Commercial and Residential Construction Differences Explained
Commercial construction and residential construction vary in nearly every way from the building materials used to the equipment required, and even the way funding is secured.
The differences start with the way residential properties are used compared to commercial properties.
Residential refers to buildings that are designed to be lived in.
Residential includes:
- Single Family, Detached Homes
- Duplex, Triplex, Fourplex
- Townhouse
- Some housing co-operatives
- Condominiums
While Apartment Buildings are designed for residential use, large-scale apartment complexes are considered commercial property because space is leased out to others as part of a rental business.
A commercial facility is much more varied than a residential property. While residential properties are exclusively used for private living quarters, commercial refers to any property used for business operations.
Commercial refers to hospitals, assembly plants, storage warehouses, shopping centers, office spaces, or any other location for business owners.
Popular types of commercial space include the following:
- Land Investments
- Large-Scale Multifamily Housing
- Office Buildings
- Retail Stores
- Retail Warehouses
- Storage Units
- Industrial Buildings
- Manufacturing Facilities
- Storage Buildings
- Medical Clinics
Commercial and Residential properties have a wide variety of significant key differences including Building Materials, Codes, Cost, Construction Equipment, Energy Efficiency, and Construction time.
Read on to learn the nuances to both commercial and residential construction and how they can affect your current or future construction project.
Traditional Building Materials Used in Commercial vs. Residential
Every project requires certain materials to meet the demands of building design specifics.
In general, the materials used for residential construction are much different from those used in commercial buildings.
The average home uses timber frame construction because timber is considered the most cost-effective and structurally appropriate for smaller-sized and simple structure buildings.
Companies that specialize in residential construction are best-suited to complete traditional timber frame construction projects.
While some architecturally designed homes implement steel framing into construction, the average homeowner generally can’t afford to invest in a steel-frame home. 
Commercial construction projects have larger, more complex design phase requirements that demand different materials than the timber commonly used for residential properties.
Commercial steel buildings are a more popular choice because it is a more resilient material and allows for larger and taller buildings with greater longevity.
It is essential to consider the quality and rating of the commercial steel structures and the construction techniques that will be used before signing a contract.
Codes & Permitting
Commercial buildings have stricter regulations than residential. Both require adhering to specific codes, project requirements, and obtaining permits from the municipality in which the structure is being constructed.
However, commercial properties have different rules and regulations for:
- Building materials
- Building type
- Electrical systems
- Plumbing
- Construction process
- Design flexibility
- Building size
Construction management professionals for commercial projects are well-versed in the relevant local and federal building regulations that are necessary for commercial projects.
Additional standards are in place for commercial buildings to protect against safety concerns related to elevators, IT concerns, handicap accessibility, parking lots or parking garages and others.
Commercial codes and building permits are complex and require experienced professionals to ensure compliance.
While residential buildings also adhere to building process standards, these requirements are considered simpler and easier to comply with than commercial construction.
Significant Cost Differences
The building components costs for residential and commercial developments are vastly different, even for conventional buildings of comparable size. 
These cost differences stem not only from the materials and compliance standards explained above but also from costs related to overhead, labor, and equipment.
The number and quality of workers and the use of specialized equipment can drastically effect final project costs. Labor is often secured through a bidding process; the job goes to the lowest-price, capable bidder for completion.
In contrast, residential properties can rack up significant bills for overhead, labor, and equipment, but because residential construction is on a much smaller scale, these cost differences are rarely comparable.
Funding for commercial versus residential construction is completed using different protocols.
Commercial projects are often funded by:
- A corporation with bank financing
- A government agency
- A wealthy business owner or developer
The entity that funds the project will then hire a general contractor who manages the entire project and hires and schedules subcontractors using a competitive bidding process.
Residential projects are typically paid for by the homeowner using a bank loan.
In some cases, insurance loans or cash may be used to complete the purchase, or in the event of a natural disaster, the residential construction may be covered by a government agency, such as FEMA.
Residential construction projects are paid for with the following methods:
- Bank loan
- Insurance loan
- Cash
- Government Agency/Non-profit
Residential projects include extensive interaction between homeowners, contractors, and subcontractors. Work is often scheduled through referrals or marketing rather than bidding.
Required Equipment
The large-scale nature of commercial construction requires specialized equipment to complete most projects. Heavy machines including earth moving equipment and cranes are necessary to construct many commercial building designs. 
These machines must be operated by experienced professionals to ensure job safety and project quality.
While residential construction requires specialized skill, only the most extravagant houses demand industrial-scale construction equipment.
Furthermore, many elements in a residential construction project are undertaken by DIYers using advice from friends or How-To videos online with impressive results.
This would not be possible on a commercial project.
Mistakes and accidents that are made on residential projects are often much easier to remedy than those in commercial construction and don’t lead as easily to a lawsuit.
Project Deadlines
Time is money when it comes to quick construction; builders and owners want to complete the project as quickly as possible.
However, owing to higher construction costs and a more systematized workflow, commercial projects tend to move at a much faster pace than an average home builder.
For companies, faster construction means lower labor costs and a smaller financial investment in the overall project. This motivates commercial builders to work as quickly as possible.
Homeowners tend to make more decisions throughout their residential construction which adds time to the project. Construction teams for residential projects also have fewer workers and often work on multiple projects at one time which makes the build take longer.
These factors, combined with the more tedious nature of working with wood frames, makes for a longer overall project.
Choosing the Right Company for Your Construction Project
In general, commercial construction tends to be quicker than residential, but is more expensive and holds to stricter building codes. On the other hand, residential construction tends to take longer to complete than commercial, but is less complicated.
Wooden materials are a popular choice for residential construction and this type of construction demands less specialized equipment than commercial.
The construction company you choose to manage your large or small scale construction project should come highly recommended with a reliable track record of project success, customer satisfaction, and minimal maintenance.
If you are looking for a commercial construction company to manage and complete your large-scale project, CDMG is a reputable design group and a popular choice that is industry-famous for expedited design services that never cut corners.
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I'm Ben Sparhawk, the Content Writer and Marketing Account Manager for CDMG. I write to showcase the work that CDMG does and everything related to the pre-engineered metal building industry as well as their engineering capabilities. When I'm not working on content, you can find me spending time with my wife and children. You can also find me in the gym, trying to better myself, and I also enjoy spending time outdoors hiking or checking out local parks.