The High Cost of Development

The Story

Building public infrastructure in New York City is extraordinarily expensive, mostly because of extravagant union contracts and the maintenance of prevailing-wage laws. But private construction in New York is also very expensive, driven largely by powerful unions that demand lavish pay and control over project scheduling. Competition from nonunion firms is increasing, but the city’s labor environment remains adverse to development.  

The Facts You Need to Know

  1. Schedule: A fraud-related lawsuit connected with construction at Hudson Yards alleges that a union worker was paid $600,000 for working 365 consecutive 12-hour days. Read more.

  2. Boss: In New York City’s unionized construction industry, contractors and subcontractors overlap, resulting in obscured lines of authority and responsibility. Read more.

  3. Staffed: Unions insist on overstaffing construction projects, increasing costs with no added productivity. Read more.

“Spending an extra $100 million here and there because of excessive labor costs is daunting, even in New York.”

Steven Malanga, Manhattan Institute senior fellow

Twitter Take

The Past is Present

Reconstructing New York By Stephen Berger (Winter 1992)

“New York City’s problems call for fundamental reforms. Here’s an agenda for making the city work.”

And in other news...

“New York Gov. Andrew Cuomo descended into the Hudson River rail tunnel late Wednesday night to showcase the deterioration of the tubes that carry hundreds of thousands of daily commuters across the Northeast—and to press President Trump for federal support to fix them.”