and old town. It’s a great place to invest nearby.
around now Think for yourself and create your Program. Another way to be in a strong position going into a negotiation with a contractor, AND an architect, is to sit down with yourself and your family (whoever will be living in your newly constructed house), and think through in detail how you want to live in the new space. This is called Architectural Programming (learn more here) and is a fundamental good practice for architects to guide you through prior to beginning design. But it’s an even better practice for you to do on your own first. It can give you a clear picture of whether you even need an architect, or whether there’s a spec plan out there that matches your needs. And if you do engage an architect you’ll be prepared to keep them focused. It can also give you a clear picture of the type of builder you need. Here are some basic questions to answer:
- How do you want to live?
- What about your old home did you not like?
- What are special conditions you’d like your home to accommodate? Aging in place, young children, disabilities, a job or an important hobby, extended family or guests, pets, a mud room for a Colorado outdoor lifestyle, etc.
- Now write down what spaces you’ll need for what purposes, your estimate for square footage needs for each space, and additional requirements of the space such as natural light, windows, ventilation, ground floor access, equipment.
- Don’t forget storage spaces such as closets and garage.
- Write down which spaces need to be near each other and why.
- If you’re curious what I’m doing with my own rebuild: The #1 thing I’m looking for in my new home is natural light. I’ll be designing my home to be small, simple (i.e. easy to maintain!), and provide cool natural light through a central light well, and not too many south and west facing windows, which can over-collect summer heat. If you do have south facing windows, you can control the summer heat with overhangs and trees. Western windows are difficult to control. Oh, and did I mention small? My family just downsized by half into the little 1500 sf home we bought, and we’re thriving in it. Our new neighborhood is full of 1500 sf houses and families who love being outside and not being bogged down by stuff and house to take care of. We’re literally and figuratively closer these days. My rule of thumb is that 2400 sf is the max you really need for a modern family of 4. Anything bigger than that starts to do silly things to your layout, like add an extra dining area or a formal sitting room that’s never used. Small is beautiful. More inspiration here.
around now Get past the energy code. Many Louisville neighbors have been nervous about the new building energy code and have been spending a lot of time and energy fighting it. But, take it from an architect who has specialized in building energy and cost modeling my entire career, this energy code and the benefits that will accumulate to you are fabulous, and fighting it or opting out is a poor choice. I recently worked with a group of building professionals, including the folks here, to assemble a detailed cost calculator for your particular house square footage. It will tell you your financial outlook for a variety of code options, as well as historic code compliance going back to 1990, so you can use it to claim your insurance “law and order” coverage.
Building codes protect us from ourselves. Let’s not forget that the entire reason we’re moving to these better energy codes is to reduce climate change caused by greenhouse gas production and also reduce the localized bad air quality from leaky gas lines, gas drilling, and gas appliances. Yes, the IECC 2021 code doesn’t reduce energy an enormous amount over IECC 2018, but the point of it is to get buildings ready to be fully powered by renewable energy. So we’re not relying on fossil fuels that cause climate change (and wars). And, how did this suburban wildfire happen in the first place?
Maybe you’re still struggling to cover these costs for some reason? If so, please contact me! (See my contact at the bottom of this article.) I have access to resources for those who are truly still not able to cover these costs, and I will connect you to them!
soon Change your insurance policy. Since you no longer have a structure on the property, you shouldn’t be paying for that same coverage every month! While you’re at it, consider getting curbs and sidewalks covered. See more information about that on the Site Coordination page.
soon Consider paying off your mortgage, or not. As soon as you receive your insurance payout, you should be able to pay off your old mortgage. You should consider whether this would be a net benefit to you. The pros: This will allow you to control how the rest of the insurance money is disbursed to your architect and builder. This is a position of power, because you can pay faster with less paperwork, making your contractors happier and harder working. And it makes your life easier. Also, of course, you’ll save many months worth of mortgage interest. The cons: It could leave you with not enough to rebuild with. If you want to take out a construction loan in the future the interest rates will probably be higher than what your old mortgage was. You’ll have to work out the numbers on whether you can afford construction costs after using some cash to pay off the mortgage, but that additional money can come from a number of additional pools: PPE insurance payout not just structure, the SBA loan cited above (which for certain carries a better rate than your old mortgage!), and savings including retirement accounts (it may be time to consider breaking open retirement accounts if the numbers make sense).
