Deconstruction versus Demolition

Bob Borson —  November 4, 2013 — 28 Comments

Deconstruction is an environmentally friendly alternative to demolition and on the KHouse Modern project, the existing house on site is currently going through the process of being taken apart piece by piece. Despite the fact that we are going to seek LEED for Homes certification for our project (where deconstruction is preferable to demolition), there are benefits to every residential home owner who is planning on building a new house on a site where a house currently exists.

Deconstructed Kitchen

To compare the difference between demolition versus deconstruction is pretty simple:

Demolition = shut down/ disconnect utilities, smash everything down, haul off to the dump

Deconstruction = Tcrews carefully deconstruct the building to salvage as many of the reusable materials as possible, diverting them from local landfills. Salvaged items typically include doors, windows, cabinets, lighting and plumbing fixtures, framing lumber, roofing materials, and flooring.

So what are the advantages to deconstruction? For most people, it starts and ends with the bottom line – the $$$. On average, the cost to demolish a house is about 1/2 as much as it is to deconstruction a house (i.e. $15,000 for demolition vs. $30,000 for deconstruction.) Let me guess what you’re thinking – “why would I pay twice as much to deconstruct my house rather than just demolish it?!?

Two words – Tax. Deduction.

reclaiming plumbing fixtures

It should come as no surprise that the value of your “used building material” donation could be substantial. I would even go so far as to suggest that it is typically large enough to pay for the costs of deconstruction. In a worst case scenario – from a cash out-of-pocket standpoint – being able to donate building materials from your house which could offset the cost of your demolition (regardless of how small it may be) makes deconstruction something to consider. Beyond the worst case scenario, your material donation could greatly exceed the costs of your deconstruction, making the process a positive cash flow solution.

salvaging doors for reuse

Of course, you probably want cost benefit specifics but guess what? I’m not going to provide them because there are literally a million moving parts on this process. The value of your material donations will vary depending on your location, the age and condition of the your home and it’s salvaged materials, the type of exterior cladding, interior wall finish, trim work, countertops, landfill rates, etc. Despite these variables, and partnering with the right deconstruction vendor, the cost benefits almost always favor deconstruction over demolition.

deconstruction - salvaging your home for tax benefits

There is a process to doing deconstruction that adds some time to the overall project schedule. Where demolition would take only a few days, deconstruction takes quite a bit longer – about 4 times as long. In addition to the on site work, there is plenty of work to be done and tasks to be scheduled and arranged ahead of time.

Any in-kind donation, valued at $500 or greater, requires the donor, or the donor’s professional tax preparer, to complete IRS Form 8283. To actually determine the value of a donation, you need to know the following:

  • If the value of the donation is $500 or greater, Form 8283 requires the preparation of an appraisal report and the signature of an independent, third-party appraiser.
  • Appraisers must be IRS qualified, and the appraisal must be conducted under the standards of the Appraisal Foundation, which requires that appraisers be entirely independent.
  • The materials valued by the appraiser must be listed on a donation form with specific and detailed information sufficient to enable the IRS to make its own assessment as to the types of materials donated and their condition.
  • The materials list must only be prepared by the donee (recipient organization) in collaboration and agreement with the donor.

salvaging trim and wood paneling for tax benefits

Next, you will need to retain the services of a Licensed Independent Appraiser – and not all licensed appraisers are qualified to appraise used building materials. This appraiser needs to be an IRS qualified appraiser, one with the background, education, training and professional certifications in the exact type of materials they are being asked to value. Finally, your appraisers – in order to maintain independence – may not participate in the selection of materials that will ultimately be qualified for donation as this would involve them in the donation transaction and pose a potential conflict of interest when the quantity of donated materials might be inflated simply to increase the cost of the appraisal.

Whew! If this process seems overly complicated don’t worry – most of the heavy lifting can be done by others once you decide to pursue this path. I don’t have a list of names to give you here and until this deconstruction process is completed on the KHouse Modern, I’d prefer to keep our vendor’s name to myself. We have a really savvy client on this project and this process was initiated by him – I have been playing catch-up from the beginning.

If you have any thoughts, or have gone through this process yourself, I would love for you to share them in the comment section below. I will continue my own research on the process and as I discover resources worth sharing, I will come back and amend this article.

