Why American construction costs are so high (2019)(pedestrianobservations.com)
pedestrianobservations.com
Why American construction costs are so high (2019)
https://pedestrianobservations.com/2019/03/03/why-american-costs-are-so-high-work-in-progress/
159 comments
Here is a book that describes various 'corrupt' schemes: Corruption and Racketeering in the New York City Construction Industry: The Final Report of the New York State Organized Crime Taskforce
Here is a pdf the report: https://www.ceic.gouv.qc.ca/fileadmin/Fichiers_client/centre...
Here is a pdf the report: https://www.ceic.gouv.qc.ca/fileadmin/Fichiers_client/centre...
michael franzese talks about this alot in various podcasts and interviews. it was true much more recently than 1910. the family isnt what it used to be, but its certainly not gone.
There are still stupid high costs for stuff and people are still put on the payroll to do nothing. $70/hr for a guy who does nothing but get coffee...
https://nypost.com/2018/03/05/union-workers-are-making-42-pe...
There was a great piece done by John Stossel about why a pretty basic public park bathroom cost $2M to build and took years to finish construction. https://www.youtube.com/watch?v=qKRuhiMDOjo
There was a great piece done by John Stossel about why a pretty basic public park bathroom cost $2M to build and took years to finish construction. https://www.youtube.com/watch?v=qKRuhiMDOjo
John Stossel really shows his hand in that piece when he uses "wheelchair access" as an example of government spending run amok. Why shouldn't disabled people should be able to access facilities they pay for with their tax dollars? Why is complying with the ADA--a bipartisan law signed by George H.W. Bush--seen as a waste of taxpayer money?
He certainly does mention that and it doesn't seem clear why, but either way how does something as basic as a restroom cost that much to build? You think there isn't a lot of waste involved and at the tax payers expense?
Should even a wheelchair accessible public restroom cost $2M and take years to finish?
The ADA might be generally a good idea, but that doesn't mean that everything it makes you do is a good idea.
On my street, the city(near Denver) recently added 3 curb cuts for ADA compliance. I don't know how much those curb cuts cost, but they weren't free. Now - no one really walks down my street. There were curb cuts at both ends of the block. Every driveway has a curb cut. But more curb cuts needed to be added because of the ADA, even though there is no clear explanation of how anyone with a movement disability is going to benefit from these new cuts.
On my street, the city(near Denver) recently added 3 curb cuts for ADA compliance. I don't know how much those curb cuts cost, but they weren't free. Now - no one really walks down my street. There were curb cuts at both ends of the block. Every driveway has a curb cut. But more curb cuts needed to be added because of the ADA, even though there is no clear explanation of how anyone with a movement disability is going to benefit from these new cuts.
Do you ever question why the sidewalk was unused? Without curb cuts, any potential sidewalk user with wheels is impaired with a detour through the street or a cumbersome stop and lift process.
Does a parent with their kids in a stroller get discouraged by this? How about those with Rollerblades, non-electric scooters, or any kind of dolly?
Curb cuts for cars are often a notable detour for other road users, many have a 1/2 inch lip (unlike sidewalk curb cuts).
Does a parent with their kids in a stroller get discouraged by this? How about those with Rollerblades, non-electric scooters, or any kind of dolly?
Curb cuts for cars are often a notable detour for other road users, many have a 1/2 inch lip (unlike sidewalk curb cuts).
You're telling me all the reasons that curb cuts may be a good idea, but not why they are actually a good idea in my neighborhood(not that I blame you since you don't know where I live). Anyways - that is really my point. ADA has good general ideas, but it can be too generalized to be usefully applied to many neighborhoods.
> Do you ever question why the sidewalk was unused?
No, because it is clear. It is unused because the only reason anyone would walk down it is if they lived in the neighborhood. So people do use it, but the number of unique users is approximately how many people live in the 10 houses on the street.
> Without curb cuts
There are a ton of curb cuts. Literally every 70' is a curb cut for the entire length of the street before they did their work. Now there are three more curb cuts.
> Does a parent with their kids in a stroller get discouraged by this?
I'm a parent with a stroller and it has never been a problem. Hasn't been a problem for my wife either who is significantly weaker than me and has a bad back.
> How about those with Rollerblades, non-electric scooters, or any kind of dolly?
These are also me, and no, no problem. Also me on a skateboard without an issue. And it's not because I'm great at skateboarding, since I literally just started 2 months ago.
> Curb cuts for cars are often a notable detour for other road users
There's zero lip on any of the 12 curb cuts on the street. I know this because I've ridden my skateboard over them a bunch of times and have never fallen.
> Do you ever question why the sidewalk was unused?
No, because it is clear. It is unused because the only reason anyone would walk down it is if they lived in the neighborhood. So people do use it, but the number of unique users is approximately how many people live in the 10 houses on the street.
> Without curb cuts
There are a ton of curb cuts. Literally every 70' is a curb cut for the entire length of the street before they did their work. Now there are three more curb cuts.
> Does a parent with their kids in a stroller get discouraged by this?
I'm a parent with a stroller and it has never been a problem. Hasn't been a problem for my wife either who is significantly weaker than me and has a bad back.
> How about those with Rollerblades, non-electric scooters, or any kind of dolly?
These are also me, and no, no problem. Also me on a skateboard without an issue. And it's not because I'm great at skateboarding, since I literally just started 2 months ago.
> Curb cuts for cars are often a notable detour for other road users
There's zero lip on any of the 12 curb cuts on the street. I know this because I've ridden my skateboard over them a bunch of times and have never fallen.
From what you describe you live on a dead end road or cul-de-sac that needs more pathways.
This poor connectivity is part of why states and localities have banned cul-de-sacs and started enforcing road end connection ordinances. Here in Seattle there are many dead end roads that have a staircase down to the next road (usually a 2 story drop) to tie our hilly city's sidewalks together.
This poor connectivity is part of why states and localities have banned cul-de-sacs and started enforcing road end connection ordinances. Here in Seattle there are many dead end roads that have a staircase down to the next road (usually a 2 story drop) to tie our hilly city's sidewalks together.
I'm not sold on labor unions being the primary factor in this, though they may contribute, because construction costs in the US are so much higher than countries like France, which has even stronger labor unions and stricter regulation. I find it hard to believe that US labor unions are able to extract so much more value than their French counterparts.
I think a bigger culprit is excessive local control and zoning restrictions, wielded to benefit property owners or to bleed developers and generate revenue for city governments. The shocking part, IMO, is that these costs far outweigh the cost added by notoriously strong French labor unions and EU regulation.
I think a bigger culprit is excessive local control and zoning restrictions, wielded to benefit property owners or to bleed developers and generate revenue for city governments. The shocking part, IMO, is that these costs far outweigh the cost added by notoriously strong French labor unions and EU regulation.
Unions in the US work different from France.
In France unions wouldn't attempt to get their people $200/hour that the sandhogs in NYC get. We should bring the high priced unions to a realistic wage. However most union wages are not that far out of line.
Also in France the union is more relaxed about letting go of jobs that are automated away. There is no reason a TBM needs twice as many people to operate it in NYC as in France. There is no reason for any trains to have a conductor anymore, and train drivers are something that should be all but dead as well (though France is way behind the automation curve here as well)
That said, union labor is only a small part of the problem. Even if all of the most anti-union propaganda is taken as 100% true, union labor is still only a small fraction of the total cost of any build in the US. As such we need to look hard at what is going on in the other parts of construction.
In France unions wouldn't attempt to get their people $200/hour that the sandhogs in NYC get. We should bring the high priced unions to a realistic wage. However most union wages are not that far out of line.
Also in France the union is more relaxed about letting go of jobs that are automated away. There is no reason a TBM needs twice as many people to operate it in NYC as in France. There is no reason for any trains to have a conductor anymore, and train drivers are something that should be all but dead as well (though France is way behind the automation curve here as well)
That said, union labor is only a small part of the problem. Even if all of the most anti-union propaganda is taken as 100% true, union labor is still only a small fraction of the total cost of any build in the US. As such we need to look hard at what is going on in the other parts of construction.
Thanks to the EU construction companies in France have access to Eastern European labourers.
And they don't do unions.
From family in the industry, my understanding is it’s not union benefits/wages/etc per se, but more the work rules that haven’t changed with the times driving over staffing, inability to fire bad performers, and overtime issues.
There’s a lot of on-the-clock non-work built into the work rules. My relatives in the industry described the typical day as involving on-the-clock time built in for cleanup&changing into/out of work clothes, briefing on tasks for the day, safety briefing (AM and again after lunch for legal reasons), smoke/coffee breaks, etc. The longest stretch of uninterrupted construction is about a 2 hour sprint into the end of the day.
On the staffing front, the only lever a project manager has is to give the 2-3 hardworking guys out of 12 a boatload of overtime hours to get the actual work done. This is one reason that on most every job site around the city you see some pretty sick cars. Those 2-3 guys are getting 50% of the work done out of the 12, and getting paid Google engineering money for it.
NYT article years back talked about 2nd avenue subway covered examples of work rules. Tunnel boring machine in NY requires 3-4x the staffing of Paris, because thats the contract negotiated in the 70s when it was seen to be reducing jobs.. and no one has revisited it. This is no small figure as we have a handful of these digging tunnels the last few years, at the rate of 50ft/day... for months. Similarly there is a mandatory on-site oiler who basically sits in the break room all day because the machines do not need constant oiling anymore the way they did when the rule was written half a century ago.
One example from my relative - on a large NYC project he worked, they couldn’t take deliveries from suppliers on Saturday because it required the job site to be opened. Per union rules this would have required some inane number of staff to be on-site getting overtime rather than just say the guy to open the gate & staff (if any) required to empty the truck.
A lot of this is because public sector unions are treated as a voting constituent rather than a vendor by the government, and no politician ever wants to cross them.
There’s a lot of on-the-clock non-work built into the work rules. My relatives in the industry described the typical day as involving on-the-clock time built in for cleanup&changing into/out of work clothes, briefing on tasks for the day, safety briefing (AM and again after lunch for legal reasons), smoke/coffee breaks, etc. The longest stretch of uninterrupted construction is about a 2 hour sprint into the end of the day.
On the staffing front, the only lever a project manager has is to give the 2-3 hardworking guys out of 12 a boatload of overtime hours to get the actual work done. This is one reason that on most every job site around the city you see some pretty sick cars. Those 2-3 guys are getting 50% of the work done out of the 12, and getting paid Google engineering money for it.
NYT article years back talked about 2nd avenue subway covered examples of work rules. Tunnel boring machine in NY requires 3-4x the staffing of Paris, because thats the contract negotiated in the 70s when it was seen to be reducing jobs.. and no one has revisited it. This is no small figure as we have a handful of these digging tunnels the last few years, at the rate of 50ft/day... for months. Similarly there is a mandatory on-site oiler who basically sits in the break room all day because the machines do not need constant oiling anymore the way they did when the rule was written half a century ago.
One example from my relative - on a large NYC project he worked, they couldn’t take deliveries from suppliers on Saturday because it required the job site to be opened. Per union rules this would have required some inane number of staff to be on-site getting overtime rather than just say the guy to open the gate & staff (if any) required to empty the truck.
A lot of this is because public sector unions are treated as a voting constituent rather than a vendor by the government, and no politician ever wants to cross them.
