Which of the following is not a major cost category in a development budget?

• A. Vertical building costs
• B. Land acquisition
• C. Hard costs
• D. Soft costs

Answer: (A)

In development budgeting, costs are typically grouped into land, hard costs, and soft costs. Vertical building costs are the actual construction expenses for erecting the building, which fall under hard costs. They’re not a separate major category; they’re a component of hard costs. Land acquisition is a major category because it covers the purchase and closing on the site. Soft costs are also a major category, encompassing fees for architecture, engineering, legal, permits, and financing. So the option representing vertical building costs isn’t a distinct major category, it’s part of hard costs.