A panel on controlling construction costs convened in New York City today by the city\u2019s chapter of the Urban Land Institute found that there are myriad reasons why construction costs continue to climb at a rapid rate. One major one is the sheer amount of construction projects ongoing in New York, which makes the competitive atmosphere hot for both material and labor. \u201cThe amount of building is on the scale that we saw in the late \u201850s and early \u201860s,\u201d said Charles Murphy, senior vice president & general manager of Turner Construction Co., noting that in addition to the high level of private development, there are large public infrastructure projects underway as well, such as the construction of the Second Avenue subway line and the extension of the No. 7 train. Costs have risen so fast that Turner, which has been building in New York since 1902 and has compiled a large database of material costs, said the database is frequently of little use. \u201c[Prices are] what the market will bear,\u201d Murphy said. The panel agreed that massive construction projects in China and India have also raised raw material costs. Another issue that is raising the cost of construction in the city is that there is a contractor shortage. \u201cWith 1,000 buildings being built, you\u2019d think there is a sizeable base of contractors,\u201d said Eli Zamek (pictured), senior vice president of Vornado Realty Trust. \u201cBut, there are three or four in each trade. Less competition equals more cost. One trend that the panel has seen is the use of non-union construction labor. \u201cThe unions are busy, so they care less about it,\u201d Zamek said. But the use of non-union labor could increase a development\u2019s timeline, perhaps from two to four years, he said. The panelists agreed that there is no silver bullet to control costs. \u201cYou have to assemble the best team possible,\u201d said Dominic Dunn, senior associate principal of Kohn Pedersen Fox Associates. He said ordering construction materials far in advance of when they are needed can also lower costs. City government should also make more brownfield sites available for redevelopment, which could lower costs, Murphy said. Alastair Lamb, senior manager at Ernst & Young, said a \u201cfully transparent\u201d construction budget process is another key to cost control.<\/p>\n","protected":false},"excerpt":{"rendered":"
A panel on controlling construction costs convened in New York City today by the city\u2019s chapter of the Urban Land Institute found that there are myriad reasons why construction costs continue to climb at a rapid rate. One major one is the sheer amount of construction projects ongoing in New York, which makes the competitive…<\/p>\n","protected":false},"author":1314,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[37301],"tags":[],"class_list":["post-1003741865","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"acf":[],"yoast_head":"\n