I will also add that there is essentially a ton of overhead built in by construction firms dealing with the city/MTA/PA. The industry generally sees them as being difficult customers who change their mind, plan poorly, and have a lot of change requests. This results in a fairly small pool of firms bidding on projects, the costs being padded, plus overruns and change requests being tacked on as they go for even more cost.
I read a paper on tunneling costs. One of their explanations why costs were higher in the US was the government shifts the risk onto the contractor. And then tries to save money by not employing enough oversight.
The result low numbers of heavily padded bids on contracts. And then execution tends to be inflexible and prone to bogging down.
The result low numbers of heavily padded bids on contracts. And then execution tends to be inflexible and prone to bogging down.
Another factor I have other family members who dealt with the city on the technology side rather than construction side is certifications / qualifications.
There are only certain qualified bidders for projects that have attained a level of certification from the city. This reduces the pool of bidders, but it also just adds cost layers.
I have a relative that worked (briefly) at a firm that bids on city tech projects and then delegates all development implementation to tech subcontractors who then sub out most of it to offshore, with a few onshore dev&management.
The subcontractor can't bid because they don't have the scale to get the certifications, so the city pays a 40% margin to the certified contractor who is doing glorified project management.
I would be shocked if the same thing wasn't happening on the construction contracting/bidding process side of city/state/etc work.
There are only certain qualified bidders for projects that have attained a level of certification from the city. This reduces the pool of bidders, but it also just adds cost layers.
I have a relative that worked (briefly) at a firm that bids on city tech projects and then delegates all development implementation to tech subcontractors who then sub out most of it to offshore, with a few onshore dev&management.
The subcontractor can't bid because they don't have the scale to get the certifications, so the city pays a 40% margin to the certified contractor who is doing glorified project management.
I would be shocked if the same thing wasn't happening on the construction contracting/bidding process side of city/state/etc work.
> 40% margin to the certified contractor who is doing glorified project management.
This makes sense. My dad was an engineer working for the Feds. Really the job is technical project management and oversight. In the US there is a fetish for keeping the government workforce small. Which then results in outsourcing things at great expense.
Example I've heard that part of the reason there were delays and and cost overruns with the eastern span of the bay bridge was because CALTRANS didn't have enough engineers to do effective and timely oversight. Nor engineers with the proper experience.
This makes sense. My dad was an engineer working for the Feds. Really the job is technical project management and oversight. In the US there is a fetish for keeping the government workforce small. Which then results in outsourcing things at great expense.
Example I've heard that part of the reason there were delays and and cost overruns with the eastern span of the bay bridge was because CALTRANS didn't have enough engineers to do effective and timely oversight. Nor engineers with the proper experience.
Why exactly should construction workers clean up, change, and get briefed for free? How are those not work? Do you attend work meetings for free? Why don't construction workers deserve breaks? Do you ever take breaks at work? If so, why do you deserve to be paid for these things when construction workers don't? Be explicit.
The idea that US politicians never cross the public sector unions isn't compatible with the facts. The Taft-Hartley Act is law, and PATCO was destroyed.
The idea that US politicians never cross the public sector unions isn't compatible with the facts. The Taft-Hartley Act is law, and PATCO was destroyed.
Everyone deserves breaks and for some level of setup/cleanup to be on the clock. Some amount of what is enshrined in the work rules is just excessively cushy.
However there is a big difference between stuff built into these work rules vs what happens in private industry.
The basic question is - do the work rules restrict employers from adapting to productivity enhancing technology changes over time? The goods&services in the US which go up in cost much faster than inflation are the areas where we are unable to harness labor saving productivity - education, medicine, and it would seem municipal capital construction projects.
Does your employer retain Fortran programmers on-staff in the break room because they signed a contract when Fortran was important? If your employer moved all your compute to the cloud, would you keep 100% of your now redundant datacenter staff onboard? Does your employer keep the underperforming 25% of the team perpetually and just grant paid overtime in the $100k+ to the superstars to cover the gap? Does your office building maintain an elevator operator in each cab despite having automated the elevator 50 years ago?
This is the difference between private firms and the public sector union stuff you deal with in places like NYC.
I mean yeah, it sounds like a pretty nice work environment and I'd love if my (easier/safer) office job had all that paid time, rules and work limits built in. However.. I get why it seems nothing gets done in NYC construction because of it?
A fun example - there was a 6 month project to replace a set of 2-story staircase at my subway station. The demolition work was rather swift. I assumed they were building on-site if it was going to take 6 months. Lo and behold, it was actually a pre-fab staircase they trucked in. However not only did it take 6 months to simply install that pre-fab staircase, but they ran over by a few months! They actually had to come back and re-close it and do some repairs afterwards too. Meanwhile at the corner below that train station there was a McDonalds. I laughed as I watched them gut renovate it over the course of a weekend so they could be back in business by Monday selling food to riders.
If you haven't seen NYC municipal construction up close, its hard to fathom just how screwed up it is.
The basic question is - do the work rules restrict employers from adapting to productivity enhancing technology changes over time? The goods&services in the US which go up in cost much faster than inflation are the areas where we are unable to harness labor saving productivity - education, medicine, and it would seem municipal capital construction projects.
Does your employer retain Fortran programmers on-staff in the break room because they signed a contract when Fortran was important? If your employer moved all your compute to the cloud, would you keep 100% of your now redundant datacenter staff onboard? Does your employer keep the underperforming 25% of the team perpetually and just grant paid overtime in the $100k+ to the superstars to cover the gap? Does your office building maintain an elevator operator in each cab despite having automated the elevator 50 years ago?
This is the difference between private firms and the public sector union stuff you deal with in places like NYC.
I mean yeah, it sounds like a pretty nice work environment and I'd love if my (easier/safer) office job had all that paid time, rules and work limits built in. However.. I get why it seems nothing gets done in NYC construction because of it?
A fun example - there was a 6 month project to replace a set of 2-story staircase at my subway station. The demolition work was rather swift. I assumed they were building on-site if it was going to take 6 months. Lo and behold, it was actually a pre-fab staircase they trucked in. However not only did it take 6 months to simply install that pre-fab staircase, but they ran over by a few months! They actually had to come back and re-close it and do some repairs afterwards too. Meanwhile at the corner below that train station there was a McDonalds. I laughed as I watched them gut renovate it over the course of a weekend so they could be back in business by Monday selling food to riders.
If you haven't seen NYC municipal construction up close, its hard to fathom just how screwed up it is.
I'm glad you admit everyone deserves breaks; it seems to have been remarkably easy to convince you. I'm also glad to see your position on paying for the rest shift from outright opposition to unspecified contracts being excessive.
None of the rest of your reply is actually a response to what I said, though some of it is interesting. You also notably didn't respond to what I said about politicians.
Regarding Fortran programmers' contracts being honored, I would certainly hope any business would meet its contractual obligations (when they are moral and legal). Surely you aren't actually suggesting they shouldn't? Whether signing such a contract was a good idea or not, the very concept of a contract is founded on actually executing the terms of the agreement afterward.
I have never encountered a business that consistently swiftly dropped the underperforming parts of the team. I know that stack ranking firms supposedly exist, but they are far from typical. Even if your employment history is atypical, surely you've encountered less than efficient employees at clients, at vendors, and just out in the world in retail or restaurants; have you never happened to observe some of them staying in those positions at length? If you have seen private enterprise up close, it's hard to fathom the idea that it runs lean operations without waste.
Furthermore, many businesses have employees, sometimes many of them, who don't have the kind of clear work products that would make "the underperforming 25% of the team" potentially conceptually coherent. Plenty have employees with as little to do as a TBM oiler or an elevator operator. The market isn't just taking its time in pushing them to be more efficient, either. Actual markets and actual managers don't work like in an entry-level economics class.
None of the rest of your reply is actually a response to what I said, though some of it is interesting. You also notably didn't respond to what I said about politicians.
Regarding Fortran programmers' contracts being honored, I would certainly hope any business would meet its contractual obligations (when they are moral and legal). Surely you aren't actually suggesting they shouldn't? Whether signing such a contract was a good idea or not, the very concept of a contract is founded on actually executing the terms of the agreement afterward.
I have never encountered a business that consistently swiftly dropped the underperforming parts of the team. I know that stack ranking firms supposedly exist, but they are far from typical. Even if your employment history is atypical, surely you've encountered less than efficient employees at clients, at vendors, and just out in the world in retail or restaurants; have you never happened to observe some of them staying in those positions at length? If you have seen private enterprise up close, it's hard to fathom the idea that it runs lean operations without waste.
Furthermore, many businesses have employees, sometimes many of them, who don't have the kind of clear work products that would make "the underperforming 25% of the team" potentially conceptually coherent. Plenty have employees with as little to do as a TBM oiler or an elevator operator. The market isn't just taking its time in pushing them to be more efficient, either. Actual markets and actual managers don't work like in an entry-level economics class.
I have some family in the industry as well and they report the same thing happens with every crew, a few of the workers are what you would call "ninjas/rockstars" in software and the rest are just there to do the minimum. Unfortunately it's hard to tell when hiring because everyone acts motivated for the job and their real work ethic doesn't show up until a few weeks later and you're stuck with them.
Right on a normal project you’d weed out the poor performers but in this case its basically not possible. The workers knowing this is the case leads to a class of workers who show up and do the minimum. As long as they don’t do anything overtly that would trigger firing for cause, they can coast from project to project.
Therefore the only way project managers can get anything done is to give 25% of the team the opportunity to work 2x the hours for 2.5-3x the pay.
So instead of paying just for your 12 guys, you are paying for equivalent of 9+(3x3) = 18 guys when its really like 6-9 guys worth of work getting done.
Therefore the only way project managers can get anything done is to give 25% of the team the opportunity to work 2x the hours for 2.5-3x the pay.
So instead of paying just for your 12 guys, you are paying for equivalent of 9+(3x3) = 18 guys when its really like 6-9 guys worth of work getting done.
In New York City unions are essentially a subsidiary of the political system, funneling money into reelection champagnes. In return politicians return their support by requiring that any government contract must be awarded to contractors that use union labor. It is all a racket. I have heard stories from people who have done civil work in NYC and the level of corruption and waste is staggering. Like $5000 billed labor hours to drive to a site to plug in a cable. Firms will bit a 50% surcharge on any projects in NYC to compensate with the red tape and union labor costs.
Why can’t the feds do for construction corruption what Blumenthal and Giuliani did to organized crime in NYC.
The feds know it’s corrupt. Why can’t they go there and say all projects need to come through us and they ensure there is no monkey business going on with the contracts?
The feds know it’s corrupt. Why can’t they go there and say all projects need to come through us and they ensure there is no monkey business going on with the contracts?
If I were a developer in NYC and the feds said that, I would sue. constitutionally speaking, they don't have the power to say all building projects need to come through us.
Yes, construction contracts and rates are fueled by corruption. That said, I would only be OK with the feds going after the corruption. Not taking over construction. Do investigations. Trap people in stings. Do all the good old FBI tricks. I encourage that, but governmental takeover of all contracting is going too far.
Yes, construction contracts and rates are fueled by corruption. That said, I would only be OK with the feds going after the corruption. Not taking over construction. Do investigations. Trap people in stings. Do all the good old FBI tricks. I encourage that, but governmental takeover of all contracting is going too far.
The feds could say we won't contribute to a subway unless we actually build it.
Though as I said elsewhere, that just means in a few years the corrupt switch to how to deal with the feds. Much better for the feds to be an independent anti-corruption unit.