Cheers,

Bob Borson signature

 

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  • Arihant Jain

    Hello Bob sir, I read a few articles of yours! They are down to ground and easy to understand. Being an architecture student, I have trouble with the ‘concept formation’ part of design process. Can you give an article or some comments on that? Also, I want you to tell a few things like:
    1. Theories like Deconstructivism, Paramatricism, etc.
    2. A proper Design process that you follow or that must be followed.
    3. Function follows form and vice-versa abd their design process.
    I look forward to your articles/replies. :)

  • Eric

    Financial costs/benefits aside, but from the more ecologically responsible perspective, some salvage places (I know at least one here in Phoenix) will come and carefully remove cabinets, doors, and fixtures for resale–whether or not you want to deal with an appraiser, etc, it seems like a no-brainer to have someone come through for free and save all that going to the landfill before bringing in the wrecking ball…

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  • 03306028

    Pardon me while my inner hippie hops up on a soap box here:

    This has always bugged me about most of the renovation shows that air on DIY Network and the like. While some of the shows do center around salvagers and a couple of their celeb-builders actively look for ways to re-use material and seek out salvage for projects (especially now that reclaimed lumber is so vogue), for most the first step is to break out the sledge hammers and load up a dumpster or two.

    Now I won’t deny that watching a toilet get defenestrated from the second story into a mirror is highly entertaining, but it’s a shame to see so much waste when there are Habitat Re-Stores all over the country available that could save this stuff from filling up a landfill. Most locations will even come pick up items for free.

    I was also surprised, and this is a bit off topic here, to learn how much waste is generated through general construction practices in both new construction and remodels/restorations. I worked construction for a while and part of the job was loading site garbage on trailers – paper, cardboard, lumber, osb, plastics, all things that could have just as easily been sent to a recycling center. Locally, our landfill and recycling center are on the same property! With just a little extra effort tons, and I literally mean tons, of material could have been sorted out, reused, and lived another life, but instead is now sitting in the ground somewhere for the next however long.

    This Old House did a remodel a few years ago in Texas they called the Austin Green Project (episodes available online) where they achieved a 5 star rating from the Austin Energy Green Building Program. If anyone is interested in learning more about LEED and green building practices in general, the series did a great job of explaining the process and what goes into obtaining LEED cert.

    Anyway, it’s nice to see folks in the field bringing attention to recycling opportunities and sustainable building. While green practices aren’t as mainstream as they could be, they are gaining traction through education. And what better way than to appeal to pocketbooks through tax breaks and the like? Great post. Thanks.

  • Mark Mc Swain

    Deconstruction is one of the best ways for clients wanting to “sweat equity” their homes.
    Unlike almost every other aspect of home building, deconstruction can be a DIY OTJ-learned skill set.
    Tougherst part is that some of the best candidates for deconstruction are in rural areas, which are much more complicated for donating the materials recovered.

  • Tilbury

    Hi Bob – I’m a recent “follower” of your blog and am wondering if you’ve done a blog about LEED for Homes or other green building programs? It’s a tough sell where I’m from in Saskatchewan, Canada and am curious what the popularity of LEED for Homes is in other regions?

    • Tilbury

      Apparently I need to figure this blogging stuff out:)

    • http://www.lifeofanarchitect.com Bob Borson

      We are going after LEED for Homes certification currently on this house but it will be the first one if we are successful. We have started the process many times before but the homeowners have always decided not to see the process through for one reason or another. As part of my on-going coverage of the KHouse Modern project, I will certainly talk about the LEED for Homes process. Cheers

  • Guest

    Hi Bob – I’ve just recently discovered your site and have been following but I’m wondering if you’ve done any blogs on LEED for Homes or if you intend to? It’s a very tough sell in Western Canada where I’m from and I’m curious what the popularity of LEED and other green building programs is like in other regions..

    • http://www.lifeofanarchitect.com Bob Borson

      We are going after LEED for Homes certification currently on this house but it will be the first one if we are successful. We have started the process many times before but the homeowners have always decided not to see the process through for one reason or another. As part of my on-going coverage of the KHouse Modern project, I will certainly talk about the LEED for Homes process.

  • GinnyPowell

    During a day volunteering with Habitat for Humanity we deconstructed a large house that was scheduled for demolition. I pulled up bricks from the driveway/walkway while others salvaged fixtures, moulding, cabinetry etc. Material was then transferred to Habitat’s ReStore in Tampa. It was a fun project!

    • http://www.lifeofanarchitect.com Bob Borson

      Good effort for a good cause – it’s a win win for everyone. Some of the materials from this project will make their way to Habitat for Humanity as well!

  • Taxessuck

    Ok. I am trained as an Architect and not an accountant or tax expert. With that said, I know this is a stupid question, but I’m going to throw it out there. How do tax deductions work? Is the value of the materials being salvaged deducted from your annual income? Which reduces your taxable income? Or are the taxes you owe reduced by the cost of the salvage material?