March-April 2022 Look for a builder/architect combination that works for you, talk with neighbors about a group deal. You might get away with a spec or shared plan. But if your lot is sloped, a spec plan may not help you much, since at least a third of your house will need to be custom designed (the foundation and entire basement).
March-April 2022 Reassess what you think can pay for your new home and what it’s worth to you. So far, our community is seeing builder quotes in the range of $250-$500 per sf (some even more than that). Hopefully you’ve identified an option in a range reasonable for you. Now, looking back at the steps outlined above, you may still be struggling to close the gap financially. Personally, I’ll be making up our gap with the enormous amount of PPE content money we received from insurance. We received $330,000, and we just live too simply to ever spend all that on contents. I had also previously saved up money for a renovation. Many of our homes were getting old and in need of renovation anyway. Consider that at the end of this you’ll be getting a brand new house and won’t have to spend money on maintenance for a while.
Also consider the square footage you actually need. Less costs less! See the section above about your Program. Consider how long you’ll actually be using this new home– it’s all finite. Consider the eventual resale value of the home. Square footage still makes money in real estate, but never as much as location, location, location. So, if it’s a little smaller than others, it won’t necessary be valued that much less.
when you’re ready Negotiate hard and partner. Get yourself in as good a position as possible with finances, time, and personal happiness. Then, talk timeline with your builder. In the contract, agree on a payment schedule, based on the completion of work over time. Every builder has a different schedule. Ask yours to write out the expected significant dates of completion (foundation, framing, drying in, etc.), what should be complete then, and how much they should get paid at that date. Show your builder you will be their partner, will pay them on time, will commit to the plan and won’t waste their time changes, and they are more likely to be your partner.
Once you get in their schedule, your builder is going to need at bare minimum 4 months once they break ground, but there will be weather delays, supply delays, labor delays, and unknowns. Your builder is probably not going to guarantee you a completion date. Guaranteed completion dates cost lots of money and usually are used for mission critical government and corporate facilities. So, you’d better bet that once your builder gets in their position of power, they will use it. What does their position of power look like? When they have broken ground on your house, gotten some of the work done, permits and crew in order, have your roof wide open still, and winter is coming. That’s when their problems become your problems. You’d better bet that there will be problems, such as materials that cannot be obtained without a cost premium or workers walking or getting poached by other builders. I’ve seen it all. I worked on a large construction project where the windows we specified suddenly could not be sourced due to extreme shortages after Hurricane Katrina, but the contractor found a warehouse full of sub-optimal windows for a higher price, and we were stuck having to pay extra instead of delaying the project indefinitely. Consider how this will feel for you. Consider negotiating your construction schedule and price accordingly, before you sign the contract. What is the quickest timeline you can possibly expect?
- completion of cleanup: For many this is July, when the coordinated cleanup is expected to be substantially complete. For others you might get it done now with a private contractor, which I don’t recommend unless you have a special need to get done quickly.
- 4 months bare minimum of design and engineering time. (You need to allow for more, but this is bare minimum.) This can overlap with cleanup.
- 4 months bare minimum construction.
So, for the very fastest of our neighbors, those who are doing their own cleanup and have already secured a contractor, they may be wrapping up construction at the end of 2022. They are brave souls, pioneers, those who get there first. They will be inhabiting a construction zone for years to come. If you have a good need to get there first, and the resources to do so, my hat is off to you. But otherwise, consider taking this slow. Fast is expensive.
For the next level of detail, please see our Detailed Professional Rebuilding Timeline.
This was mostly written by me, Aide Fitch, a neighbor, fire survivor, and architect, happy to offer free help to my neighbors with their architectural questions. Here’s a form that limits spam to my inbox: