NYC Construction Costs Increasing: Up 5% in 2018
The New York Building Congress’s 2019 Construction Outlook Report concludes New York is still the most expensive US city to build in and points to the reasons why.
NEW YORK CITY—New York City’s construction costs have increased from 2017 to 2018 by approximately 5%. Nationally construction costs have risen by 3% to 4%, and similar to New York City have been on an incline since 2010. The New York Building Congress published its Construction Costs February 2019 report with these findings, other trends and their explanations.
“As New York’s population and economy continue to grow, every sector of the building industry—commercial, residential, healthcare, education, cultural and infrastructure—remains robust, offering opportunity for both the labor force and contractors,” says Carlo A. Scissura, the organization’s president and CEO. He points to the high costs of land and materials and regulations as the primary drivers of cost increases in 2018. He nonetheless adds, “While the cost of construction is high, the rewards for doing business in New York have never been greater.”
The increase was at the same rate as in 2017. The association’s report states the booming market driving up the demand for labor and materials, the concentration on luxury multifamily and public infrastructure, and the premium office and retail sectors are key factors behind New York City’s acceleration of construction costs exceeding the national average.
The analysis shows New York is the priciest US city to build in with construction costs for Class A offices now between 15% to 50% higher than other major US cities. In this sector, New York average construction costs (noted as high estimates) were $575 per square foot, with Boston at $475, Chicago at $450, Washington, DC at $425, LA at $350, San Francisco at $330, and Denver at $255 per square foot.
The Building Congress report states construction costs for premium offices spaces in New York could be as high as $300 more per square foot compared to cities in Asia and the Middle East.
The report also ranks New York retail construction as having an average topping all other US cities, with a high estimate at $425 per square foot. San Francisco was at $350, LA at $340, Chicago at $290, Washington, DC and Boston at $275, and Denver at $145.
New York costs per square foot for retail exceed Berlin and Dublin by 250%. Yet they are even lower than in London with the high average estimate of $600 per square foot.
For multifamily, healthcare, K-2 education and hotels, the report found major cities across the US ranked higher or were comparable to New York in construction costs.
The Building Congress produced its report from information provided by ENR, Rick Levett Bucknall, Turner and the Bureau of Statistics.