Though as I said elsewhere, that just means in a few years the corrupt switch to how to deal with the feds. Much better for the feds to be an independent anti-corruption unit.
> Why can’t the feds do for construction corruption what Blumenthal and Giuliani did to organized crime in NYC.
Ha! When I read that line I completely missed the last letter in the word "organized", and it made perfect sense. I thought it was an historical quote from Guiliani's last job application.
Ha! When I read that line I completely missed the last letter in the word "organized", and it made perfect sense. I thought it was an historical quote from Guiliani's last job application.
What makes you think the feds are any less corrupt?
The idea is that people on the outside are less likely to be locally corrupt.
Chinese dynasties did similar with their civil servants and Soviets practiced this in some areas to avoid this coziness that leads to corruption.
Chinese dynasties did similar with their civil servants and Soviets practiced this in some areas to avoid this coziness that leads to corruption.
This was done for funneling corruption money away fom local elites to some other non-local elites.
The corruption stayed the same - it's a revenue center, why touch it.
The corruption stayed the same - it's a revenue center, why touch it.
I have worked construction in San Francisco, and a former General Contractor.
There is a cost difference between all union projects, and non-union projects.
The costs seem outrageous at first. If I wanted to hire a union local 6 Electican a few years ago the union would charge me $101/hr. for a skilled worker to show up.
Yes--it sounds nutty?
The answer is bypass the union, and go non-union?
When all us said and done, and the project is completed, and the developer gets the bill; the few projects I worked on, the total cost of building was roughly the same?
That doesn't take into account what non-union shops cost society either.
Very few non-union shops provide health care. If they do, it's usually a lousy plan.
Workers get sick, or hurt, and worker's compensation runs out; you have workers looking for government medical care.
My point is I'm pretty sure the mob is not affiliated with unions in San Francisco. (I know that was not your point)
My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same.
Non-union workers make developers more money. The buyer will not see those savings.
You the buyer will not receive a better deal ever. The market determines the price.
Now--if you are the developer, it's a no brainer--kind of--you want the building built as cheaply as possible. You hire non-union, provide lousy training, but live in a grand mansion. You spit out a few spoiled kids, and they run the money machine. (Big Bill of Bradley electric was apprentice for 5 years. Learned the trade. Turned around and opened a non-union shop. Made millions. Made so much money he could shoot his son in-law, and somehow get out if a long jail sentence. Making a lot of money is nice?)
Many unions now have a no compete clause in their agreement. Unions don't want to pay for your schooling, and have their guys opening up non-union shops. I am pretty sure it's never enforced, or even legal? Wow--I'm just writing too much today. Don't feel that great? I'm finding this opening depressing in a weird way. Sorry about bothering anyone with my issues. I sometimes have no one to talk to.)
O.k, I say "kind of" because with a union run job, it's usually done on time, and done well.
This crazy rant is basically developers are usually the only one's saving money with non-union help.
There is a cost difference between all union projects, and non-union projects.
The costs seem outrageous at first. If I wanted to hire a union local 6 Electican a few years ago the union would charge me $101/hr. for a skilled worker to show up.
Yes--it sounds nutty?
The answer is bypass the union, and go non-union?
When all us said and done, and the project is completed, and the developer gets the bill; the few projects I worked on, the total cost of building was roughly the same?
That doesn't take into account what non-union shops cost society either.
Very few non-union shops provide health care. If they do, it's usually a lousy plan.
Workers get sick, or hurt, and worker's compensation runs out; you have workers looking for government medical care.
My point is I'm pretty sure the mob is not affiliated with unions in San Francisco. (I know that was not your point)
My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same.
Non-union workers make developers more money. The buyer will not see those savings.
You the buyer will not receive a better deal ever. The market determines the price.
Now--if you are the developer, it's a no brainer--kind of--you want the building built as cheaply as possible. You hire non-union, provide lousy training, but live in a grand mansion. You spit out a few spoiled kids, and they run the money machine. (Big Bill of Bradley electric was apprentice for 5 years. Learned the trade. Turned around and opened a non-union shop. Made millions. Made so much money he could shoot his son in-law, and somehow get out if a long jail sentence. Making a lot of money is nice?)
Many unions now have a no compete clause in their agreement. Unions don't want to pay for your schooling, and have their guys opening up non-union shops. I am pretty sure it's never enforced, or even legal? Wow--I'm just writing too much today. Don't feel that great? I'm finding this opening depressing in a weird way. Sorry about bothering anyone with my issues. I sometimes have no one to talk to.)
O.k, I say "kind of" because with a union run job, it's usually done on time, and done well.
This crazy rant is basically developers are usually the only one's saving money with non-union help.
> O.k, I say "kind of" because with a union run job, it's usually done on time, and done well.
This is why owners of Class A real estate usually mandate union labor, at least for MEP trades.
I bid and run work at a union shop, it’s sometimes difficult to compete on prevailing wage/public jobs here since only the cash wage portion is counted and not the benefits portion. So, a non-union shop can pay the $45/hr prevailing wage and cheap out on fringe benefits, maybe an additional 12-15/hr, where the union labor gets the prevailing wage and negotiated fringe benefits package that is roughly 2x the base wage (total comp). Right now we pay union journeyman electricians $87/hr in IBEW 292, which will go to $90/hr next Monday.
The good thing is, there’s plenty of work for union shops since as I mentioned, lots of Class A real estate and giant companies stick to union labor for construction, as the quality or perceived quality is higher (in general).
You’re also correct about the extra savings going to the developer, if you hire non-union labor and are bidding against a union shop and it’s a lump sum bid, you only need to beat the union guy by 1-2%, the rest is profit to keep.
It’s refreshing to see someone with actual experience commenting about construction on HN, nice post!
This is why owners of Class A real estate usually mandate union labor, at least for MEP trades.
I bid and run work at a union shop, it’s sometimes difficult to compete on prevailing wage/public jobs here since only the cash wage portion is counted and not the benefits portion. So, a non-union shop can pay the $45/hr prevailing wage and cheap out on fringe benefits, maybe an additional 12-15/hr, where the union labor gets the prevailing wage and negotiated fringe benefits package that is roughly 2x the base wage (total comp). Right now we pay union journeyman electricians $87/hr in IBEW 292, which will go to $90/hr next Monday.
The good thing is, there’s plenty of work for union shops since as I mentioned, lots of Class A real estate and giant companies stick to union labor for construction, as the quality or perceived quality is higher (in general).
You’re also correct about the extra savings going to the developer, if you hire non-union labor and are bidding against a union shop and it’s a lump sum bid, you only need to beat the union guy by 1-2%, the rest is profit to keep.
It’s refreshing to see someone with actual experience commenting about construction on HN, nice post!
> My main point is when the building is completed, and it's time for the developer to sell the shiny new building; the price you pay is exactly the same.
It is more complicated than that.
The way that supply and demand works, is that if costs go up, then there is less reason to create new supply.
And a lower supply of an item, means that prices, for the overall market, will go up.
That is how supply and demand works, and housing is no different.
> You the buyer will not receive a better deal ever. The market determines the price.
The market is determined by supply and demand. This is standard, 101 economic theory. If costs go up, supply go down (or supply increases a smaller amount), and price goes up.
It is more complicated than that.
The way that supply and demand works, is that if costs go up, then there is less reason to create new supply.
And a lower supply of an item, means that prices, for the overall market, will go up.
That is how supply and demand works, and housing is no different.
> You the buyer will not receive a better deal ever. The market determines the price.
The market is determined by supply and demand. This is standard, 101 economic theory. If costs go up, supply go down (or supply increases a smaller amount), and price goes up.
[deleted]
Agreed that New York City is an outlier in a number of ways, but there does appear to be something interesting going on with regard to rising U.S. costs for a variety of things besides just construction (e.g., health care and education). Slate Star Codex did an interesting though definitely inconclusive piece on this in 2017: https://slatestarcodex.com/2017/02/09/considerations-on-cost...
Some past threads:
Why American Construction Costs Are So High - https://news.ycombinator.com/item?id=19313042 - March 2019 (158 comments)
Why US Major Infrastructure Construction Costs Are So High - https://news.ycombinator.com/item?id=19308481 - March 2019 (2 comments)
An adjacent one for good measure:
Why Are Canadian Construction Costs So High? (2018) - https://news.ycombinator.com/item?id=21618134 - Nov 2019 (140 comments)
Why American Construction Costs Are So High - https://news.ycombinator.com/item?id=19313042 - March 2019 (158 comments)
Why US Major Infrastructure Construction Costs Are So High - https://news.ycombinator.com/item?id=19308481 - March 2019 (2 comments)
An adjacent one for good measure:
Why Are Canadian Construction Costs So High? (2018) - https://news.ycombinator.com/item?id=21618134 - Nov 2019 (140 comments)
Thanks for linking these past threads.
Alon has continued their work on this subject with a team of other scholars as the "Transit Costs Project": https://transitcosts.com/about/
Alon has continued their work on this subject with a team of other scholars as the "Transit Costs Project": https://transitcosts.com/about/
I have no opinions on the American industry, but I have known folks that have run local (NY) construction companies.
They have all said that you need to deal with the wiseguys. They also have told me that they are nothing like what TV makes them out to be.
Sort of like the famous "widgets" scene in Back to School[0].
I can tell you that the Japanese (at least in Tokyo) construction industry is awesome. They build incredibly ambitous and robust buildings, in a really short time.
I traveled to Tokyo regularly, for 20+ years. I tended to stay in the same hotel.
I remember looking out my window one year, and seeing a big field.
The next year, it was a big hole in the ground.
The next year, it was a 30-story skyscraper; fully occupied.
[0] https://www.youtube.com/watch?v=YlVDGmjz7eM
They have all said that you need to deal with the wiseguys. They also have told me that they are nothing like what TV makes them out to be.
Sort of like the famous "widgets" scene in Back to School[0].
I can tell you that the Japanese (at least in Tokyo) construction industry is awesome. They build incredibly ambitous and robust buildings, in a really short time.
I traveled to Tokyo regularly, for 20+ years. I tended to stay in the same hotel.
I remember looking out my window one year, and seeing a big field.
The next year, it was a big hole in the ground.
The next year, it was a 30-story skyscraper; fully occupied.
[0] https://www.youtube.com/watch?v=YlVDGmjz7eM
Isn't Japan known for tearing down homes after 25-30 years? Are commercial buildings built to last?
I think part of the quick turnaround on houses is related to superstitions about dwellings in which people have died. Most of the value is also in the land rather than the structure so the economics are less punishing. I suspect the costs of building in commercial areas is high enough to offset some of this.
[deleted]
What does it matter if construction is cheap and efficient?
Nobody cares if cars are “built to last” 30+ years, because we can just make new cars. There’s a persistent mythology in construction about “they don’t make ‘em like they used too” and “back in the day they were true craftsmen”.
It’s mostly BS, old houses are incredibly shitty compared to modern standards. But this type of attitude slows down progress. Any sort of innovation or productivity improvement gets looked down upon as just being a way to cut corners.
Nobody cares if cars are “built to last” 30+ years, because we can just make new cars. There’s a persistent mythology in construction about “they don’t make ‘em like they used too” and “back in the day they were true craftsmen”.
It’s mostly BS, old houses are incredibly shitty compared to modern standards. But this type of attitude slows down progress. Any sort of innovation or productivity improvement gets looked down upon as just being a way to cut corners.
