What Is The Difference Between Residential & Commercial Construction?

Residential and commercial projects serve different purposes and have very different project scopes.  Mainly, the difference between residential & commercial construction projects is what purpose the final building will serve. What Is The Difference Between Residential & Commercial Construction Residential building construction is done for buildings meant to be lived in. So, apartments and individual houses are considered residential constructions. Residential construction includes: – houses, – townhouses, – condominiums, – duplexes, etc. Commercial buildings are used for business purposes. Large-scale living complexes and privately owned public spaces are examples of commercial constructions. ->Commercial construction includes:  – hospitals, – shopping complexes, – office locations, – warehouses, etc. Yet, the truth is that residential and commercial construction can be very different. There are critical differences between them that extend beyond their use. This includes differences in the sales process, materials and equipment used, the project timeline and scope, the way projects are funded, the codes and permits needed, and even planning the buildings in the first place.  So, let’s jump right into the difference between residential and commercial construction.

Commercial and Residential Construction Differences Explained

End Project Results

The clearest difference between these two is their intended purpose. Residential construction companies make spaces for people to live in. Commercial construction companies make business spaces. The only place where this line blurs is in the realm of apartment construction. For the most part, this is considered commercial, as it’s a space intended to host the business of renting out places to live.  

Permits and Codes

Any construction process requires the following: – Prior permission from the concerned local bodies. Construction can only begin when issued a permit from the state is. – A specific set of codes for that particular construction type. Construction codes are different for residential to commercial properties. Besides, the construction of commercial buildings has stricter regulations than residential ones.  This way, the project proceeds without endangering anybody’s life during or after the building’s construction. Industrial buildings are usually more significant projects than residential ones. This makes them more dangerous, mainly if heavy machinery is used. Because of this, extra standards are in place for commercial buildings. These standards protect constructors against safety concerns related to the following: – elevators, – information technology, – handicap accessibility, – parking lots or parking garages, and others.  

Building Materials

In the United States, the average home uses timber frame construction. Timber is considered the most cost-effective and structurally appropriate for smaller-sized buildings. Wood is also sturdy. Commercial construction projects have design requirements that are larger and more complex. Commercial properties are usually built from cement and steel frames. Concrete and steel are much sturdier than wood.  These materials give commercial buildings longer lifespans and make them much safer. This allows for more extensive and taller buildings. This is especially important if the building is going to be used as a warehouse or factory. Steel-slope roofing materials are most common for homes. Commercial structures are usually constructed with low-slope roofing materials.  Even materials that are used in both types of construction tend to be used differently. For example, glass is generally reserved for small windows in residential construction. Many modern commercial buildings use significant architectural elements like monumental glass facades. The scale of materials required is also massive. For example, a home’s foundation may have 200 tons of concrete. A skyscraper could contain 200,000 tons of concrete or more. While there is some crossover between materials used for residential and commercial buildings, the only hard rule is that the material has to support the design.  There is also a difference in the quality and grade of material. For instance, industrial and commercial steels come in a wide range of grades that are used for different purposes.  

Equipment Used

The equipment used in the construction of residential and commercial properties is different because of the different materials that are used.  

Commercial Construction

The large-scale nature of commercial construction requires specialized equipment to complete most projects.  Commercial projects often need high-powered machinery and specialist equipment to perform complex tasks. A commercial construction project usually requires cranes, lifts, loaders, and pavers, among others. Commercial and residential projects hire different contractors and equipment specialists. This is because commercial construction is specialized and potentially dangerous.  Experienced professionals must operate machines to ensure job safety and project quality. It’s also important to note that commercial sites are more liable to massive lawsuits if things go wrong. Commercial construction sites tend to have extra costs because of the specialist workforce and machinery.  

Residential Construction

Some residential construction requires specialized skills. But only the most extravagant houses demand industrial-scale construction equipment. Even the largest house rarely needs a crane. For commercial projects, crane operators are required. For residential properties, carpenters and stonemasons are often required. Furthermore, many elements in a residential construction project are undertaken by DIYers or self-builds by the owners.  DIY saves costs on hiring a workforce and machinery. If these DIY projects go wrong, they can solve them relatively quickly because of their smaller scale. Mistakes and accidents on residential projects are often easier to remedy than those in commercial construction and don’t often lead to a lawsuit. Bottom line: Both residential and commercial projects need specialized equipment. But commercial equipment tends to be more extensive and more costly.  

Construction Site

The site selected for construction depends in part on the type of structure. Where homes tend to be bundled in close quarters, commercial buildings are often situated near residential areas. Usually close to their target market of shoppers, diners, and office workers.  This affects every stage of construction. Residential contractors must be mindful that their workers and equipment don’t affect neighbors. They can’t start working early due to noise complaints. Contractors must also consider how equipment and materials will move in and out of the construction without disrupting nearby buildings.  Because of the risk of theft, commercial projects may involve elaborate security systems, including fences, cameras, or guards. Commercial projects located in commercial corridors also involve lengthy environmental reviews.  

Completion Time

Commercial Projects

Generally, commercial construction companies adhere to much stricter deadlines than residential ones. Because commercial construction projects tend to be more extensive and more complicated than a home, they take a bit longer to complete. As a result, labor costs rise exponentially when a project doesn’t stay on schedule.  Yet, the faster a commercial project is completed, the more cost-effective the build. A quick turnaround means lower labor costs. 

Residential projects

Residential sites operate much slower and use less efficient equipment than commercial ones. As such, residential homes often take longer to complete than commercial projects that are far larger.  This is usually because fewer workers are employed on the job and the property owner may make decisions as they go along or change their minds often through the process.

Building Costs

The differences in costs between commercial and residential properties can be huge. These cost differences stem from the materials, the number and quality of workers, and the use of specialized equipment. Stricter timelines in commercial construction applications also lead to higher costs.   Commercial projects also tend to be more expensive, just because of the scale. Sometimes, even the permit regulations can be more expensive. 


At first glance, residential and commercial projects have similarities. After all, both involve building structures with common features. Yet, the truth is that residential and commercial construction can be very different from start to finish, from the materials and equipment used to the project timeline and scope.