1. New York
New York is the world’s most expensive city in which to build.
“New York rises to the top globally once again due to a lack of real-estate availability, accessibility issues, and high real-estate prices,” David Hudd, Arcadis cost and commercial director, said. “To build in such a dense urban environment like NYC, you must find solutions to control costs, such as expertly handling storage, transport, and staging of building materials; identifying skilled construction firms and labor far in advance; and implementing modularized construction.”
The Big Apple is likely to remain the most expensive city for construction in 2017 and beyond, as large-scale construction projects and international investors drive development. New York’s construction costs are nearly 50 percent above the U.S. national average and more than 20 percent above those of other major U.S. cities, such as Chicago, Los Angeles, Seattle, and Boston.
San Francisco is the second most expensive U.S. city for hard construction costs because of its equally cramped environment, rigorous seismic requirements, and competition for contractors. Meanwhile, Houston is a bargain, relatively speaking, as the city’s hard construction costs are 10 percent below the national average.
U.S. construction-output growth is expected to increase at around 3 percent per year, driven by the housing market, the recovery of large metropolitan areas, and continued investment in manufacturing. Housing continues to be a bright spot; with build rates remaining 30 percent below the pre-crisis peak, there should be potential for further growth.