Well, there are the environmental costs of tearing down and building new vs upgrading an existing structure.
There are also economic concerns. Most houses in the US hold some value beyond 30 years. A house build in 1990 in the US is usually still worth something but in Japan a lot of houses from that era are worth nothing. The land may be an asset still, but the structure is not.
There are also economic concerns. Most houses in the US hold some value beyond 30 years. A house build in 1990 in the US is usually still worth something but in Japan a lot of houses from that era are worth nothing. The land may be an asset still, but the structure is not.
Yup, and loans are also cheap in Japan. You can get a 35 year fixed-rate mortgage at 1.5% APR [1]. Build a new 3 bedroom house for JPY 20,000,000 (~$185K USD), and you're paying JPY 61,000 (~$560) per month for a brand new house designed to your tastes, with all the modern conveniences (note this doesn't include cost of land).
As an example of what that might get you, here's one of the first search results that comes up when looking for new houses in Omiya: https://www.athome.co.jp/kodate/6971997067/. The monthly payment on this house (including land) would be JPY 95,500 (~$880 USD).
I personally bought my house used, but I can also understand why almost all of my neighbors chose to build new houses.
[1] https://www.shinseibank.com/english/housing/loan_kinri.pdf
As an example of what that might get you, here's one of the first search results that comes up when looking for new houses in Omiya: https://www.athome.co.jp/kodate/6971997067/. The monthly payment on this house (including land) would be JPY 95,500 (~$880 USD).
I personally bought my house used, but I can also understand why almost all of my neighbors chose to build new houses.
[1] https://www.shinseibank.com/english/housing/loan_kinri.pdf
That may be the case, but Tokyo sits on one of the most active seismic faults in the world.
Buildings need to be solid (actually, they are often built to jiggle around). Friends who were in Tokyo when they had that horrible Sendai earthquake, said looking out the window from the 20th floor was scary as hell, but the buildings were fine, afterwards.
Buildings need to be solid (actually, they are often built to jiggle around). Friends who were in Tokyo when they had that horrible Sendai earthquake, said looking out the window from the 20th floor was scary as hell, but the buildings were fine, afterwards.
I thought they were known for the 100yr mortgage. And multigenerational living/thinking.
That's all I've heard about.
That's all I've heard about.
They are also known for knocking down houses after 30 years[1]. Things are changing, though. It’s becoming more common to renovate and buy secondhand houses.
And multi-generational households are also becoming much less common [2].
> The percentage of multigenerational households has been halved over the past two decades, dropping from 50% to 24%
[1] https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...
[2] https://academic.oup.com/psychsocgerontology/article/62/5/S3...
And multi-generational households are also becoming much less common [2].
> The percentage of multigenerational households has been halved over the past two decades, dropping from 50% to 24%
[1] https://www.theguardian.com/cities/2017/nov/16/japan-reusabl...
[2] https://academic.oup.com/psychsocgerontology/article/62/5/S3...
Glosses over the real reasons, both high costs and cost overruns are incentivized.
Usually this money comes from outside sources, such as higher-level governments, but even when it is purely local, individual stakeholders may treat it as money coming from other parts of the city. In this environment, there is an incentive to demand extra scope in order to spend other people’s money on related but unnecessary priorities.
There is little reason to be efficient when spending other people’s money without their input or any long term consequences.
Usually this money comes from outside sources, such as higher-level governments, but even when it is purely local, individual stakeholders may treat it as money coming from other parts of the city. In this environment, there is an incentive to demand extra scope in order to spend other people’s money on related but unnecessary priorities.
There is little reason to be efficient when spending other people’s money without their input or any long term consequences.
Slightly different but I work in defense as a contractor and I usually summarize it as "being paid for work".
The incentive is to do the most work because being done early and under budget doesn't maximize $. Usually the market keeps these entities honest. Do shit work that's over budget and you lose business. But there is no market at play here, thus the govt needs to play the part of the market and penalize for this behavior but they do not. /Endrant
The incentive is to do the most work because being done early and under budget doesn't maximize $. Usually the market keeps these entities honest. Do shit work that's over budget and you lose business. But there is no market at play here, thus the govt needs to play the part of the market and penalize for this behavior but they do not. /Endrant
In other words - different business environments create different equilibria.
In Chinese/Soviet/1920s America equilibrium, with an insatiable demand for construction work, the profit maximizing behavior is to be done quickly in decent quality, then hop on to another project.
In the modern western equilibrium, where projects are few and far between, the profit maximizing behavior is to extract as much revenue as possible from any single project, employ lawyers, ask for extensions, attempt regulatory capture, create an opaque chain of subcontractors, etc. - as it's not clear whether there will be any new opportunity to do so in the future.
In Chinese/Soviet/1920s America equilibrium, with an insatiable demand for construction work, the profit maximizing behavior is to be done quickly in decent quality, then hop on to another project.
In the modern western equilibrium, where projects are few and far between, the profit maximizing behavior is to extract as much revenue as possible from any single project, employ lawyers, ask for extensions, attempt regulatory capture, create an opaque chain of subcontractors, etc. - as it's not clear whether there will be any new opportunity to do so in the future.
We have a winner!
Zooming out a bit, this is why low growth is self-reinforcing. We need constant heavy demand to drive continual investment and productivity improvements.
Zooming out a bit, this is why low growth is self-reinforcing. We need constant heavy demand to drive continual investment and productivity improvements.
Yes/no?
I mean I'm pretty sure there is massive demand for affordable housing (especially in Manhattan!) but there's no incentive for developers to shift towards that vs bilking the everyone out of as much as possible for more "high end" construction.
The current system "works" for the people taking in the money, which they can then use to lobby the people giving the contracts to continue the current paradigm.
As with most things related to capitalist enterprises I think the solution is pulling people kicking and screaming from their beds and dragging them to the gallows during a revolution, but that feels unlikely...
I mean I'm pretty sure there is massive demand for affordable housing (especially in Manhattan!) but there's no incentive for developers to shift towards that vs bilking the everyone out of as much as possible for more "high end" construction.
The current system "works" for the people taking in the money, which they can then use to lobby the people giving the contracts to continue the current paradigm.
As with most things related to capitalist enterprises I think the solution is pulling people kicking and screaming from their beds and dragging them to the gallows during a revolution, but that feels unlikely...
Alfred Chandler Jr described this as 'hidden unemployment'. The true social cost to society is high prices to support mostly inefficient jobs, this keeps people employed.
Well, you see, if you get the work done earlier and under budget, then the next time you'll be given stricter deadlines and less budget.
But if it's completed late and over budget, your company won't get the bid in the future because of your soiled reputation as long as there are enough competitors. Hence the reference to markets.
In a perfect world maybe, in practice I doubt it. It's just not very human-like to take a lot of risk in large projects. If IBM takes a big project and delivers it late and over budget, they still delivered it so they will likely be picked for another project with the same low-bidding strategy.
Exactly this.
I was at a "company retreat" back when I was in IT consulting. It was mostly the top salespeople for that year so I, being on the delivery side of things, found myself in a strange world. After some drinking one of the salespeople started talking about a project that went 2 months past the deadline. I asked "...and they just paid for that extra time?"
Everyone got all awkward as I realized that not only did they pay for that, they would continue to pay us to go over deadline. I was the naive one. It's just one of those topics you don't talk about.
I was at a "company retreat" back when I was in IT consulting. It was mostly the top salespeople for that year so I, being on the delivery side of things, found myself in a strange world. After some drinking one of the salespeople started talking about a project that went 2 months past the deadline. I asked "...and they just paid for that extra time?"
Everyone got all awkward as I realized that not only did they pay for that, they would continue to pay us to go over deadline. I was the naive one. It's just one of those topics you don't talk about.
This is basically part of the thesis that Alon Levy is presenting here. Essentially, the reason for the high costs is that the government lacks the management ability to recognize that the bids coming in are unreasonably low-balled, combined with subsequent difficulties actually overseeing the construction process.
Typically it’s a rule introduced by naive politicians who say you have to take the lowest bid. In Britain this came top down from central government in the 1980s, previously it was more typical to take the bid closest to the average across of a minimum of three bids.
Even if the government has the ability to properly manage the process it does not bring it to bear because both the government bureaucracy and the contractor benefit from the waste of resources.
The larger the amount of taxpayer money that is being spent the more opportunity for a larger more powerful bureaucracy to oversee the spending and more opportunity for profit by the contractor.
The same mutually beneficial waste exists at the contractor to labor unions interface (union drives up cost, more $$ for them, contractor passes on cost, more $$ for them) and at beureaucracy to politician and appointed administrator interface (bigger bureaucracy more resources go to it and more power for the administrating officials).
The only loser in the whole deal is the taxpayer who has to pay more for less.
The larger the amount of taxpayer money that is being spent the more opportunity for a larger more powerful bureaucracy to oversee the spending and more opportunity for profit by the contractor.
The same mutually beneficial waste exists at the contractor to labor unions interface (union drives up cost, more $$ for them, contractor passes on cost, more $$ for them) and at beureaucracy to politician and appointed administrator interface (bigger bureaucracy more resources go to it and more power for the administrating officials).
The only loser in the whole deal is the taxpayer who has to pay more for less.
And for projects internal to companies, there is usually no market or bidding (last time I heard of, anyway): here's the department's budget, go and deliver. You didn't manage to spend all of it? Next quarter, we're cutting your budget, and giving you a bigger project. Oh no, now you've overspent? Well, that's your fault really.
As the proverbial wisdom goes, "to improve a dairy's profits you'd need the cows to give more milk and eat less food, so feed them less and milk more often".
As the proverbial wisdom goes, "to improve a dairy's profits you'd need the cows to give more milk and eat less food, so feed them less and milk more often".
NYC is unusual.
Manhattan is mostly solid bedrock, for one.
Thus the time it takes to create tunnels below all the pipeworks cannot be overlooked, as it’s a very noisy endeavor.
Also, the NYC subway system is (or was, pre-covid) 24 hours, extensive, and was forward thinking.
The grates and vents you see today sidesteps the heat trapping of, say, the Tube (London).
It’s also built robustly because honestly, the riders abuse every feature.
Manhattan is mostly solid bedrock, for one.
Thus the time it takes to create tunnels below all the pipeworks cannot be overlooked, as it’s a very noisy endeavor.
Also, the NYC subway system is (or was, pre-covid) 24 hours, extensive, and was forward thinking.
The grates and vents you see today sidesteps the heat trapping of, say, the Tube (London).
It’s also built robustly because honestly, the riders abuse every feature.
This is classic bad NY exceptionalism (and I'm living in NY as I write this!)
- Bedrock is easier
- Every city has pipes. Including NYC when they did cut and cover.
- Arguably the 1930s IND started the trend of overbuilding. Being redundant with existing lines to drive out an already money-loosing bussiness isn't forward-thinking.
- The grates and vents and easier precisely because cut and cover.
- Elsewhere people abuse every feature less? More like the NYC subway is not in a state of good repair so the normal wear and tear is more visible.
- Bedrock is easier
- Every city has pipes. Including NYC when they did cut and cover.
- Arguably the 1930s IND started the trend of overbuilding. Being redundant with existing lines to drive out an already money-loosing bussiness isn't forward-thinking.
- The grates and vents and easier precisely because cut and cover.
