Construction Costs

High labor costs. Confusing and inefficient work rules. Counterproductive tax structures. Strangulating regulation. Clogged transportation routes. All these contribute to the absurdly high costs and long timeframes for building in New York.

Since 2003, construction costs have risen by as much as 1 percent each month, while the construction boom made it difficult to find skilled contractors and labor and pushed up land prices throughout the five boroughs. Today, construction has slowed down considerably--but New York's costs remain twice as high as the next mostly costly city, Chicago. The cost to build is a key competitive issue for world cities.


Construction Labor Costs in New York City: A Moment of Opportunity, available HERE.

Recent News

construction.jpg&q=80&MaxW=jpgGeoffrey Decker reports for Crain's that the unionized construction industry faces continued uncertainty as nonunion contractors erode its position--the subject of RPA-CUI's Construction Labor Costs in New York City: A Moment of Opportunity.

The concerns continue even after settlement of 23 construction labor contracts in 2011. Some union deals in the last round of talks yielded significant concessions, Decker reports, but "new contracts with the carpenters' union and concrete workers increased wages and offered concessions only on buildings that were no higher than 20 stories." Industry experts, including RPA-CUI's Hope Cohen, think "the most significant development may be the decision of the Building Trades Employers' Association, a large general contracting group and chief negotiator, to opt out of a plan that required its contractors work exclusively with unions."

construction-and-dev-318x160.pngJon Lentz reports for City & State on what the $1.5 billion pricetag for Dubai's Burj Khalifa would--or wouldn't--build in New York. Could New York City's construction costs, which are among the highest in the nation, discourage investment and push developers to build elsewhere? "That's the big fear: Have we reached the threshold, or when will we reach the threshold, that people will chose not to build here and build somewhere else instead?" said Hope Cohen, the associate director of the Regional Plan Association's Center for Urban Innovation. "And that goes directly to a question of New York's competitiveness, within the nation and also globally."

Forum to examine the current model for financing transportation projects in New York State and develop a new paradigm for funding these projects.

8am-1pm, Friday, December 2, 2011 @ McGraw-Hill Conference Center

Program description: http://www.navigatingopportunities.com/money/program.php

Register: http://www.navigatingopportunities.com/money/register.php

WTC1 #1.JPG

After the terrorist attacks of 9/11, prominent commentators argued that in an age of urban terrorism, tall buildings should become a thing of the past -- that cities should decentralize themselves and people should be encouraged to spread out around the country. New York magazine columnist Kurt Andersen contended that the Freedom Tower should be abandoned, calling it "a provocation to ambitious terrorists around the world."

Of course, Americans made their own decisions and -- contrary to all predictions -- moved to cities instead of away from them. Demand for living and working in tall buildings soared, and the race by developers to build the world's tallest resumed.

This is as it should be.

Reconstructing New York's Building Business (Crain's)

Steam-Fitter.jpg

It was billed as the summer that would transform the city's $24 billion unionized construction industry. Two dozen contracts were expiring, and contractors vowed to negotiate a wide array of concessions to regain work lost in recent years to nonunion builders.

After down-to-the-wire bargaining and a brief concrete workers' strike, most of the deals got done--many with significant concessions on work rules and wages.

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RPA Center for Urban Innovation

The Center for Urban Innovation pursues sensible, pragmatic approaches to urban development. Rising above the ideological debates that have gotten in the way of actually solving the many difficult problems facing cities, CUI focuses on the major trends that are...

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Contributors

Julia Vitullo-Martin
Julia Vitullo-Martin is a Senior Fellow at the Regional Plan Association and Director of the Center for Urban Innovation. Her work focuses on development issues such as planning and zoning, housing, waterfront development, environmental review, building and fire codes, and...
Hope Cohen
Hope Cohen is associate director of RPA's Center for Urban Innovation. Before coming to RPA, Cohen was deputy director of the Manhattan Institute's Center for Rethinking Development, where she focused principally on issues of urban environment and infrastructure, publishing...

Debating Development

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Julie Iovine writes for the Wall Street Journal about "activist" zoning in the Bloomberg administration: "It not only shapes…
Crain's Reports that Business is Looking Down for Construction Companies
Geoffrey Decker reports for Crain's that the unionized construction industry faces continued uncertainty as nonunion contractors erode its position--the subject…
City & State Looks at New York's Sky-High Construction Costs
Jon Lentz reports for City & State on what the $1.5 billion pricetag for Dubai's Burj Khalifa would--or wouldn't--build in…
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