NEW YORK CITY-The New York Building Congress says constructioncosts are inching their way back up after declining in 2009. Whileit’s not possible to pinpoint how much costs are rising, givenvariations among the cost indices it surveyed, the association saysthe general trend is upward, albeit modestly.

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Depending in the index, local construction costs have gone upanywhere from 0.8% to 4.9% through the first three quarters of2010. By comparison, these same indices show an increase nationwideof between .0.1% and 7.2% during the same time period.

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“The good news is that New York City is in no way experiencingthe relentless rate of cost escalation experienced during thebuilding boom,” Building Congress president Richard T. Andersonsays in a statement “The bad news is that, depending upon whichindex you use, New York has given back most if not all of the costdeclines we experienced in ‘09.”

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Anderson notes that while rising construction costs “are often afunction of global factors out of the city’s control, there aremeasures in the areas of land use, procurement, operations andworkforce management and recruitment that can be adopted bygovernment and the construction industry to achieve tangible costsavings.” For example, he cites the recent series of “landmark”project-labor agreements negotiated by the Building TradesEmployers’ Association and the Building & Construction TradesCouncil, which have lowered labor costs on some major projects.

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When cities such as London and Tokyo are factored in, New YorkCity does not top a list for construction costs in any of the majorsectors. A comparative survey of 20 global markets from RiderLevett Bucknall found that as of April of this year, it cost $288per square foot to build a “premium” office tower in New York,compared to $418 per square foot in London and $356 in Tokyo. Inthe multifamily sector, New York’s per-square-foot constructioncosts were exceeded by those of London, Tokyo, Honolulu, SanFrancisco, Boston and Los Angeles.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.