- Elsewhere people abuse every feature less? More like the NYC subway is not in a state of good repair so the normal wear and tear is more visible.
- I’ll take your word for it, but building above ground seems easier.
- NYC is old. We still have steam pipes in active use, and it predates the subway. Also, asbestos. Nor is every city at the same scale.
- How do you quantify the amount of tax money that comes in, because the subway enables business? Home taxes are very low in NYC, because of the amount of money generated from business.
Rent is high near any station, unless it’s a completely run down neighborhood.
It also enables immigrants and students in a way that car-heavy cities can’t match. I know because I was this immigrant and student.
We don’t have the problem SF does, as less desirabke neighborhoods are affordable by teachers and nurses. - You know what vents attract? Trash. If not cleaned out it becomes a fire hazard.
- Abuse: Absolutely. DC and Boston trains are pristine by comparison, and I’ve ridden trains and railways in Japan.
New York is by far the worst, for many reasons.
It was even worse in the 70s and 80s, and the mindset never wentvaway.
- NYC is old. We still have steam pipes in active use, and it predates the subway. Also, asbestos. Nor is every city at the same scale.
- How do you quantify the amount of tax money that comes in, because the subway enables business? Home taxes are very low in NYC, because of the amount of money generated from business.
Rent is high near any station, unless it’s a completely run down neighborhood.
It also enables immigrants and students in a way that car-heavy cities can’t match. I know because I was this immigrant and student.
We don’t have the problem SF does, as less desirabke neighborhoods are affordable by teachers and nurses. - You know what vents attract? Trash. If not cleaned out it becomes a fire hazard.
- Abuse: Absolutely. DC and Boston trains are pristine by comparison, and I’ve ridden trains and railways in Japan.
New York is by far the worst, for many reasons.
It was even worse in the 70s and 80s, and the mindset never wentvaway.
- Building above ground is easier. But if you're building below ground, bedrock is easier than e.g. alluvial soil or sandy soil. https://pedestrianobservations.com/2020/11/23/more-on-statio...
- NYC is a brand new city compared to pretty much everywhere but the American West. We're talking about comparisons to Rome here, not comparisons to LA. And Rome is about 3x cheaper to build in than LA, which is about 3x cheaper than NYC. https://transitcosts.com/what-does-the-data-say/
- NYC is a brand new city compared to pretty much everywhere but the American West. We're talking about comparisons to Rome here, not comparisons to LA. And Rome is about 3x cheaper to build in than LA, which is about 3x cheaper than NYC. https://transitcosts.com/what-does-the-data-say/
NYC is NOT old, the compare cites have been around for thousands of years.
Every problem you list exists in every other city in the world. The details are different, but the problem is there.
Every problem you list exists in every other city in the world. The details are different, but the problem is there.
It’s one of the oldest cities with modern amenities.
When Rome builds its line into the heart of the city, they dig down very deep; where it’s unlikely that any ancient artifacts will be found.
Meanwhile NYC has 7.4k miles of sewage lines and a lot of unknowns: https://www.bloomberg.com/news/features/2017-08-10/nobody-kn...
This isn’t meant to be a dick measuring contest, just that it’s a city that wasn’t really planned and so progress is painfully slow.
https://opendata.cityofnewyork.us/projects/open-sewer-atlas-...
Yes, there’s a lot of graft, turf battles, and so on but then has its own unique set of infrastructure challenges.
Then you have building collapses due to age or shoddy workmanship; not related to boring, but clearly a concern as they extend the line: https://ny.curbed.com/2015/3/26/9976560/explosion-leads-to-b...
NYC is dense and in Manhattan especially there’s no real business district vs residential.
It’s like code that is legacy and heavily used, with very powerful stakeholders. Retrofitting takes a lot of work and red tape.
When Rome builds its line into the heart of the city, they dig down very deep; where it’s unlikely that any ancient artifacts will be found.
Meanwhile NYC has 7.4k miles of sewage lines and a lot of unknowns: https://www.bloomberg.com/news/features/2017-08-10/nobody-kn...
This isn’t meant to be a dick measuring contest, just that it’s a city that wasn’t really planned and so progress is painfully slow.
https://opendata.cityofnewyork.us/projects/open-sewer-atlas-...
Yes, there’s a lot of graft, turf battles, and so on but then has its own unique set of infrastructure challenges.
Then you have building collapses due to age or shoddy workmanship; not related to boring, but clearly a concern as they extend the line: https://ny.curbed.com/2015/3/26/9976560/explosion-leads-to-b...
NYC is dense and in Manhattan especially there’s no real business district vs residential.
It’s like code that is legacy and heavily used, with very powerful stakeholders. Retrofitting takes a lot of work and red tape.
It is one of the youngest cities with subways.
> It’s one of the oldest cities with modern amenities.
That feels kinda arbitrary, what's considered a modern amenity, good Internet access? Public transport?
Having no clue what's below a city is really not that unique to NYC. If Rome can dig past it, why can't NYC?
> This isn’t meant to be a dick measuring contest, just that it’s a city that wasn’t really planned and so progress is painfully slow.
Which is, again, not unique to NYC. Urban planing as the proper academic field, we know it today, only emerged in the early 1900s.
That's not to deny that every place has its own unique challenges and issues, but that doesn't mean they are inherently unsolvable.
That feels kinda arbitrary, what's considered a modern amenity, good Internet access? Public transport?
Having no clue what's below a city is really not that unique to NYC. If Rome can dig past it, why can't NYC?
> This isn’t meant to be a dick measuring contest, just that it’s a city that wasn’t really planned and so progress is painfully slow.
Which is, again, not unique to NYC. Urban planing as the proper academic field, we know it today, only emerged in the early 1900s.
That's not to deny that every place has its own unique challenges and issues, but that doesn't mean they are inherently unsolvable.
When people compare costs of building, they tend to compare to other large old cities like london, madrid, etc which still beat out NYC by a mile.
I feel like solid bedrock is actually a perfect soil type for engineering. Other towns has to account for moving sandy or clay soils, diverting or pumping out their ground waters (sometimes it's even easier to actively freeze large areas of land).
Precisely. Here in Prague, the subterranean geology is horrible. Broken rock, cavities, a lot of river deposits, unexpected (and rich) water springs. Not to mention a thick layer of shit dating from 1350 to approximately 1800 along a former ditch that separated the Old Town from the New Town and that served as a latrine for thirty generations of burghers.
Building subway tunnels in such conditions is an equivalent of Olympic Games for engineers.
Building subway tunnels in such conditions is an equivalent of Olympic Games for engineers.
Plenty of subways get built in bedrock. Its a bit more expensive to tunnel, but not unusual at all. It’s not so easy to use tunnel boring machines, but you can blast. Its also possible to make station caverns right in the rock.
Btw, the tunnels aren’t the biggest cost of subway systems. Maybe 15-30%. I think the biggest tickets are usually the stations.
Btw, the tunnels aren’t the biggest cost of subway systems. Maybe 15-30%. I think the biggest tickets are usually the stations.
As pointed out in part 2, the 2nd Avenue stations are grotesquely large. Sure they are pretty but I’d rather have 4x ugly stations.
Large stations are not just unnecessarily expensive, they usually take longer to walk through. Looks nice on opening day, and then a hundred thousand people waste an extra 2 minutes every single day forever.
I'd rather have quad tracks. easier to keep things running 24/7.
I'm not sure if underground blasting is a good idea when there are skyscrapers nearly a century old aboveground. Hard enough to assume recent building haven't had someone in the loop cutting corners (e.g. concrete that isn't as robust as expected), the old stuff had zero checks during constructions and definitely no computer aided simulations.
Honestly it's a miracle that skyscraper collapses are so rare.
Honestly it's a miracle that skyscraper collapses are so rare.
It's really not a problem. Controlled blasting around vulnerable or weak structures is well studied and practiced by professionals. Computer aided design and modeling has only gotten better over the years.
NYC in particular has some very stringent regulations regarding blasting, allowable vibration levels, and so on. Long gone are the days of gung-ho cowboys lighting off fuses leading to piles of dynamite, massive fireballs, and the like.
Example reading: https://core.ac.uk/download/pdf/229071708.pdf
https://www.researchgate.net/publication/328666110_Large_str...
https://www.researchgate.net/publication/297751622_Strains_I...
https://www.researchgate.net/publication/315527348_Reducing_...
E: Trying to find a paper about blasting a road tunnel in Turkey under some ancient ruins. The stringent restrictions they were under and the things they did to maintain compliance were really, really interesting (as a blasting engineer) but I can't find the damn thing right now.
NYC in particular has some very stringent regulations regarding blasting, allowable vibration levels, and so on. Long gone are the days of gung-ho cowboys lighting off fuses leading to piles of dynamite, massive fireballs, and the like.
Example reading: https://core.ac.uk/download/pdf/229071708.pdf
https://www.researchgate.net/publication/328666110_Large_str...
https://www.researchgate.net/publication/297751622_Strains_I...
https://www.researchgate.net/publication/315527348_Reducing_...
E: Trying to find a paper about blasting a road tunnel in Turkey under some ancient ruins. The stringent restrictions they were under and the things they did to maintain compliance were really, really interesting (as a blasting engineer) but I can't find the damn thing right now.
Second ave has little in the way of skyscrapers. It’s mostly residential and small shops.
But consider that tunnels are created through mountains (far heavier). Done right, I doubt it’s an issue.
But consider that tunnels are created through mountains (far heavier). Done right, I doubt it’s an issue.
They’re not built for the same capacity, however.
Ironically I think the city may shrink in the coming years, thanks to Covid and the upcoming fiscal crisis.
Ironically I think the city may shrink in the coming years, thanks to Covid and the upcoming fiscal crisis.
OT: I’ve often thought the easiest way to alleviate the MTA’s load would be to make it affordable/desirable to live near work. It seems unnecessary and painful to have to commute ~1hr from one side of the city to the other especially when the city can’t afford the metro system.
It'd be interesting to see a breakdown of a private mega-project (i.e. office/residential skyscraper) in NYC versus any other urban metro in the rest of the world to compare it to these public works mega-project. Is it mostly more labor costs, general technical challenges, bad project management, general corruption, etc.?
The section discussing (inter/intra)agency turf battles reminded me of a recent article discussing how the pandemic has led to some significant reevaluation of what the role and purpose of traditional "commuter rail" is within public transit as a whole (particularly focusing on the MBTA/Boston, contrasting the quote from Frank DePaola):
https://www.governing.com/now/taking-the-commuter-out-of-ame...
https://www.governing.com/now/taking-the-commuter-out-of-ame...
Yes American computer rail service is a complete scourge.
It's a regressive sop to white fighters and their posh descendents.
It simply begets more car culture, a band-aid that hides scaling limitations where they are most salient.
It's a self-defeating honey-pot that soaks up the political will for transit in something that will never get broad traction.
It's a regressive sop to white fighters and their posh descendents.
It simply begets more car culture, a band-aid that hides scaling limitations where they are most salient.
It's a self-defeating honey-pot that soaks up the political will for transit in something that will never get broad traction.
Maybe try having some compassion for white America, and try to see the race riots of the 1960's that destroyed the cities their grandparents built from their perspective. Demonizing an entire ethnic group would not be tolerated if any other group were being attacked. Honestly this is probably just flame bait. Never mind.
