Soft Costs
Soft costs are non-physical costs associated with effecting a project and often its financing/refinancing, such as legal, organizational, consulting, and other similar costs; federal regulations provide an example definition in a HUD-linked program context. In development budgeting practice, soft costs commonly include design/professional fees, permits, studies, and certain carrying/financing expenses depending on the accounting framework.
- Where it applies
- Generally, not specific to New York
- When it comes up
- Budgeting; entitlements; design; construction
- Property types
- All
In practice
Soft costs are schedule-sensitive: longer entitlement timelines typically expand soft cost exposure through carrying costs and repeated design cycles.
Related terms
Construction Terminology
- Change Order
- Construction Management at Risk (CMAR / CM@Risk)
- Design-Bid-Build
- Design-Build
- Guaranteed Maximum Price (GMP)
- Hard Costs
- Lump Sum
- Punch List
- Shop Drawings
- Submittals
General information, not legal, tax or financial advice.