Q1

(P1)
Key Differences Between Residential, Commercial, and
Industrial Construction

Types of Residential Structures

Generally speaking, a residential structure is where people live. This includes:

 Single-family homes
 Condos
 Townhomes
 Cooperative Housing (Co-ops)
 Duplexes, Triplexes, and Fourplexes
 Smaller Apartment Complexes
 Individual Mobile Homes
 Tiny Homes
Types of Commercial Structures
Commercial structures are where some type of business operations take place. This includes:

 Office buildings
 Hospitals
 Restaurants
 Retail
 Large residential complexes

Types of Industrial Structures

Industrial structures are generally built for the manufacture, storage, or distribution of goods. This
includes:

 Manufacturing
 Warehouses
 Distribution Centers
 Flex Space Buildings
A flex space building accommodates multiple purposes. For example, live / work lofts. Although often
lumped in with commercial structures, there are some important differences between commercial and
industrial construction which we will describe in this article.

What’s Different?
There are 5 areas that differentiate residential, commercial, and industrial construction,
including:

 Site selection
 Permits & Regulations
 Speed of Delivery
 Worker Experience
 Cost

Site Selection
The site selected for construction depends in part on the type of structure. Residential lots
are generally smaller than what is required for commercial or industrial buildings.
Commercial and industrial structures may require large parcels of land. Commercial
buildings are often situated near residential areas – close to their target market of shoppers,
diners, and office workers. Industrial buildings are often built “off the beaten path.” Away
from areas where noise and pollution would be considered a nuisance. Where the site is
located and the people and structures surrounding it affect everything from equipment
selection to road access to availability of materials.

Permits & Regulations

The required permits and regulations for residential construction are typically handled at
the local level. That is also true for commercial and industrial construction – in addition to
meeting state and federal requirements. That makes commercial and industrial
construction projects more complex.

Speed of Delivery
The speed at which commercial and industrial buildings are constructed is normally faster
than residential construction. The stakes are much higher – and not meeting contractual
obligations are far more costly than coming in late on a residential project. Also, residential
construction projects typically have less workers onsite – sometimes being spread between
multiple projects. In addition to changes that are often more frequent with residential
customers, speed of delivery for residential construction tends to be slower.

Worker Experience
The size and scope of commercial and industrial construction projects often require higher-
skilled workers. Not only for the actual building of the structures, but also for project
managers. The type and size of equipment often requires experienced operators with a
proven track record on commercial and industrial construction sites. For these reasons,
overall labor costs are considerably higher compared to residential construction projects.
Cost
Residential construction is typically less expensive than commercial or industrial
construction. The regulations that govern commercial and industrial construction often
require expensive materials – such as steel framing and massive amounts of concrete.
HVAC, electrical, and plumbing systems are larger, more complex, and higher quality
materials are often used. As well, the site where industrial buildings are constructed may be
farther away – increasing transportation costs. Permits and adherence to regulations at
local, state, and federal levels can also be more expensive compared to residential
construction. Finally, both commercial and industrial construction often require higher
skilled workers, increasing labor costs compared to residential construction.

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