Is it More Cost Effective to Build Up or Build Out?

I received a question from a reader of He asked: “Does it cost more to build two stories vs one story?

The answer is that it really isn’t that simple. A two story house should cost less for these simple reasons:

Land Cost. If land is fairly expensive then going up will allow you to fit on a smaller lot and save money on land cost.

Less Material. You have a similar amount of wall and floor but you save on roof. Your plumbing, ductwork and electrical runs will also be shorter.

However, there are other factors that come into play and sometimes offset the two story house’s benefits:

Familiarity. I grew up in a city where almost every house was a single story with no basement. In that case there will likely be a premium for doing a multi-story home.

Complexity. Multistory homes that do not stack well may create a complex structure and envelope that will cost more.

Stairs. In order to have the same amount of livable square footage, the multistory house will be larger with the addition of a staircase, probably 55-80 sf on each level. On a smaller home that really adds to the size.

The best answer that I have is to give me more specifics on your project and I can help you make the right decision for your project.


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