Deconstruction vs. Demolition; 4 Primary Benefits
When a business and/or homeowner decides to rebuild or remodel an existing structure, they want to finish the project as soon as possible and at the lowest cost. At first glance, it seems easier and quicker to demolish the building. After all, demolition is the most common method employed today to clear a piece of land leaving a clean, buildable lot.
However, there is a better, more cost effective alternative. This alternative is called deconstruction. Deconstruction is a process of carefully dis-assembling a structure so that the material used during the initial construction can be repurposed and given a second life. Benefits to the community and the owner of the deconstructed building are realized when the salvaged materials are donated to a non-profit organization.
1. Giving salvaged building materials a second life.
According to Maura McCarthy of BluHomes, 75-90% of the materials in a home can be reused, repurposed or recycled. In other words, property owners can save of the most items within a residential home or a commercial building. Here is a partial list of some of the items that can be carefully removed and given a second life, below:
- Copper wiring
- Kitchen cabinets
- Appliance packages
- Bath tubs and sinks
- Roof rafters
- Floor joists
- Flooring (hardwood, tile, marble, etc.)
- Plumbing fixtures
- Bathroom vanities
- Heating and air conditioning systems
- Exterior and interior doors
- Fireplace mantles
- Other architectural significant details
Demolition may appear at first to have a small time advantage. However the time variance can be reduced to almost nil by starting to deconstruct the interior while waiting on permits. Plus with demolition, many salvageable furnishings are lost forever and buried somewhere in a landfill instead.
2. Deconstruction makes us better stewards of the natural resources of our planet.
Every time a demolition company razes a structure, it sends all the building material and debris to a landfill. According to the EPA, 534 million tons of construction and demolition (or C&D) materials were sent to landfills in 2014. That figure is twice as much as the amount of municipal solid waste (or regular garbage) that went to landfills in the same year.
By utilizing the process of deconstruction in lieu of demolition, 75 to 90% of the used building materials are diverted from our landfills. By diverting some of the waste going to our landfills, in addition to giving that material a second life we are also extending the life of our landfills and creating jobs. In 2007, the recycling industry created over 230,000 jobs.
How are the salvaged materials from a deconstructed property reused? The answer to that question lies in the next section.
3. Donating salvaged building materials provides financial support to a non-profit organization.
Many people are curious and have asked us who will use their donated deconstructed materials and how. This financial support for organizations that help the less fortunate in our communities is crucial to their long term success. Non-profit organizations decide whether to resell the donated items or use them for a community project.
Habitat for Humanity is one such non-profit organization that takes advantage of donated deconstructed building materials. In fact, many of Habitat for Humanity ReStores offer a variety of deconstruction services. When Habitat for Humanity deconstructs a property, it removes most used building materials, furnishings and other goods at no charge or at a nominal charge to the owner making the donation. ReStores typically sell these items. The people who buy the items save considerable amounts of money. Instead of paying full retail price for new items, Habitat sells their donated items at a fraction of the retail price.
The proceeds from the sale of those items help build new housing for pre-screened and pre-approved local residents.
4. Deconstruction has significant tax benefits for the donor whereas demolition does not and is a dead expense.
The IRS requires a specific type of appraisal prepared by a Qualified Appraiser before the donor can take advantage of the tax benefits available through the Non-Cash Charitable Contribution program. Preparation of the documentation required by the IRS has multiple well defined steps. First, the scope of work for the project is discussed with the owner. Then, an appraiser physically inspects the property. After, the appraiser determines the fair market value of the donated salvaged building materials. That is a very brief outline.
There are additional requirements, but typically the donor is able to reduce his/her taxable income by the full fair market value thereby reducing his/her tax liability. If the donor is unable to use the full deduction in one calendar year, the IRS does allow the donor to carry the deduction forward for a period not to exceed five years.
We have provided a chart below of actual deconstruction and demolition costs/tax benefits.
Deconstruction Firm Demolition
Leveling of 2,098 sq ft home $35,000 $15,000
Disposal of wreckage $0 $3,600
Total Costs $35,000 $18,600
Value of Donated Materials $171,300 $0
Actual Cash Benefit from donated materials* $68,520 $0
Net benefit to owner* $33,520 -$18,600
*Assuming 40% tax bracket between Federal and State taxes. Net benefit to owner is the Actual Cash Benefit minus the cost of deconstruction.
Now that you can see all the benefits deconstruction has vs. demolition, it is time to put those benefits to work for you.
Contact us today for a free no obligation consultation with Green Donation Consultants to see how Deconstruction can benefit your project!
No one else has the depth or level of experience we have in front of the IRS for this specific type of donation. Don’t roll the dice and play the Audit Lottery by using a less experienced and less qualified firm! Go with the team with the proven track record, Green Donation Consultants!