An extreme example: 1 mile of subway in San Francisco cost just over 1 billion dollars to build. The central subway was a 1.7 mile long subway extension that recently finished construction:
"Total cost overrun, largely driven by the claims settlement, three change order omnibus packages, contingency reserves and additional project management and other services, puts the final cost at $1.89 billion and sticks SFMTA with a $184 million deficit for this single project alone."
https://www.sfexaminer.com/news/major-construction-on-centra...
"Total cost overrun, largely driven by the claims settlement, three change order omnibus packages, contingency reserves and additional project management and other services, puts the final cost at $1.89 billion and sticks SFMTA with a $184 million deficit for this single project alone."
https://www.sfexaminer.com/news/major-construction-on-centra...
In Seattle we paid $3.4 billion for a 1.7 mile tunnel (https://www.seattletimes.com/seattle-news/berthas-woes-grind...). Construction began in 2013 and it was supposed to open in 2015 but didn’t until 2019. It replaced a 4 lane elevated highway on the waterfront, which gave all drivers beautiful views, with an underground 4 lane highway that gave waterfront property owners a big boost in value, while relegating everyone else to views of subterranean walls. Somehow our local government saw this project as value for our money.
Costs aside, lets not pretend the viaduct was removed just to improve property values. The thing was a ticking time bomb that would have killed dozens or hundreds of people the next time a moderately sized earthquake hit, to say nothing of the cost of cleaning up the damage and replacing it.
Speaking a somebody who lived in the area both before and after the demolition (not a property owner), the whole place is just so much more beautiful. Some commuters may have lost a view, but what they lost pedestrians all over the area gained. Even outside of the waterfront itself, the view from the street level in the adjoining neighborhoods is gorgeous now.
Speaking a somebody who lived in the area both before and after the demolition (not a property owner), the whole place is just so much more beautiful. Some commuters may have lost a view, but what they lost pedestrians all over the area gained. Even outside of the waterfront itself, the view from the street level in the adjoining neighborhoods is gorgeous now.
> The thing was a ticking time bomb that would have killed dozens or hundreds of people the next time a moderately sized earthquake hit, to say nothing of the cost of cleaning up the damage and replacing it.
It could have been replaced with a much cheaper and safer viaduct, instead of a tunnel boondoggle that was way too expensive.
It could have been replaced with a much cheaper and safer viaduct, instead of a tunnel boondoggle that was way too expensive.
New York is definitely not representative of America in the sense that NYC Unions have a true strangle-hold on labor and logistics costs in the city unlike most other places. (I think NYC is likely #1 in the free world for distorted construction markets because of this) As an architect living in NYC, I was shocked by how blatant this control was, how unaccountable labor was during construction, and the killing of a great pioneer project with modular construction because the modules weren't built in the city for example.)
This title is too generalized , it’s not talking about ‘American construction’ . It’s talking about American large-scale civic construction in large metropolitan areas.
Agreed, I came in ready to argue that US residential construction was positively cheap compared to much of the OECD!
It's a transit blog
This is woefully lacking in context. The Second Avenue subway in particular was proposed more than a hundred years ago and at that time the proposal was considered to be far more expensive than could possibly make sense. Over and over again the proposal came back up and got shot down again because of the expense. By the time New York actually committed to building the Second Avenue subway there was roughly a hundred years of literature going in detail into why the project was simply to complicated and costly to ever make sense.
So then they actually built it and if you can actually imagine this it turned out to be so expensive it didn't necessarily make sense. But instead of referring to the hundred or so years of detailed documentation of this problem neophyte analysts descend and make what they think is a detailed comparison of costs when in fact they should have been examining the many complications faced by this extremely complex project. Ultimately this analysis is drug down by the weight of their failure to comprehend the Second Avenue subway alone because of the huge scale of that project and the complications that it faced.
This is like looking at per seat construction costs of the Airbus 380 and deciding that something strange must have gone on to make it cost more per seat than a basic small scale commuter aircraft.
So then they actually built it and if you can actually imagine this it turned out to be so expensive it didn't necessarily make sense. But instead of referring to the hundred or so years of detailed documentation of this problem neophyte analysts descend and make what they think is a detailed comparison of costs when in fact they should have been examining the many complications faced by this extremely complex project. Ultimately this analysis is drug down by the weight of their failure to comprehend the Second Avenue subway alone because of the huge scale of that project and the complications that it faced.
This is like looking at per seat construction costs of the Airbus 380 and deciding that something strange must have gone on to make it cost more per seat than a basic small scale commuter aircraft.
Sure, but they finally got the current part done because it was worth it - at seven times the cost to do a similar capacity tunnel in Spain. If NYC could control their costs a little better there are a lot of tunnels that right not are not worth it that would be obviously worth doing.
This is my bread and butter; and honestly, the entire issue is engineering (or lack thereof). That is not that you have bad engineering, but more the oversight into the level of engineering is where things fall over. The article notes specific example of "low-bid" contractors demanding change notices. That isn't a function of a low bid contractor, that is an issue with the specifications and quality of engineering they are building too. A lot of the issues the US faces are related to soil conditions! Nowhere in the article is there a note that soil conditions are the biggest factor in tunneling costs. When we back up a little too, large infrastructure in the US is very political. The government doesn't deal with "project management" to ensure a project comes in on time and budget, they deal with yearly budget allocations - thats it! So the entire management ethos on public works is so drastically different you can't even compare. Anyway, stoked to see the discussion about construction here.
Short answer: legalized corruption.
Waste and overrun are not problems, they are the whole point of the endeavor. It is the opportunity to direct those into chosen pockets that motivates the stakeholders. The project itself amounts to legal cover, similarly to real estate now used for international money laundering. It looks like a real project, and something comes out at the end, but the majority of the money moved is just dollars shuffled from public purse to private.
It's all legal, so no risk of indictments. The US is the world leader in legalized corruption.
Waste and overrun are not problems, they are the whole point of the endeavor. It is the opportunity to direct those into chosen pockets that motivates the stakeholders. The project itself amounts to legal cover, similarly to real estate now used for international money laundering. It looks like a real project, and something comes out at the end, but the majority of the money moved is just dollars shuffled from public purse to private.
It's all legal, so no risk of indictments. The US is the world leader in legalized corruption.
Since I came to live in America I have been constantly shocked by how much different contractors are trying to screw you up. The spread in quotes can easily be as much as 5 times from the (already expensive) cheapest to the most expensive ones, with what I am guessing is the majority of contractors high balling and trying to score easy money. I dread the upcoming weeks of negotiations every time I need to get anything fixed around the house.
[deleted]
Take a peek at the Honolulu Rail Transit project on O'ahu. Boondoggle plagued with fraud, waste and abuse.
Regarding station costs: can you include opportunity cost into your analyses? Maybe NYC is just far more economically productive than Paris, like if there are 50 story buildings all along that block, vs 5 story buildings in Paris...couldn't the cost even out because NYC is trying to diminish the disruption to local economy? Also hard to measure, but what are the QoL diffs between the two station methods, is one louder and more disruptive?
I'm also wondering about technological differences. Can stations be constructed in a more modular fashion, can innovation occur to allow cheaper builds? And what about using more advanced tech in boring machines, like what TBC is trying in Vegas?
Lastly, do we think a lot of stations is truly optimal? I don't know trains well, but if we get a fleet of SDCs in 20 years, maybe these can reduce station numbers by shuttling passengers their last mile or two, rather than building out billions of extra dollars of stations?
I'm also wondering about technological differences. Can stations be constructed in a more modular fashion, can innovation occur to allow cheaper builds? And what about using more advanced tech in boring machines, like what TBC is trying in Vegas?
Lastly, do we think a lot of stations is truly optimal? I don't know trains well, but if we get a fleet of SDCs in 20 years, maybe these can reduce station numbers by shuttling passengers their last mile or two, rather than building out billions of extra dollars of stations?
Outside of Manhattan this is unlikely, Paris is much denser than NYC and the difference in GDP or however you want to measure economic productivity is too small to make much of a difference.
Google puts NY GDP at 1.75T, and Paris GDP at 785M (in USD).
So more than double?
So more than double?
NY metro population is 18.3 million, Paris 12.3 million. So NY's per-capita is about 50% higher.
This point the author makes is an interesting observation:
9. Institutions part 3: global incuriosity
The eight above factors all explain why American infrastructure costs are higher than in the rest of the world, and also explain high costs in some other countries, especially Canada. However, one question remains: how come Americans aren’t doing anything about it? The answer, I believe, has to do with American incuriosity.
Incuriosity is not merely ignorance. Ignorance is a universal trait, people just differ in what they are ignorant about. But Americans are unique in not caring to learn from other countries even when those countries do things better. American liberals spent the second Bush administration talking about how health care worked better in most other developed countries, but displayed no interest in how they could implement universal health care so that the US could have what everyone else had, even when some of these countries, namely France and Israel, had only enacted reforms recently and had a population of mostly privately-insured workers. In contrast, they reinvented the wheel domestically, coming up with the basic details of Obamacare relying on the work on domestic thinktanks alone. The same indifference to global best practices occurs in education, housing policy, and other matters even among wonks who believe the US to be behind.
This is not merely a problem in public policy. In the private sector, the same problem doomed the American auto industry. American automakers have refused to adopt the practices of Japanese and German competitors even after the latter produced small cars better suited for post-1973 oil prices. They instead dug in, demanded and got government protection, and have been in effect wards of the American federal government for about 40 years.
9. Institutions part 3: global incuriosity
The eight above factors all explain why American infrastructure costs are higher than in the rest of the world, and also explain high costs in some other countries, especially Canada. However, one question remains: how come Americans aren’t doing anything about it? The answer, I believe, has to do with American incuriosity.
Incuriosity is not merely ignorance. Ignorance is a universal trait, people just differ in what they are ignorant about. But Americans are unique in not caring to learn from other countries even when those countries do things better. American liberals spent the second Bush administration talking about how health care worked better in most other developed countries, but displayed no interest in how they could implement universal health care so that the US could have what everyone else had, even when some of these countries, namely France and Israel, had only enacted reforms recently and had a population of mostly privately-insured workers. In contrast, they reinvented the wheel domestically, coming up with the basic details of Obamacare relying on the work on domestic thinktanks alone. The same indifference to global best practices occurs in education, housing policy, and other matters even among wonks who believe the US to be behind.
This is not merely a problem in public policy. In the private sector, the same problem doomed the American auto industry. American automakers have refused to adopt the practices of Japanese and German competitors even after the latter produced small cars better suited for post-1973 oil prices. They instead dug in, demanded and got government protection, and have been in effect wards of the American federal government for about 40 years.
> American liberals spent the second Bush administration talking about how health care worked better in most other developed countries, but displayed no interest in how they could implement universal health care so that the US
The Right would never allow that.
> In contrast, they reinvented the wheel domestically, coming up with the basic details of Obamacare relying on the work on domestic thinktanks alone.
Obamacare is based on Romneycare, Massachusetts's health care reform under Mitt Romney (R)'s governorship.
The Right would never allow that.
> In contrast, they reinvented the wheel domestically, coming up with the basic details of Obamacare relying on the work on domestic thinktanks alone.
Obamacare is based on Romneycare, Massachusetts's health care reform under Mitt Romney (R)'s governorship.
This is going to sound funny, but I saw a video on TikTok last night where a guy in the construction industry was saying that material producers for construction are price gouging right now.
Even if it is so, you don't get it much cheaper when 60%-70% percent of a single family home is land.
