Furthermore, each sector has a particular “personality” or character. Everyone interested in pursuing a career in construction management will ultimately have to choose which sector they are most attracted to. So, let's take a closer look at each of these sectors.
Residential Building
Residential construction addresses the housing needs of a society. Housing construction takes many forms: individual homes, apartments, condominiums, townhouses, and prefabricated units such as modular and manufactured homes.
NOTE
Individual homes are classified as single-family dwellings. Apartments, condominiums, and townhouses are all referred to as multi-family dwellings.
Residential construction is typically funded by private individuals or developers for their own use or for sale. Builders of individual homes generally fall within one of three categories: they are custom builders constructing one-of-a-kind homes for specific customers on specific lots, they are single-family small-volume builders who build 25 or fewer homes a year, or they are single-family production builders who build more than 25 homes a year.
Although custom and small-volume builders account for approximately 70 to 80 percent of all residential builders, they produce only about 20 percent of the homes. On the other hand, production builders construct almost 80 percent of the homes in the United States.
Although some custom homes may be designed by an architect, many house plans are available from catalogs and plan books. In some cases, the contractor may provide the design for the customer. Engineering services are rarely required, and construction techniques are relatively simple. The project duration for a typical single-family home is in the three- to six-month range. Even high-end custom homes can be built in one year or less. Large production builders focus their efforts by creating communities of 50 to 400 houses in one location. These large projects will build out over several years.
NOTE
Production builders used to be called tract builders. Tract builders gained a reputation in the 1940s, 1950s, and 1960s for producing “cookie-cutter” homes—homes that all looked alike. Today's production builders offer numerous custom options and upgrades while still utilizing standard designs and floor plans.
Means and Methods
Residential construction is relatively low-tech in terms of the means and methods needed to produce its product. Hammers, nails, drills, and saws still make up the primary tools and equipment needed to perform the construction tasks, although the hammers are now pneumatic nailing guns. Many contractors joke that any two guys with a pickup truck, a cell phone, and a dog can start a residential construction company. This exaggeration is not far from the truth. The residential construction market is relatively easy to get into; however, because so many of the companies are very small, they are also at high risk for failure. One bad job can put the contractor out of business in a hurry. However, the large production builders are big business, generating annual revenues and profits surpassing those of many large commercial construction companies. They are engaged in every aspect of home building, from land acquisition to financing, and are often publicly owned and traded on the stock market.
Primary Materials
Residential construction is often referred to as wood frame construction or light framing. The building materials utilized in this sector are typically wood products such as lumber and plywood. Over the past 25 to 30 years, attempts have been made to replace traditional wood framing with light gauge steel framing in an effort to conserve natural resources. The use of light gauge steel is still quite limited in residential framing; however, great strides have been made in better utilizing every piece of a harvested tree: the branches, the wood chips, and even the sawdust. Numerous engineered wood products have emerged, such as roof and floor trusses, laminated beams, oriented strand board, and wood I-beams. These products are now commonplace.
Exterior finishes for residential buildings are usually limited to siding, brick, or stucco. Single-family dwellings are most often designed with pitched roofs utilizing various types of shingles or tiles made of asphalt, clay, concrete, or slate. Interior finishes typically include drywall partitions and ceilings with paint or wall coverings and carpet, tile, hardwood, laminate, or sheet vinyl floors.
Characteristics
Whether the residential construction firm is a small mom-and-pop operation or a huge publicly owned enterprise, there are certain characteristics of this market that anyone contemplating a career in building should understand. Home building is personal. Your client is usually an individual family with individual personalities. This is probably not the sector for you if you are not a people person. Home buyers are spending their personal funds on these projects, and usually it is the single largest amount of money they have ever spent.
As a construction manager, you will be directly involved with the owner on a regular basis. You will get to experience the full range of emotions and temperaments associated with the home-buying public. There is a great deal of personal service and hand-holding that will be required of you. Many construction professionals delight in this aspect of the business, anxious to address every detail and concern that an owner might have regarding the building process, while others cringe at the thought of having to deal with someone at such an intimate level.
Residential construction companies come in all sizes. Some limit their service area to a local market, others might expand operations regionally or nationally, and a few are even building overseas in Europe and South America. Of all the construction industry sectors, the residential sector probably requires the broadest scope of knowledge. Construction is only one facet of the home-building business. An understanding of sales, marketing, financing, land development, entitlement, building codes, purchasing, construction operations, customer service, and warranty are all needed to participate in this sector of the industry.
Commercial Building
This sector of the industry primarily addresses the needs of commerce, trade, and government and makes up about a third of the total construction market. This is the category that includes banks, schools, office buildings, hotels, shopping malls, religious facilities, baseball stadiums, theaters, universities, amusement parks, hospitals, courthouses, government buildings, and other facilities where people gather. These projects may range in size from a small medical office to large high-rise office buildings to state-of-the-art biotechnology facilities. The building costs are significantly higher than with residential construction, and the project duration is much longer. It is not uncommon for a commercial project to last three years or more.
Funding for these types of building projects may be private, public, or combined in a special private-public partnership. Commercial construction companies are usually categorized by their dollar volume per year. For example, a company that does less than $10 million per year might be classified as a small commercial contractor, whereas a large commercial contractor completes more than $250 million of work annually. Of course, everything is relative to a given market. What might be considered a large company in Nebraska could easily be classified as a small company in California.
Commercial projects are very wide-ranging in scope, and it's difficult to develop expertise in all areas. For example, hospitals and clean rooms, which have very specialized systems, require contractors who possess the special knowledge needed to successfully perform the construction.
