A construction contingency is money set aside for unexpected conditions, minor scope adjustments, and items that cannot be fully priced until walls are opened. In Bay Area homes — most built before 1970 — contingency planning is not optional.
What Contingency Covers
Common uses: rotted framing behind siding or around windows, galvanised pipe replacement when walls are opened, electrical panel upgrades triggered by adding circuits, asbestos abatement in older materials, and soil conditions on exterior projects. These are not contractor errors — they are the reality of renovating older construction.
How Much to Budget
Pre-1960 homes: 15–20 %. 1960–1980 construction: 10–15 %. Post-1980: 5–10 %. Your specific home and scope determine actual risk.
How to Structure It
Keep contingency money separate from your renovation budget. Do not pre-commit it to upgrades. If you do not use it — some projects come in on budget — keep it. It exists to prevent mid-project financial crises, not to fund feature creep.