Key Differences Between Commercial Construction and Residential Construction

Commercial and residential buildings make up two very different types of construction. From how they are constructed, to the way they are regulated, there are many differences in building techniques. 

Hiring the right people for the job makes all the difference. In order to make the most informed decision, you need to differentiate between commercial construction and residential construction so you can be confident in who you hire. 

While there are similarities in skill set for both commercial construction and residential construction, each type of construction has different methods and specialties. 

Here are some of the key differences between commercial construction and residential construction: 


Commercial construction typically is larger in scale and serves more people than residential construction.  

Commercial construction includes: 

  • Land investments 
  • Office buildings 
  • Large scale multi-family structures 
  • Storage units 
  • Retail spaces 
  • Industrial buildings 

Residential construction is generally built for individuals and families. 

Residential construction includes: 

  • Single families 
  • Detached homes 
  • Condos 
  • Townhouses 
  • Triplex/duplex
  • Housing cooperatives

Codes & Permits

All construction requires adhering to specific building codes and getting proper permits. Commercial construction has additional codes and permits because of the many complexities of the building. 

To meet all of the safety requirements, commercial construction has pre-set guidelines regarding:

  • Electrical 
  • Plumbing 
  • Size 
  • Design
  • Materials 
  • Techniques  

While all types of construction need to have effective and reliable safety measures, residential construction typically has less concerns.  Less requirements usually means an easier time with authorities and compliance. 

Materials & Equipment

The most common material in commercial construction is steel frames, where residential construction tends to use wood.  Timber frames are structurally sound and an affordable option for residential construction. 

When commercial buildings are designed by an architect, they require steel and other materials. Steel is chosen for its durability, but to use it safely and efficiently, commercial contractors need to have access to trained, reliable operators.  Commercial construction will need specialized heavy machinery to complete projects. Construction management firms should have established relationships with suppliers to guarantee consistent work and supply.


When you hire a construction managemen t firm they will work to get your project completed as quickly as possible. Residential construction usually aren’t finished as quickly, but has fewer requirements. 

The commercial construction already has high expectations for completion — largely due to the large financial investment in the product. 


Commercial construction costs are significantly higher because of:

  • Size 
  • Materials 
  • Overhead costs 
  • Equipment 
  • Labour 

Where commercial construction can obtain funding from several different places like government, corporate financing, owners, investors, and developers. Homeowners usually secure funding from the bank. 

When looking for a firm to handle your next build, look for firms with experienced and skilled workers. They should come highly recommended, have experience, skilled workers, and confirm the firm is qualified to handle large-scale builds. 

If you have more questions about the difference between commercial and residential builds and ask questions about your next project, give IRIS Construction Management a call today.