Side Dish: March 2010

We architects and designers (mainly architects) like to moan and groan about how little we make. It's like a reflexive past time - out of things to talk about? Complain about the state of the profession! So here we go - food for thought.
You can think about how the architect gets paid in a couple of basic ways.

The basic private model: The architect (including all of the sub-consultants) usually make a fee that is somewhat relative to the overall construction budget. In the last 20 years, this has been greatly eroded. Making 7, 6, or even lower- 4 percent of the construction cost is common these days. One way of looking at this is, in the overall budget, you will pay your designer - the person responsible for the actual WHAT and HOW of what you're building - less than sales tax (in WA state 6.5% for construction). Ouch.

The basic public model: The architect will charge direct labor for the time it will take to do the work set out by the agency. On top of this we are allowed to charge an audited (real) overhead rate, plus fee (our profit). The hourly labor is kept low because in the end, the over-all number still is weighed against construction cost. So you can't pay your architects more than what most others are paying because that will drive you up in the percent of construction cost region. But if you just look at the fee - the amount of profit you are allowed to make, which varies by agency - you see that we are held to low profit margins - 10 percent is good, lately agencies have been requesting no more than 7.5%.

I like to think about what other professions think is reasonable. If you go to a restaurant, you are expected to TIP - this is on top of an hourly wage for services built into the menu price - 15-20 percent average. But if you are building a building, you only pay your server 7 or less percent.

No wonder we're disgruntled. Enough project management and sour grapes for today.

Look over here! A pretty building!