You Saved $50K in Value Engineering But Risked $300K in Long-Term Costs?
In multifamily development, Value Engineering (VE) is essential for controlling budgets without compromising the project's appeal. The real challenge? Executing VE smartly so it doesn't undermine pre-leasing velocity or long-term resident retention.
As interior designers focused exclusively on clubhouse amenities and multifamily projects, we've seen first hand where cutting costs still delivered real value... and where shortcuts created disasters that far exceed any upfront gains. It’s heart-burning to say the least.
Here are three critical VE mistakes we've witnessed firsthand and how they can turn short-term wins into expensive problems:
The 'Bait-and-Switch' on High-Impact Finishes
Swapping statement pieces like lobby lighting fixtures or premium kitchen finishes for cheaper alternatives that dilute the property's premium feel. These elements drive first impressions and leasing decisions. Cutting here often slows pre-leasing and forces costly upgrades later.
Overlooking Long-Term Durability and Maintenance
Choosing materials that save 10-15% upfront but fail prematurely...think unit flooring that wears quickly or common-area seating that needs replacement in 3-5 years. The result? Higher operating costs, frustrated residents, and lower retention rates that erode NOI over time.
Not Fully Updating (or Following) the Final ID Construction Documents After the VE
The design team delivers a revised Interior Design Construction Document (ID CD) set. Too often, developers or GCs request VE changes but then proceed without strictly adhering to the updated set or without requesting a new one if further cuts are needed. This leads to field improvisations, change orders, hours in RFIs, and time overruns that negate the original savings. The true cost of poorly executed VE isn't just in dollars it's in rework, delays, reduced leasing performance, and diminished resident satisfaction. The last one might be the biggest risk. Google reviews can’t be removed but can be detrimental.
I’ve seen the horror shows first hand. It’s painful. Despite warning that there are 10 why’s for everything we specify unfortunately PM’s are only seeing 1. Without requesting the ID review the swap, they will find out the other 9 in the field.
The better approach? Trust the person you chose to invest in and who invested his/her heart in.
True collaboration.
Owners, contractors, and designers working together from the start ensure VE enhances value rather than eroding it. Designers bring deep insight into ROI...ours are just not in spreadsheets form.
Our insight into ROI comes from understanding the power that space has on people and passion for the purpose...enhancing user experience that truly make a difference.
VE in the Context of Multifamily Design Phases
Value engineering doesn't happen in a vacuum, even if it’s behind the scenes and not overt. It's woven through the 5 phases of the design process. In Schematic Design (Phase 2), we flag high-impact features like lobby lighting early to avoid bait-and-switch cuts that compromise the design. We are on-board knowing this is going to be great for the rendering, then later we will get the ‘look for less’
By Design Development (Phase 3), we're finding ways to make that high-end design maintain the vision without departing from the vision and those glorious 3D Renderings used in the marketing material.
Construction Documents (Phase 4) is where we're sometimes asked to update IDs for VE savings, dodging change-order nightmares down the line.
In Construction Administration (Phase 5), ask for another VE set if you need to trim further. This phase happens the least in our experience, but the install reveals the other ‘why’s’ behind our choices…and often says what you didn’t want to hear, like durability risks or field fixes.
the fireplace design
how it was VE’d without consulting the ID (me) 🫣