Going from expensive to ridiculously cheap in construction methods will only mean shaving $100k-$150k from a $1m home.
Going for extra-cheap interiors will probably save more for house in such price range.
The real solution is to rehouse America in highrise appartments.
This way, you can get up 100 fold land price reduction.
Going from expensive to ridiculously cheap in construction methods will only mean shaving $100k-$150k from a $1m home.
Going for extra-cheap interiors will probably save more for house in such price range.
The real solution is to rehouse America in highrise appartments.
This way, you can get up 100 fold land price reduction.
There’s very few homes in America where land is 60% of the property value.
Then, there is more runway there. But still...
Foundation work is not going anywhere on any construction method except for smallest homes.
Framework work is probably easiest to eliminate, but you will still have to count one most basic.
Even if you have 4 fold work hours reduction, and 2-3 fold in materials you save $300k on a $1m home, and end up with a very basic house.
Apartments are better than trying to improve upon a single family home.
Foundation work is not going anywhere on any construction method except for smallest homes.
Framework work is probably easiest to eliminate, but you will still have to count one most basic.
Even if you have 4 fold work hours reduction, and 2-3 fold in materials you save $300k on a $1m home, and end up with a very basic house.
Apartments are better than trying to improve upon a single family home.
No show jobs ???.
Tl;dr anyone?
I'm guessing it's something to do with the US dollar being overvalued.
I'm guessing it's something to do with the US dollar being overvalued.
The article has very good headers that you could scan in < 15 seconds, no guessing required.
1. Engineering part 1: station construction methods
2. Engineering part 2: mezzanines
3. Management part 1: procurement
4. Management part 2: conflict resolution
5. Management part 3: project management
6. Management part 4: agency turf battles
7. Institutions part 1: political lading with irrelevant priorities
8. Institutions part 2: political incentives
9. Institutions part 3: global incuriosity
1. Engineering part 1: station construction methods
2. Engineering part 2: mezzanines
3. Management part 1: procurement
4. Management part 2: conflict resolution
5. Management part 3: project management
6. Management part 4: agency turf battles
7. Institutions part 1: political lading with irrelevant priorities
8. Institutions part 2: political incentives
9. Institutions part 3: global incuriosity
No that isn't one of the reasons given.
The bigger reasons are: a) US unwillingness to learn best practices from other countries about how to keep costs of construction down, especially for public transit infrastructure. b) US builds much bigger + fancier stations for the trains compared to other countries, which drives up cost c) US procurement is done based on cost alone, which leads to frequent cost overruns and delays. d) a lack of internal managerial competence and instead relying frequently on costly external consultants e) bad political incentives
The bigger reasons are: a) US unwillingness to learn best practices from other countries about how to keep costs of construction down, especially for public transit infrastructure. b) US builds much bigger + fancier stations for the trains compared to other countries, which drives up cost c) US procurement is done based on cost alone, which leads to frequent cost overruns and delays. d) a lack of internal managerial competence and instead relying frequently on costly external consultants e) bad political incentives
Well, thank you.
The reliance on external "consultants" seems like a cabal, much like the ones you find in the Pakistani army. How rampant is corruption in the states?
The reliance on external "consultants" seems like a cabal, much like the ones you find in the Pakistani army. How rampant is corruption in the states?
Municipal governments in the US tend to be incredibly corrupt, and consultants are generally the vectors of that. Not as bad as India or Pakistan, but definitely worse than every other “western” country. Most municipal governments in large cities are overwhelmingly left-leaning, which means the elections aren’t really competitive and politicians can be as corrupt as they want (do nothing jobs for relatives, pick and choose which developers are allocated which land, arbitrarily deny permits, etc) with no repercussions. The party exists to play kingmaker and drive turnout for the general elections.
The only thing that’s starting to change is that far-left parties are having some success at the local level. My city has multiple city council members who ran under a socialist party, which would have been completely unheard of 10 years ago.
The only thing that’s starting to change is that far-left parties are having some success at the local level. My city has multiple city council members who ran under a socialist party, which would have been completely unheard of 10 years ago.
Are you suggesting that far left politicians are less corrupt?
I'd expect most challenger parties to be less corrupt than an incumbent party that had held power for a long time, at least for a while, and maybe for a long while if their hold on power remains more tenuous than the incumbents' had been. I'd expect this to be especially true at the local level, where the money involved in running a challenger party operation and campaign is unlikely to be high enough to support much corruption before office is taken.
Currently, yes, that is the dynamic. They take special pride in not accepting money from corporations, lobbyists, big real estate, etc and the politician to lobbyist to consultant pipeline is the main center of corruption in the country today. For example, Jim Crowley is now a highly paid consultant for Squier Patton Boggs.
In other times and places that may not have been the case but right now, the far left is noticeably less corrupt than the center or the right.
In other times and places that may not have been the case but right now, the far left is noticeably less corrupt than the center or the right.
The problem with the new far left (and new politicians in general) is they are corrupt for power, whereas the swamp is corrupt for money.
I’m not even sure what this means? Power politics aren’t “corrupt”, they’re just politics. The power determines who gets the money / resources; in the case of the far-left that generally ends up being the working class. Things have been out of balance for so long there is a lot of sentiment in favor of wealth distribution right now. The power is a means to an end.
And how is the opposition not supposed to appear desirous of more power?
Than the Democratic Party? Absolutely; the far-left politicians tend to be idealists explicitly foregoing the deep power / money networks that the DNC provides. Which is why they don’t have much success at the state / federal level.
[deleted]
It's probably fair to say most "outside" candidates would be less corrupt than someone entrenched in the existing political structure. But also anecdotally, in the US the more moderate liberal part of the left doesn't care much about corruption, but the farther left socialist part does a lot because they see it as a roadblock to gaining power. Anyone currently in power wouldn't be as concerned about corruption because they actively benefit from it
external consultants can be good or bad. There are always things you can't do yourself. Anyone reading this could grab a shovel and dig a subway - it is obvious that you won't get very far alone before you die, those who are lucky will die of old age, while the rest of us not knowing how to tunnel safety will dig in a tunnel collapse. However I gave you a budget you can hire experts in safely digging tunnels fast. Likewise, I can' draw a line on the map and say we should go here, but I need lots of consultants to make it reality: geologists to tell me if the soil will work, engineers to ensure that the train fits in the tunnel (curves), different engineers to ensure that the tunnel walls are thick enough to last (in turn advised by the geologists), and so on.
The problem is there are useful consultants, and consultants that charge you a lot of money for things that you want but don't really need. You need to reign in the later, or decide that they are worth spending on - your choice. I personally would prefer a small utilitarian station, but maybe you think the most expensive stations in the world are worth the cost.
The problem is there are useful consultants, and consultants that charge you a lot of money for things that you want but don't really need. You need to reign in the later, or decide that they are worth spending on - your choice. I personally would prefer a small utilitarian station, but maybe you think the most expensive stations in the world are worth the cost.
Reliance on external management was exactly what saved the Green Line extension.
The article lacks precision in the fact that it's not necessarily "American" construction costs, so much as "why are construction costs in large American cities so costly". DC, NYC, LA, SF are not representative of how infrastructure projects are pursued in the rest of the country.
We know very well that there are orders of magnitude more bureaucratic obstacles, as well as dramatically higher labor costs, when comparing any building project conducted in Texas vs. California. New York City's municipal projects are widely-known to have dramatically inflated labor costs due to various factors, not limited to rampant corruption within unionized labor. I'm a supporter of labor unions, but a minority of unions give the majority a bad name by allowing themselves to be used as tools to enrich corrupt officials. European unions seem to be far, far less susceptible to these kinds of grifters.
There are certainly issues at the federal level as well with metrics for funding allocation, but let's not pretend that building large infrastructure in states with lower regulations is remotely as expensive as in places like California which have ridiculous levels of red tape and NIMBY empowerment. (Understood that construction in California has to take into account earthquake mitigation, but it isn't remotely enough to explain the cost deltas.)
We know very well that there are orders of magnitude more bureaucratic obstacles, as well as dramatically higher labor costs, when comparing any building project conducted in Texas vs. California. New York City's municipal projects are widely-known to have dramatically inflated labor costs due to various factors, not limited to rampant corruption within unionized labor. I'm a supporter of labor unions, but a minority of unions give the majority a bad name by allowing themselves to be used as tools to enrich corrupt officials. European unions seem to be far, far less susceptible to these kinds of grifters.
There are certainly issues at the federal level as well with metrics for funding allocation, but let's not pretend that building large infrastructure in states with lower regulations is remotely as expensive as in places like California which have ridiculous levels of red tape and NIMBY empowerment. (Understood that construction in California has to take into account earthquake mitigation, but it isn't remotely enough to explain the cost deltas.)
>We know very well that there are orders of magnitude more bureaucratic obstacles, as well as dramatically higher labor costs, when comparing any building project conducted in Texas vs. California. New York City's municipal projects are widely-known to have dramatically inflated labor costs due to various factors, not limited to rampant corruption within unionized labor.
Please read the actual link. This simply isn't an issue the way you think it is. "It's the unions" is simply being intellectually lazy because it fits your preconceived notions.
"I am not overlooking union power, I believe it is not an important factor, not when right-to-work US states have very high construction costs too while Scandinavia has low costs."
The problem is the quantity of labor. In the US we use many more people to operate a TBM vs what they'd use in Europe. On commuter rail lines we pay conductors $100k a year to collect tickets when in Europe they'd use a ticket machine. On the NYC subway they have a driver and a conductor when in Europe they'd only have a driver at best, or even some lines are being made driverless I believe. They're trying that in NYC too but it's complicated and costly because of how old the signaling system is, because it was too costly to ever upgrade.
The agencies should focus less during union negotiations on keeping salaries and benefits down and more on reducing the quantity of required workers. If they were able to do it in Europe, they can certainly do it here.
Please read the actual link. This simply isn't an issue the way you think it is. "It's the unions" is simply being intellectually lazy because it fits your preconceived notions.
"I am not overlooking union power, I believe it is not an important factor, not when right-to-work US states have very high construction costs too while Scandinavia has low costs."
The problem is the quantity of labor. In the US we use many more people to operate a TBM vs what they'd use in Europe. On commuter rail lines we pay conductors $100k a year to collect tickets when in Europe they'd use a ticket machine. On the NYC subway they have a driver and a conductor when in Europe they'd only have a driver at best, or even some lines are being made driverless I believe. They're trying that in NYC too but it's complicated and costly because of how old the signaling system is, because it was too costly to ever upgrade.
The agencies should focus less during union negotiations on keeping salaries and benefits down and more on reducing the quantity of required workers. If they were able to do it in Europe, they can certainly do it here.
Your response was well-reasoned and thought out, and I certainly wasn't TRYING to imply it was mostly unions.
But having done work in the past to do detailed analysis for the WMATA (they run the DC metro system) on various understaffing issues, the unions do contribute to issues with operations and maintenance. I will not and cannot comment on their issues with construction of the Silver Line.
But as far as maintenance, the unions (they do the same for BART by the way) constrain hiring the proper number of maintenance techs, so that the employed techs get large quantities of overtime pay. A single person working 12 hours a day ends up costing the same as two people working 8 hour days, but is definitely not going to be able to keep up with repairs, resulting in the constant broken escalators and elevators and out of commission tracks that have plagued WMATA increasingly since the late 2000's.
