By Mike Kruse, President
Home Builders Association of Midwest Georgia

The days of the dark and dank basement, strewn with boxes, dusty exercise equipment and tangled holiday decorations are rapidly becoming a thing of the past, replaced instead by luxurious media and game rooms, European-style pub rooms, second kitchens, wet bars and guest rooms.

Homeowners by the droves are reinventing their formerly stodgy basements in search of more livable living space and are finding that basements are just too valuable to leave rough and unfinished.

According to the National Association of Home Builders Research Director Gopal Ahluwalia, creating an "upscale downstairs" is a burgeoning trend. Among new-home buyers, he said, "the two things they want to do immediately are install a deck and finish the basement."

So while basements are not the top remodeled space — kitchens and baths remain the leaders — they are a sizeable chuck of the $215 billion U.S. remodeling industry. Not bad when you take into account that only 68 percent of all U.S. homes even have basements.

• Half the hassle, lower the cost. Remodelers conclude that economics, psychology and land restrictions are some of the reasons why basements are achieving a higher remodeling profile. Finishing a basement usually costs about half of what upstairs improvements run, and basement remodeling is unlikely to trigger the regulatory dance or neighborhood fuss of a building addition.

Prices for lower-level remodeling can start at about $15,000-20,000 for basic drywall, wiring, and paint and carpet, depending on the square footage. For contractors who oversee the entire project, prices typically begin at $20-25 a square foot. From there, prices can swell into the six figures based on the complexity of the job.

"We have noticed an increase in lower level remodeling—most homes in our area have a full unfinished basement—and an increase in the total dollar amount spent by our customers," said Robert De Haan, of De Haan Remodeling Specialists, Inc. of Kalamazoo, Mich. The average cost of his last three basement projects has been $51,000.

• Reclaiming and taming basement space. Now that more homeowners realize the potential for their basements, stylishly referred to as the "lower level," the design opportunities appear to be endless.

"If the level of finish (comprising thoughtful and creative design, quality materials and top-notch craftsmanship) is equal to, or exceeds, the level of finish on the existing main levels of the home, this space is no longer considered ‘second class,’" said Stephen M. Schmitt CGR, of Timberline Custom Homes, Inc. in Highland, N.Y. "Clients often are willing to spend whatever it takes to do the job right."

"The uses for this space are as varied as the families seeking to remodel," Schmitt noted. "Often the project is initially thought of as a playroom for the kids, but once the clients see the possibilities and get a feel for the finished product, they find ways to reclaim the space for themselves and keep the kids upstairs."

Another remodeler notes he’s reinvented large, extravagant basements, complete with stone fireplaces, full kitchens, hot tubs, full baths and steam areas, and lower-level transformations for growing families that wanted fun, color-filled basements with amenities like built-in forts and slides.

While fun and innovative, many of the latest trends may be out of reach or over-the-top for the average homeowner looking to spruce up and use their basement space. The lower-level amenities consumers generally focus on include drywall ceilings with recessed lighting, home entertainment systems and interior design elements such as sofa sectionals, silk window treatments, crush-proof carpet and brighter wall colors.

• Pricing your vision. While the possibilities may seem limitless when renovating the lower-level space, so can costs, depending on the original structure. Remodeling-happy homeowners need to consider the design options carefully.

A basement project does not require an increase in the building’s footprint, thus saving on building elements such as footings, roof systems, floor systems and ceiling systems. But, potential savings can be easily offset if the scope of work includes a new bathroom, wet bar or the relocation of mechanical systems or the laundry to a new space that hasn’t been roughed in.

Further, building codes can have significant requirements for basement living spaces, including a second egress for the living area and for each bedroom. Other considerations may include ensuring enough property easement to allow for an adequate well and including the required smoke detectors.

Despite the costs incurred and a relatively poor return on investment, the cost of finishing a basement ranks among the lowest of the major home improvements with a national average return of just $.79 on the dollar, according to Remodeling Magazine's 2003 Cost vs. Value report, with strong new-home sales and starts, there appears to be no sign of this trend slowing in the future.

(Mike Kruse, who is owner and president of Mike Kruse Contractors Inc., is president of the Home Builders Association of Midwest Georgia, which serves a membership of approximately 615 builders and associate members in Fayette, Coweta, Spalding, Meriwether, Heard, Pike, Upson, Lamar, Butts and Jasper counties.)