    • http://www.lifeofanarchitect.com Bob Borson

      I could define myself with the same descriptors …

      Your materials are valued at some certain value and as I understand it, you are then able to take the charitable contribution deductions based on your tax bracket. Another way of looking at it – let’s say your appraised donation is valued at $100,000 and you are in the 28% tax bracket – you get to deduct $28K from your taxable income.

      I think.

      • Taxessuck

        LOL. How many architects does it take to figure out a tax question. Ha Ha. That is what I think it means to. It drops you into a lower tax bracket so you pay less tax.

        • Mark Mc Swain

          Sadly, my experience is that the answer depends upon the Schedule the deduction appears upon..
          If I’m rmembering it right, Deductions decrease the taxable income used to calculate taxes owed.
          Some itemized values act as ‘rebates’ and directly reduce the tax-due amount.
          Or some-such–I rely heavily upon software and paid professionals for such things.

  • krzystoff

    In Australia, a lot of building contractors and demolishers will factor in some salvage in their price, so organising a third party to come in a strip it doesn’t bring such clear-cut benefits on small projects. however, on large commercial jobs, the salvaged materials can pay vastly more than this, and is unlikely to be ignored. also, rather than one or two odd items that you might find in a residential project, larger scale jobs bring vastly more undamaged, reusable materials in saleable groups of hundreds or thousands (eg. doors/windows/light fixtures/basins/etc).
    Another problem is asbestos and to a smaller extent other toxic materials — in most cases, residential demolitions reveal a significant amount of these problematic materials — salvaging could disturb them and cause a halt to any further works, whilst a single stage demolition team will remove and knock-down as they go without shutdowns or slowdowns.

    • http://www.lifeofanarchitect.com Bob Borson

      Do you really run into asbestos related issues in residential demolition? I haven’t come across that issue but once and it was the adhesive that was used to secure the linoleum to the sub-deck.

      • krzystoff

        It is estimated that 98% of homes constructed before 1976 contained asbestos products(according to the (Aust. Govt Asbestos Task Force 2005). Some common uses around the home included:
        Asbestos cement sheeting used in walls, ceilings and floors, Hot water pipes set into masonry walls, Lagging on hot water pipes, Insulation in wood heaters, Wrap on pipes and boilers, Sheeting in roofs and walls, Electrical meter boards, Asbestos cement sheeting beneath heater hearths, Vinyl floor tiles, Backing to cushion vinyl flooring, Flat, patterned and corrugated wall and roof sheeting, Imitation brick cladding, Lining under eaves, Garden sheds, Garages and carports, Dog kennels
        In the 70s people even made furniture out of the stuff.
        We found asbestos along the boundary fences of our property, just below the surface, supposedly a termite barrier, according to the removalists.
        In India and some other poor countries, asbestos is still allowed today, due to it’s superior fire resistance properties.

  • Studio Blue

    Very interesting article. In the UK deconstruction has no financial benefits, or at least that I know of. There are some projects (state funded mainly) that will get a higher performance certificate if a more sustainable way is considered during demolition but not as you are describing it in the US.
    Thank you for the article,
    Elisa

    • http://www.lifeofanarchitect.com Bob Borson

      are there material resale shops in the UK where the existing building materials could be sent/ sold to offset some of the costs associated with demolition? While you might not be able to donate them in a manner that we can in the US, maybe you can outright sell them.

      • Helen Gray

        In the UK, if you demolish and build from scratch, you do not pay tax (VAT currently at 20%) on building materials or labour for the new house (although you still do so on professional fees e.g. architects, surveyors etc). If you keep the walls of an existing house, this can count as remodel/refurb rather than new build, and ‘attract’ the tax of 20%. Not sure what the position is on salvaging whilst taking the house down to the ground – don’t see why that wouldn’t work. However, the homebuilding TV programmes we watch tend to imply that the labour costs involved in cleaning up the salvaged material fit to reuse are so high they cancel out any benefit, becoming eco-vanity. Helen

        • http://www.lifeofanarchitect.com Bob Borson

          If I am understanding your comment properly, you are penalized for reusing part of a house (paying the 20% tax) while avoiding the tax if you scrape the lot and start fresh?

          That really makes no sense at all to me.

          • Jonathan Stevens

            But is absolutely correct.

          • Mark Mc Swain

            As a guess, this is the intersection of having housing stock–in a widely varying range of quality–from 500 to 5 years’ old.
            Only so many times you can knock holes in a half-millenium aged building for modern mechanicals befre the thing is more ‘swiss’ than cheese.

          • Helen Gray

            You are absolutely correct. We are finishing our build on a former empty plot, so the dilemma didn’t arise for us, but we certainly weighed up the financial pros and cons of demolition in looking at other sites we considered. And demolition almost always won.