(510) 383-1983
9235 San Leandro St. Oakland, CA 94603

So, You Think Deconstruction Costs Too Much and Takes Too Long?

Published on: Sep 09, 2024

They say if you tell a lie often enough, people will eventually believe it’s the truth. Maybe that explains why so many people believe that deconstruction is overly expensive and time-consuming. So, let’s walk through a typical case and see how it actually plays out.

Assume you purchase a 2,300 square-foot house from a family that owned and maintained it for about 20 years. The former owners made small improvements, including kitchen, bath and window upgrades. The property is located in a reasonably dense area where real estate is in high demand. You purchase the property for $1,000,000, plan to live in the existing house for a year and then replace it with your dream home. You and your designer/architect wrestle with the design and cost estimates, figuring that permits, architectural issues and construction will cost another million dollars, probably a little more.

It’s now time to submit the plans to your city’s building department, and you wonder if deconstruction is worth considering. Additional time and cost questions concern you.

The time argument: It will take approximately six to twelve months to get your permit and another nine months to a year for actual construction, assuming weather and the materials supply chains are accommodating. If done correctly, deconstruction will take two to three weeks longer than demolition.

If your design, permitting and construction can be completed in a minimum of 15 months, then deconstruction will add only three to five percent to your timeline. However, many cities and counties allow demolition/deconstruction permits to be issued prior to building permits, meaning deconstruction can be completed while your plans are being approved – completely eliminating the time factor.

The cost: You have now owned the property for over two years. The average price of residential real estate in the U.S. goes up six percent per year, so your property is now worth $1,123,000 even without the additional value of the new home. You have added $123,000 to your net worth. What more do you need to do the right thing?

If you’re looking for added incentive, here it is: With a little investigation, you and your tax person can find a nonprofit organization, like The ReUse People, that is qualified by the IRS to receive your tax-deductible donation of the building materials salvaged through deconstruction. How much of a tax deduction? Well, the house described above could earn you $50,000 to $90,000 or more, depending on the quantity and quality of the materials salvaged and the care taken by the deconstruction contractor.

Remember, the skill of the contractor is key to maximizing your donation. Assuming you file your taxes jointly and have a maximum top marginal tax bracket of 24 percent, then from a donation appraised at $75,000 your after-tax benefit would be $18,000. That is approximately the difference between demolition and deconstruction.

Others may try to dissuade you (beware, those oft-told lies), so go to www.TheReUsePeople.org and click on “Residential.” You will see example benefits received by thousands of homeowners.

View Cart
View Account