Reducing the quantity of workers when negotiating with an entrenched union is very, very difficult to do. They tend to want to keep the same quantity, or very slowly increase the quantity. This is very well documented behavior that is covered extensively in the book "The Machine That Changed the World", which was the first book documenting Toyota's journey with LEAN manufacturing, and then talking about the challenges GM faced with their unions when trying to implement these same practices.
All that being said, you were correct to poke holes in my statement and you added to the conversation significantly, so thank you for that.
But having done work in the past to do detailed analysis for the WMATA (they run the DC metro system) on various understaffing issues, the unions do contribute to issues with operations and maintenance. I will not and cannot comment on their issues with construction of the Silver Line.
But as far as maintenance, the unions (they do the same for BART by the way) constrain hiring the proper number of maintenance techs, so that the employed techs get large quantities of overtime pay. A single person working 12 hours a day ends up costing the same as two people working 8 hour days, but is definitely not going to be able to keep up with repairs, resulting in the constant broken escalators and elevators and out of commission tracks that have plagued WMATA increasingly since the late 2000's.
Reducing the quantity of workers when negotiating with an entrenched union is very, very difficult to do. They tend to want to keep the same quantity, or very slowly increase the quantity. This is very well documented behavior that is covered extensively in the book "The Machine That Changed the World", which was the first book documenting Toyota's journey with LEAN manufacturing, and then talking about the challenges GM faced with their unions when trying to implement these same practices.
All that being said, you were correct to poke holes in my statement and you added to the conversation significantly, so thank you for that.
> But having done work in the past to do detailed analysis for the WMATA (they run the DC metro system) on various understaffing issues, the unions do contribute to issues with operations and maintenance. I will not and cannot comment on their issues with construction of the Silver Line.
As soon as you said "WMATA" I was going to ask about the Silver line. From the outside it certainly looked like it had problems, though I suppose tunnel boring wasn't one of them.
As soon as you said "WMATA" I was going to ask about the Silver line. From the outside it certainly looked like it had problems, though I suppose tunnel boring wasn't one of them.
You can try to break it down, but the fact is in NYC the quantity of labor is a union-negotiated (and demanded) problem.
The NYTimes did a detailed article on this a couple years ago, with a focus on the NY subway expansion: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-.... There's no escaping that the overstaffing was a political boon to a union.
_Why_ NY construction unions are so much worse than Scandinavian unions is a whole different question. But it's not really deniable that the public-union interaction in big cities here is incredibly extractive and antagonistic, and that drives up costs.
The NYTimes did a detailed article on this a couple years ago, with a focus on the NY subway expansion: https://www.nytimes.com/2017/12/28/nyregion/new-york-subway-.... There's no escaping that the overstaffing was a political boon to a union.
_Why_ NY construction unions are so much worse than Scandinavian unions is a whole different question. But it's not really deniable that the public-union interaction in big cities here is incredibly extractive and antagonistic, and that drives up costs.
>> quantity of labor
This is something I don’t really understand about American business. In my experience it’s pretty common in America to have “superfluous” jobs - the Walmart greeter for example, valet parking attendants etc. etc.
Now on the one hand you can say these roles aren’t superfluous at all, they’re required, maybe some people find a valet convenient (does not compute for me), maybe some customers spend more in your store after a cheery hello at the entrance.
On the other hand, society works just fine without these roles and at lower overall cost.
Is it a workaround for capitalism’s failings? Like “hey of course there’s a job for everyone who wants one” kind of thing and we’ll just quietly eat the cost because the flaking out on society payments (taxes to cover rule of law etc.) is cheaper overall than having a couple of extra minimum wages on the balance sheet?
This is something I don’t really understand about American business. In my experience it’s pretty common in America to have “superfluous” jobs - the Walmart greeter for example, valet parking attendants etc. etc.
Now on the one hand you can say these roles aren’t superfluous at all, they’re required, maybe some people find a valet convenient (does not compute for me), maybe some customers spend more in your store after a cheery hello at the entrance.
On the other hand, society works just fine without these roles and at lower overall cost.
Is it a workaround for capitalism’s failings? Like “hey of course there’s a job for everyone who wants one” kind of thing and we’ll just quietly eat the cost because the flaking out on society payments (taxes to cover rule of law etc.) is cheaper overall than having a couple of extra minimum wages on the balance sheet?
It's actually likely due to low minimum wages. Countries with high minimum wages do not have superfluous jobs. They still end up with similar employment rates overall as the increased spending power of the bottom 50% stimulates the economy overall but there are definitely fewer bullshit jobs.
I agree with your statement here, but it should be noted that it's important to have smart minimum wages adjusted for regional cost of living. In the US, the minimum wage hikes can often result in local reductions in employment in the short-term.
In the long-term, minimum wage hikes tend to not at all reduce employment, even when implemented in clumsy fashion like the US tends to do.
It's a shame that conversations on these things are so politicized, because it immediately prevents nuanced discussions because ideologues pounce and label you an opponent if you try to discuss realistic details.
In the long-term, minimum wage hikes tend to not at all reduce employment, even when implemented in clumsy fashion like the US tends to do.
It's a shame that conversations on these things are so politicized, because it immediately prevents nuanced discussions because ideologues pounce and label you an opponent if you try to discuss realistic details.
interesting. as an american, I have just about the opposite impression of mainstream american businesses. most retail stores seem have the bare minimum number of employees to ring up customers and stock the shelves. and grocery stores are trying to eliminate the cashiers. the exceptions tend to be higher end stores or, for some reason, clothing stores. I can barely walk five feet into a gap without someone trying to help me shop. I only see valets at nice restaurants or garages that are too tight to allow customers to park their own cars.
the walmart greeter is an odd exception. why do they pay someone to stand at the door and say hello but have almost no one out on the floor to help me find things I want to buy?
the walmart greeter is an odd exception. why do they pay someone to stand at the door and say hello but have almost no one out on the floor to help me find things I want to buy?
Walmart greeters are to deter theft. An old lady may not actually stop anyone from stealing, but neither does your average door lock. Both keep honest people honest.
In addition to the theft issues already mentioned, people in the right place help customer service and so are worth it because people feel better. As such the wal-mart greeter is cheap compared to the cost of a whole store. The cashier makes about twice as much per hour, and doesn't generally give the good feeling to customers.
> On commuter rail lines we pay conductors $100k a year to collect tickets when in Europe they'd use a ticket machine. On the NYC subway they have a driver and a conductor when in Europe they'd only have a driver at best
Hold on, commuter and metro rail in the US have dedicated conductors? As in one per train, rather than someone spot-checking tickets on one in a hundred trains?
Hold on, commuter and metro rail in the US have dedicated conductors? As in one per train, rather than someone spot-checking tickets on one in a hundred trains?
Who do you think requests more quantity of labor for every job?
The unions.
And the contractors pass on the cost because the bigger the final dollar amount the more opportunity there is to squeeze in profit.
And the beurcrats rubber stamp it because the bigger the amount of resources they control the more powerful they are.
And the politicans ignore it because it provides them more power to do favors and a bigger haystack in which to bury their nepotism and unethical meddling.
It's self serving waste all the way down.
The fundamental problem is that nobody anywhere in the chain or responsibility wants to spend taxpayer money with precision, efficiency and care because doing otherwise is in their best interest, as is every other party, except the taxpayer who has no choice but to bend over and take it.
It's not just a union problem. But rest assured the unions are doing all they can to perpetuate it as it benefits them.
And the contractors pass on the cost because the bigger the final dollar amount the more opportunity there is to squeeze in profit.
And the beurcrats rubber stamp it because the bigger the amount of resources they control the more powerful they are.
And the politicans ignore it because it provides them more power to do favors and a bigger haystack in which to bury their nepotism and unethical meddling.
It's self serving waste all the way down.
The fundamental problem is that nobody anywhere in the chain or responsibility wants to spend taxpayer money with precision, efficiency and care because doing otherwise is in their best interest, as is every other party, except the taxpayer who has no choice but to bend over and take it.
It's not just a union problem. But rest assured the unions are doing all they can to perpetuate it as it benefits them.
How does that work? Unions do not run companies and hence have no say in negotiations between government offices and contractors. Unions only concern themselves with the relationship between the employees and the employer. I don't think you know what a union is.
In places like New York City the unions are easily able to stop the work of any private contractor. The private contractors know this and collaborate with the unions on ensuring that they are able to ensure that the contracts mandate union labor.
This is not how most unions in the United States operate but they do operate this way in locations where the dominant political party has not changed for a hundred years, see NYC.
It's rather condescending to indicate to someone that they don't understand what a union is. You should research a little bit more before you assume that unions aren't able to influence private companies that employ them when negotiating contracts with local governments. It's simply wrong.
I'm very familiar with these details because I had to do a detailed analysis of labor costs for the WMATA which has to negotiate with unions to operate the DC metro system.
This is not how most unions in the United States operate but they do operate this way in locations where the dominant political party has not changed for a hundred years, see NYC.
It's rather condescending to indicate to someone that they don't understand what a union is. You should research a little bit more before you assume that unions aren't able to influence private companies that employ them when negotiating contracts with local governments. It's simply wrong.
I'm very familiar with these details because I had to do a detailed analysis of labor costs for the WMATA which has to negotiate with unions to operate the DC metro system.
That you have been involved in the project doesn't mean that you know where the real cost sinks are. The role of unions are discussed extensively in the linked to article's comments. The idea that unions drive the cost of construction projects through demands for more labor appear to be quite tenuous. If you have evidence to the contrary cite them. Otherwise I would chalk up GP's comment as the typical anti-union scare propaganda. It's very common on HN.
That isn't true. Union members vote. There are a lot of laws on the books about what can and cannot be done in those negotiations - many of them written by the union.
The rest of the country keeps its transit infrastructure costs down by refusing to have transit.
New York and California have plenty of roads.
New York and California have plenty of roads.
And roads aren't even cheap, but they are nice and decentralized and do not require smart planners.
That's a nice resiliency and I give roads credit where they are due for it. But cars are terrible and we simple cannot continue to do the easy status quo thing.
That's a nice resiliency and I give roads credit where they are due for it. But cars are terrible and we simple cannot continue to do the easy status quo thing.
Grids can be resilient, but these days we protect neighborhoods from traffic by forcing use of arterials/collectors that become single points of failure. Often this is even retrofitted onto grids via turn restrictions.
> DC, NYC, LA, SF are not representative of how infrastructure projects are pursued in the rest of the country.
If the suburbs are different, this is a decent point. But the major American cities and their suburbs are a majority of the country on every metric that matters. BOS-WASH + SoCal alone is more than 20%.
If the suburbs are different, this is a decent point. But the major American cities and their suburbs are a majority of the country on every metric that matters. BOS-WASH + SoCal alone is more than 20%.
The state of Texas is ~9% of the US pop, and Dallas, TX (top metro area by pop in the state, 4th in the country) has a substantial public transit infra to study (DART).
Totally reasonable to say we should look at Greater Houston and Dallas-Ft. Worth as well as BOS-WASH, SoCaL, and Chicagoland.
They are comparing large American cities to large cities in other countries, so it's apples-to-apples.
Unfortunately, the ratchet effect for pricing means getting rid of mafia control doesn't necessarily undo the cost increases they dictated. Also, prevailing wage practices mean labor unions for the same trades that aren't themselves corrupt still end up with the same price inflation, at least regionally.