Basement Boom

Below-grade projects can produce results that are a cut above

August 31, 2004


Rhino Builders has seen a 30 percent increase in basement leads, resulting in a 20 percent increase in the company's number of basement jobs. Most of the company's basement projects start at $25,000 and include bedrooms for guests or older children; many include a bar and kitchen and open onto the outdoors.

When homeowners look for more living space, sometimes the answer is right under their nose - underground, to be exact. Increasingly, more remodelers are converting basements into luxe home theaters, functional home offices, additional bedroom space for kids or live-in in-laws, or fitness centers.

The Census Bureau doesn't track statistics on basement remodeling, but in NAHB's 2001 book, What 21st Century Homebuyers Want (based on a survey of the same name), 54 percent of the 1,180 consumers who responded said they wanted a full basement in a new home.

The inherent advantage in finishing basements? Not having to build up or out to gain space. Saving the time required to research zoning requirements - and go through sometimes convoluted permitting processes to build an addition - benefits contractor and homeowner alike. Terry Skilling, president of Rhino Builders in Kansas City, Kan., says the consumer cost savings of finishing a basement instead of building an addition can be up to 75 percent. A $2.2 million full-service remodeling firm, Rhino does about 20 basements each year.

In a market with a fair amount of new home building activity, locating potential projects can be quite easy. Skilling and Bob Lehner - president of Lehner, Brunton & Associates, a $1.1 million full-service remodeler in Warrenville, Ill. - both do most of their basement jobs in homes no older than 15 years. New home builders don't finish the basement because it's not advantageous to their production cycles, and buyers often can't put down that much money at once. After a few years, homeowners have built more equity in their home and can afford to finish the basement - an attractive option because they can usually gain from 800 to 1,000 square feet of living space, three-quarters of which they may have previously used only for what Skilling calls "really expensive storage." Finishing the space also can make the home more energy efficient, while cutting down on noise transfer to the rest of the home.


The Basement Remodeling Opportunity
New single-family detached homes with full basements
New single-family detached homes w/ other basements
New single-family homes with some portion of basement finished
New single-family homes with some portion of basement finished
Source: NAHB's Builder Practices Reports
Bob Lehner says that when it comes to basement cabinetry, being off by a half-inch can really hurt you. On average, his crews do 20 percent of the necessary casework on site. He hides cable leads in walls and bookshelves to retain clean walls, and this entertainment system is part of a complete home automation system that controls all basement functioning with one remote control. In addition, when it comes to finishing and furnishing spaces, he often encourages customers to think about modular items - moving away from large screen projectors, for instance - since the steepness of tight corners and steeps can restrict the size of materials workers can bring into a non-walkout basement.

Remodelers often start with an essentially clean slate in terms of layout possibilities, yet there are still a unique set of challenges and circumstances in doing basement work. Common obstacles are plumbing stacks in inconvenient places or a drain stack that exits from the basement wall rather than going below grade. In either instance, concrete work may be required to give the homeowners the layout they desire. If the home is older, there may be some moisture issues. While all interviewees said they will not work in a space that's severely compromised with respect to moisture or its foundation, a basement with moderate moisture issues may simply require increased attention regarding insulation and moisture membrane. Lehner estimates that addressing such issues can increase a job's associated labor costs by 15 to 30 percent; yet, in many cases, this charge still may be less expensive than doing an addition.

"The cost isn't prohibitive," says Lehner, whose business has seen a 20 percent increase in its basement leads. Such jobs now represent 15 to 20 percent of the 200 jobs his company does annually. "There are obstacles, but we have a good idea of how to get around them." Among these resourceful solutions are creating soffit walls for the necessary electrical hook-ups, rather than running them across the ceiling and decreasing already limited ceiling height. Also, turning unmovable structural posts into either fluted columns or built-ins for books and knick-knacks, or turning the column into a chase to run wiring for a home entertainment system.

Scott Keegan, owner of CKH Industries in New Windsor, N.Y., became an Owens Corning Basement Finishing System franchisee in January 2003. He was motivated after observing an increase in requests for basement work outside of his company, which specializes in window, siding and door replacement. His franchise currently gives him access to basement jobs in four states: Connecticut, New Jersey, New York and Pennsylvania.

"After so many years in the home-improvement business, I never thought there was a market in the basement, but then I saw the volume of sale and how it mirrors what we already do in terms of presenting ideas to the homeowner. In my first year, my franchise doubled the size of our company."

Pricing his jobs anywhere from $30 to $75 per square foot, Keegan says his average job size is 600 square feet of finished space, although they can range from as small as 200 to almost 2,000 square feet. As most of his clients usually earmark the area as a children's play den or for multi-purpose recreation, he notes that the basement panels' 0.95 noise reduction coefficient is especially appealing. He lauds the Owens Corning product, saying that the steel studding deters mold growth, and the panels are easy to retrofit in older basements. Given their flexibility, they maintain a competitive edge over sheetrock, paneling and drywall.


Owen Corning's pre-fabricated panels allow remodelers to do basement jobs fast; Scott Keegan averages around 7 to 10 days per project. He currently tracks about 60 leads per month, which translates into a steady, rapid stream of income that supplements his company, CKH Industries.

Upscale options: kitchens, theaters and steam showers

But the real appeal of basement remodels may be the possibilities for creating living space that blends seamlessly with the floors above. While variety in material choice - from detailed edging on ceiling panels to ironwork that ranges from decorative to functional - expands the possibilities for finishing materials, both Lehner and Skilling say there really is "no limit" to what you can choose for a basement. Studying the trim and moldings throughout the upper levels allows crews to mimic the form below. Aesthetically, the inclination is to stray away from dropped ceilings, given the reduction in ceiling height. However, Lehner says a dropped ceiling is often the best option when doing home offices, so cable can be accessed, up-dated or expanded as needed.

To really give basements the upstairs treatment, Skilling says lighting schemes are essential. Therefore, the electrical wiring must be able to accommodate the load. He says in certain jobs, the labor for electricians alone can be $4,000 to $5,000, especially when there's a request to add a fireplace or a full kitchen.

"I've done basements that are sometimes nicer than the upstairs," he says, pointing to the use of custom woods and stones, along with the installation of luxurious steam showers, state-of-the-art home theatres and customized bar systems with wine cellars. "Basement is no longer the word to describe this space: It's the lower level."

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