Impact of Life Cycle Costing of Roofing Materials on Condo Reserve Funds

The Condominium act has greatly changed the way condo boards should look at choosing a roofing product. Tile has a high perceived value due to great aesthetics, which increases unit re-sale value. Air conditioning energy savings and improved comfort level, (due to the under-tile double roof rain screen venting system), and very minimal maintenance costs also add value that only a tile roof can deliver. But the greatest tile advantage for condominiums especially, is the life cycle costing advantage. This greatly impacts the true re-roofing cost as is explained below.Example: Typical costing for a 1500 sq. (150,000 sq. ft.) Condominium re-roofing project.

Initial costs:

High End asphalt shingle (50 year pro-rated warranty) (25 year service life expectancy) with typical upgrades to drip edge, eave and valley protection materials, underlayment etc ………………………………$500 per sq…………………………………………….… $750,000

Low End Cedar Shakes (#1 Medium) (20 year pro-rated warranty) (15 to 20 year service life history) with similar upgrades as listed above………….…….$650 per sq….….……..…$975,000

High End Cedar Shakes (100% Edge grain Select/premium Heavies) (30 yr. Pro-rated warranty) (25 to 30 year service life history) with similar upgrades as listed above …………………….……..…$750 per sq.…………………………………………….$1,125,000

Unicrete Lightweight Concrete Roof Tile (50 year non- pro- rated warranty) (60 to 80 year service life history) with all upgrades as above plus a complete double roof cooling system, higher quality roof deck membrane, extra flashings, etc…… $750 per sq……………$1,125,000

Unicrete Estate Concrete Roof Tile (50 year non- pro- rated warranty) (60 to 80 year service life history) with all upgrades as above plus a complete double roof cooling system, higher quality roof deck membrane, extra flashings etc………..……$600 per sq………….….$900,000

Additional Reserve Fund Yearly Contributions

The initial capital cost has been made and the new roof system is in place; the Condominium Act requires that you begin saving towards a new roof system once it is within 25 years of being needed. This is where a Unicrete Concrete Roof Tile system really starts to become your most economical choice. The huge impact that the roof material historical service life rating has on the reserve fund, is the key to determining the true cost of the roof. To obtain the cost per year that needs to go into the reserve fund, the cost of the next roof has been assumed to be the same cost as the original roof. This is very conservative, as history has shown that roof price inflation is in fact far higher than general inflation, and will likely be rising even more in the coming years due to labour shortages, material price increases (especially with oil based products), increased insurance and safety regulation costs, etc.

High End Asphalt Shingles–$750,000 over 25 years = $30,000 per year into reserve fund.

Low End Cedar Shakes – $975,000 over 20 years = $48,750 per year into reserve fund.

High End Cedar Shakes – $1,125,000 over 25 years = $45,000 per year into reserve fund

Unicrete Lightweight Roof TileNo fee for first 25 years

Unicrete Estate TileNo fee for first 25 years

By year 11 you will have paid more for the asphalt roof than the tile roof.

By year 4 you will have paid more for the #1 medium cedar roof than the tile roof.

Even with the least expensive roof material, High End Asphalt Shingles, the extra $30,000 minimum per year that would need to go into the reserve fund for the next roofing cycle would mean that by year 11 the price would end up being the same for using Unicrete lightweight tile or for high end asphalt. From this point on it actually gets much more expensive for the condominium complex to have an asphalt shingle roof – compared to a Unicrete tile roof. By the time the 25 year reserve fund window comes into play for Unicrete tile, and you need to start saving towards the next roof, the shingle roof will have cost $450,000 more than the tile roof.

Even though a reserve fund planner will likely only give a 50 year rating for a tile roof, historical experience has shown that tiles will still look very good after 50 years. Concrete roof tiles have a proven historical record of lasting more than 80 years. For the last 30 years or so, tiles have been pressure extruded to be much denser, and are expected to last much longer than the presently existing 80 to 100 year old concrete tile roofs. Any colour is now possible as well.

Actual expected service life as given by a reserve fund planner or roofing expert, for any asphalt product will typically be between 15 and 25 years. This is due to the fact that no asphalt or fiberglass shingle has ever historically lasted even 25 years. The 50 year warranty products have been around less than 8 years, and the 30 and 40 year products a little over 12 years. Until an actual historical service life is proven, it is unlikely that more than 25 years will be given to any of these products by knowledgeable professionals when assessing the service life spans. The asphalt warranties themselves demonstrate that the manufacturers expect the service life of the product to be less than the warranty period. This is sometimes stated explicitly as with the “Elk” warranty document; “NO LIMITED WARRANTY ASSURES THAT THE COVERED PRODUCTS WILL LAST THE ENTIRE LIFE OF THE APPLICABLE WARRANTY PERIOD.” (Capitalization in the warranty document) Warranty pro-rating formulas with most asphalt shingle manufacturers, are structured so that there is far less than ½ the original cost left in the warranty at the actual ½ way point of the warranty – when you are most likely to need it.

This lack of historically established service life is also a very important consideration when assessing the many plastic, rubber, and other new roofing product materials now being offered. A 50 year warranty period can not be considered of much value if a product has only been in existence for less than 10 years. This was demonstrated graphically here in Alberta by the pine shake fiasco, when the 25 year warranted pine failed by year 10. If choosing a product that has been in existence for less time than its warranty period, you are part of the experiment!

Cedar does have historical evidence and it clearly demonstrates that by year 15, #1 medium cedar will need extensive repairs and shimming, and by year 20, replacement will be required. 100% edge grain, Select heavy shakes should last between 20 and 30 years, depending upon the age and quality of the cedar tree they were cut from.

The resale value of the individual condominium units will be far greater with a tile roof than with an asphalt or wood roof, and this difference will become more pronounced as time goes on, as there is very little drop in the appearance or perceived value of a tile roof due to age. All other

roofing products experience a great decrease in value as they age. The aesthetics and reputation of roof tile gives a substantial boost to the appraised value of each individual unit. In the 2005 edition of the Marshall & Swift “Residential Cost Handbook” – the main reference manual used by appraisers – an increase in value of $4.20 (US $’s) per sq. ft. for a town house or duplex in excellent shape with wood shakes is listed, if the roofing material were upgraded to tile. They also give a loss of value of – $1.53 (US $’s) per sq. ft. if shingles were used to re-roof.

(See page below from manual). This means that for a 1500 sq. ft. unit, the increase in value – if replacing wood with tile -would be $7500 (Canadian $’s ; .84 exchange rate). The same unit would be worth – $1800 less if replacing wood with asphalt. This figure was verified locally in September of 2005, when the Brier Park Estates Roofing committee hired an independent appraiser (Joseph Massey of Floen and Sloan Appraisals) to do a summery appraisal report for their 60 unit condominium project. His report indicated that a Unicrete tile re-roof would allow the recovery of an estimated $10,000 of the roofing costs upon resale of the unit, whereas an asphalt roof would not allow for any recovery of costs. This clearly demonstrates that choosing Unicrete roof tile enables you to convert a re-roofing expense into an investment!

 

For further information, or if you would like to book a presentation on condominium re-roofing options for your roofing committee, condo board or annual /special meeting, please contact me.

Brent Applegate (Technical Manager) 2007