It may seem as simple as “People live in residential properties and they work in
commercial properties.” However, the differences between these two types of
construction are far more varied than simple usage. From materials to laws to
equipment needed to build, there are several differences between residential and
Construction is never a one-size-fits-all concept, and believing it to be so can lead to
one headache after another. Whether you are building new construction or getting
involved in construction management, understanding the differences between
commercial and residential can help keep you on the right path.
Below is an outline of how the residential and commercial industries differ in
The Law of it All
Before you can begin a project, you must contact the municipality wherein the
building will be located in order to obtain the correct codes and permits required for
the project, whether it’s a commercial or residential venture. Legality and safety are
important factors which must be addressed, regardless of the project type.
One difference between residential and commercial construction is that residential
construction requires far fewer permits and codes. Commercial construction has
more varied elements in the building’s makeup than residential, so there are more
codes and permits connected to it. In a commercial building’s infrastructure, there are
several aspects to keep in mind: development of parking garage or large lots; safety
factors, like elevator certificates; additional electric requirements; and technological
needs like more wiring for more internet.
Overall, commercial construction projects are more complex regarding codes and
permits because the buildings themselves must take into account much more than a
residential project. The restrictions on commercial construction include materials,
construction techniques, electrical systems, plumbing, and even size. While residential
buildings do need to adhere to the building standards, these are usually easier and
simpler to stick to in comparison to commercial projects.
Focus and Function
Obviously, residential and commercial construction projects focus on different things.
Still, it doesn’t hurt to outline the differences for this list. Residential construction
typically refers to the building of a single or multi-family homes, townhouses,
condominiums, and some other housing co-operatives. Apartment buildings are
designed to be residential, but they are considered commercial because the space is
leased out to multiple people as part of a business. See? It’s not as cut and dry as some
Commercial construction is far more varied that residential. Hospitals, assembly
plants, office buildings, warehouses, retail space, and any other property used for
business activities (as opposed to personal living), all fall under the umbrella of
Something often overlooked is a commercial builder’s need to keep in mind the
potential of constructing for several businesses occupying the same building. The
residential builder constructing a single-family home or apartment structure need
only concern themselves with building for one client type.
It’s What’s Inside
The materials used for a commercial vs. residential construction project vary only
slightly. Typically, commercial buildings are structured with steel framing. Steel is
strong, resilient, and allows for taller and larger buildings. However, due to the
extreme cost of a steel frame, most homeowners cannot afford that material and opt
for wood. Wood is cost-effective and structurally sound for smaller buildings.
Because of the size of most commercial construction projects, it is important for
builders to have a quality relationship with suppliers to maintain strict scheduling and
delivery of materials. Hiccups in the supply chain can cause financial issues as well as
scheduling setbacks for builders.
Commercial construction is large-scale. As such, heavy machinery for bulldozing,
moving earth, and lifting very heavy materials are required for a commercial
construction project. These cranes and other large machines need to be operated by
experienced professionals to ensure project safety and quality. Residential projects do
not require such large-scale work, and specialized skill sets are typically only required
on the most extravagant homes.
With residential construction, DIY and online How-To videos are often sufficient in
providing guidance for completing smaller projects. That would simply not be possible
on a commercial project. Any small mistakes or accidents made on a residential
property are generally much less difficult to fix, and they often don’t end as frequently
Getting it Done
As with any project, time is money. However, this statement rings even more true for a
commercial construction project, and the owners and builders on a project usually
want the project completed as quickly as possible. Labor costs and financial
investments are much lower on projects which take a shorter amount of time. So, a
more systemized workflow, larger financial investments, and higher expectations from
the client all help commercial projects move much faster than residential ones.
Homeowners are not usually in a rush to complete a project, so they have the freedom
to make more decisions throughout the process, adding to the overall length of the
construction project. Fewer workers on residential construction teams (who often
have multiple jobs to work on at once), as well as the tedium of working with wood
frames, often make for longer project times for residential construction.
Footing the Bill
From materials to labor to maintaining compliance, the cost of residential and
commercial construction projects can be vastly different, even for projects of similar
size. This is one reason why commercial projects are often funded by a corporation
with bank financing, government agencies, or wealthy developers and residential
projects are paid for by the individual homeowner. Homeowners can use cash or bank
loans to fund projects, but sometimes (in the event of a natural disaster, for example)
insurance or a government agency like FEMA will cover the costs.
On commercial projects, the entity that funds the project will hire a general contractor
who will manage the entire project and hire subcontractors through a competitive
bidding process. Residential projects, however, often schedule the work of contractors
and subcontractors through referrals or marketing, not bidding.
Overall, there are many differences between commercial and residential construction
projects. Commercial projects move quickly, with more funding and larger work
crews. However, residential projects are less complicated, don’t require such large
machinery, and generally cost less in the end.
Do you have a commercial building project in Terre Haute or the Wabash Valley?
Contact Hannig Construction, Inc. today and a representative will reach out to you