NEW YORK CITY-The New York Building Congress says construction costs are inching their way back up after declining in 2009. While it’s not possible to pinpoint how much costs are rising, given variations among the cost indices it surveyed, the association says the general trend is upward, albeit modestly.
Depending in the index, local construction costs have gone up anywhere from 0.8% to 4.9% through the first three quarters of 2010. By comparison, these same indices show an increase nationwide of between .0.1% and 7.2% during the same time period.
“The good news is that New York City is in no way experiencing the relentless rate of cost escalation experienced during the building boom,” Building Congress president Richard T. Anderson says in a statement “The bad news is that, depending upon which index you use, New York has given back most if not all of the cost declines we experienced in ‘09.”
Anderson notes that while rising construction costs “are often a function of global factors out of the city’s control, there are measures in the areas of land use, procurement, operations and workforce management and recruitment that can be adopted by government and the construction industry to achieve tangible cost savings.” For example, he cites the recent series of “landmark” project-labor agreements negotiated by the Building Trades Employers’ Association and the Building & Construction Trades Council, which have lowered labor costs on some major projects.
When cities such as London and Tokyo are factored in, New York City does not top a list for construction costs in any of the major sectors. A comparative survey of 20 global markets from Rider Levett Bucknall found that as of April of this year, it cost $288 per square foot to build a “premium” office tower in New York, compared to $418 per square foot in London and $356 in Tokyo. In the multifamily sector, New York’s per-square-foot construction costs were exceeded by those of London, Tokyo, Honolulu, San Francisco, Boston and Los Angeles.
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