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Why does it cost so much to build things in New York City?

Over at Vox there's a piece today headlined "Why does it cost so much to build things in America?" It's about the sky-high cost of transportation construction projects in the United States, and it gives me an excuse to post the chart below:

As you can see, New York City truly has sky-high construction costs for transit projects. But the rest of the country is fairly normal. We're higher than some countries and lower than others, probably coming in at a bit over average.

This disparity is so obvious that I think any comparison of transit construction costs should treat the United States as two separate regions: New York City and everyplace else.

As for ordinary highway construction costs, that's more difficult to get a handle on. However, based on several different estimates and studies, it doesn't appear that the US (ex NYC)  has higher costs per kilometer than comparable projects in Europe.

In other words, I suspect that all future versions of this article should be headlined "Why does it cost so much to build things in New York City?"

14 thoughts on “Why does it cost so much to build things in New York City?

  1. typhoon

    Looking at the chart you provided, the two other locations with the highest costs were cities: Hong Kong and Singapore. Would costs in Chicago and L.A. be similarly high as NYC? I would assume cities are always going to have high costs, but perhaps NYC is extreme even for big cities.

    1. devondjones

      Worth noting that Hong Kong has projects approaching 2B/KM. My guess is that transportation infra in high density island cities is inherently expensive.

  2. rick_jones

    Where does California High Speed Rail sit on this chart? Ultimately it is a transit project to make the Central Valley a bedroom community fir SF and LA.

    1. jte21

      Which is ironic, seeing as, at this point, it's basically going to link Bakersfield and Merced. I know they say the plan is to link LA and SF, but I don't think anyone thinks that's actually going to happen in our lifetimes, particularly at the rate costs and delays are rising for the Central Valley segment. And that was supposed to be the cheap and easy section.

  3. Shantanu Saha

    The geography of New York is unique among American cities. The bulk of the real estate is on three islands, limiting outward expansion. Almost all the buildable land was taken long ago, leaving the only areas for new buildings being spaces like train yards that would require obscenely expensive platforms to be built on top of them. Many buildings are protected in some way for historic preservation, preventing infill hi-rise development in entire neighborhoods in otherwise densely populated areas close to public transit. The building of major transit projects have to take into account all of these factors, including tunneling through dense bedrock, loose landfill with less than well-built structures on top, etc. That an the regiments of lawyers well-heeled local groups will bring out trying to prevent or redirect any transit project as soon as it hits the design stage, until it’s completed.

    1. kaleberg

      There are also underground rivers, and you have to route around existing utilities and subways. I know a lot of the cost of the Second Avenue line was just relocating data, water, electric and steam conduits. There's also the cost of not having a seasoned team of experts in house. Consultants cost more and one winds up with a contract driven design and building scheme that makes minor changes costly.

      Also, covering rail yards might be expensive, but they recently covered Hudson Yards in midtown west and there are plans to cover the Sunnyside yards in Queens. I shot a film out there with some friends when I was in high school. Amazingly, we didn't get hit by a train. Dumb kids.

  4. west_coast

    SF Bay Area transit construction costs are also high. There was just an article about it:
    https://www.mercurynews.com/2021/06/27/big-bay-area-projects-cost-too-much-and-take-too-long-what-will-it-take-to-get-them-right/amp/

    The tl;dr is that it has too many transit agencies, so there is not much institutional knowledge in any one agency. Also, stupid state laws around bidding. And the rebuild of the bay bridge eastern span was its own special clusterf*ck.

  5. Special Newb

    Wait, I thought European roads were built to higher quality than US roads (i.e. 6 inches thick, not 4) so we end up paying more for less.

  6. jte21

    The NYT had a pretty detailed writeup of the problem a couple of years ago (https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-construction-costs.html).

    Tl;dr? Layers of byzantine contracting regulations, poor oversight, and corruption result in costly reduncancies, overstaffing, and delays with little accountability. One study found only 700 positions required for a project, but 900 workers somehow on the payroll. Nobody had any idea where the extra 200 people were or what they were supposed to be doing. And on and on.

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