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The strange and awful path of productivity in the US construction sector

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Re: The strange and awful path of productivity in the US construction sector

#191

Post by rtkwe »

HEmanZ wrote: post #121
thereddaikon wrote: post #98

Earlier quoted context omitted.

Affordable housing has little to do with the cost of building the house.

In Manhattan or San Francisco? Probably not. But in most of the gigantic, sprawling USA, I suspect affordable housing absolutely has everything to do with cost of building a house.

Cities still hold a large portion of the population of the US and a lot of jobs can't just be done remotely even if employers actually adopted remote work which many really really don't want to. Housing isn't just a problem in Manhattan and SF it's hitting cities and suburbs everywhere.

Re: The strange and awful path of productivity in the US construction sector

#193

Post by elmomle »

hn_go_brrrrr wrote: post #165
javajosh wrote: post #137

Earlier quoted context omitted.

>undocumented workers [are responsible for the productivity drop] I am confused by this assertion. If they are undocumented, wouldn't they be excluded in the stats? And if they aren't included in the stats, shouldn't we expect an artificial increase in worker productivity? If there is a 4:1 undocumented to documented ratio, then that 1 documented person will get "credit" for the work of 5 people! Even if 4 of those p…

"Undocumented" is the current preferred euphemism for "illegal immigrant".

Or, "illegal immigrant" is a sometimes-used dysphemism for "undocumented immigrant". I'm not aware of any other class of people who break a law who are called "illegal" as a result; it's a rather dehumanizing impulse.

Re: The strange and awful path of productivity in the US construction sector

#194

Post by runnerup »

eagleinparadise wrote: post #115

CRE guy here. A lot of this "productivity loss" is also due to government related staffing issues and bureaucracy. Most people are describing more complex building codes, so I'll add something new. I had a project that was delayed by over a year during Covid because the city approved incorrect plans, came back and requested revisions, and then lost the physical plans (without us knowing until we checked in asking wha…

> made the required rent higher

If, all along, you could have rented it out for more money ... why were you planning to rent it out for less money? I get that you wouldn't have to, but it appears that the "market rate rent" was higher than you initially anticipated.

As a corollary, assuming that you had initially planned on the highest rent that the market would bear...it seems that after a year of unexpected delays you'd most likely still choose to finish the project even at a loss. This is because all the loss would have already been sunk cost that you can't change anymore, and at the "original maximum rent the market would bear" you'd still make your IRR/ROI on the marginal future investment of finishing the construction.

So, assuming you couldn't raise the rent, you'd lose money either way, but you'd lose less money by finishing the construction vs. losing more money by abandoning the project entirely.

Re: The strange and awful path of productivity in the US construction sector

#195

Post by pixl97 »

wonderwonder wrote: post #72

Wonder how much of it is related to contractors underbidding to win a contract and then saying they need more money which slows everything down. Or just throwing a bid out without really doing the due diligence required to understand what needs to be done. For example the New York tunnel project that's billions over cost and years behind. I see this every time I hire a contractor to do work on my house, every experie…

If you have a contractor looking for jobs, at least recently, it's likely they are a terrible contractor. The good contractors tend to be booked out for months

Re: The strange and awful path of productivity in the US construction sector

#196

Post by peoplefromibiza »

pirate787 wrote: post #39

In this time-period there has been a large-scale introduction of undocumented workers into the construction labor force. They are a quarter of some construction labor categories. Perhaps using undocumented subcontractors may play a role in lower productivity growth (cheap, unstable, and relatively unskilled labor) or maybe just distorting the statistics. https://www.americanprogress.org/wp-content/uploads/2021/02/...

> In this time-period there has been a large-scale introduction of undocumented workers into the construction labor force

or, as usually happens, being "documented" have become more and more difficult, so the number of undocumented workers has gone up as a consequence.

also, immigrants are replacing those workers who are not willing to do the job most of the time.

it's not unusual everywhere you go in the west to witness that a large portion of construction workers are immigrants.

Here in Italy it's mostly people from Romania, North Africa and other eastern European Countries.

Virtually no Italian wants to be a mason anymore.

They rather prefer to work for app-based tech companies (Glovo and such).

And don't underestimate bureaucracy.

Re: The strange and awful path of productivity in the US construction sector

#197

Post by huevosabio »

tristor wrote: post #99
pirate787 wrote: post #39

In this time-period there has been a large-scale introduction of undocumented workers into the construction labor force. They are a quarter of some construction labor categories. Perhaps using undocumented subcontractors may play a role in lower productivity growth (cheap, unstable, and relatively unskilled labor) or maybe just distorting the statistics. https://www.americanprogress.org/wp-content/uploads/2021/02/...

I think this is one of the major impacts. My experience (family in construction) is that day labor / undocumented workers often don't have construction skills, and so have to be trained on the job, and each crew has mostly new/unskilled folks with a few skilled folks to guide them and keep them on track. Over time, these folks become skilled, and generally end up running crews. It's very commonplace to find the more…

My experience (in the Bay Area) has been that regardless of country of origin, construction work is insanely inefficient. Lots of administrative bs, lots of made up rules, lack of communication between trades, tons of "not my job" attitude.

Re: The strange and awful path of productivity in the US construction sector

#198

Post by rtkwe »

notch656c wrote: post #147
loandbehold wrote: post #127

Earlier quoted context omitted.

You are wrong. For instance in Southern California the cost to build new house is around $350 per sqft. Building 2000 sqft house is around $700K. House like that may sell for around 1 million. So that would be 70% construction and 30% land.

How does that happen? For 700k I could hire 2 skilled persons and 5 undocumented immigrants to work an entire year. How long does it take to raise a house?

It's not just labor in that cost there's materials to consider too.

Re: The strange and awful path of productivity in the US construction sector

#199

Post by notch656c »

toast0 wrote: post #160
recuter wrote: post #86

Earlier quoted context omitted.

You can pay the greenie winnie tax and go full passive house and be completely off grid sitting pretty in an airtight optimally efficient home: https://www.youtube.com/watch?v=fhbLjEKKLVM It would also triple the construction cost of the house. Reasons. But hey, $0 energy bill. Most builders don't do any of that stuff, like at all. Just the bare minimum required. They aren't incentivized. Most consumers would - and d…

The bare minimum is a lot more than it used to be. My parents' house was built with zero attic insulation, and I believe no wall insulation either. Just framed, drywalled insided and stucco outside. I can't imagine there's any fire blocks between studs either.

Upping the codes to require new construction to have those things, while not razing your parents' house, shows it's all about the pyramid scheme and not about actual safety. If it were about actual safety and such things are considered unsafe then unsafe houses like your parents home should be bulldozed for the good of the people.

Re: The strange and awful path of productivity in the US construction sector

#200

Post by pixl97 »

eklitzke wrote: post #119
jedberg wrote: post #56

They're measuring square feet completed per employee. Houses are twice as big now as they were 50 years ago. Anyone who's every done a remodel or new construction knows that 80% of the time is spent on the last 20% of finishing work, and with twice the square feet, that's twice as much finishing work. Also, does this paper take into account increased regulations? Both the time spent complying with new building codes…

If it's twice as much finishing work it's also twice as much "fast" work (the first 80%). The ratio of time spent between the easy stuff and the hard stuff shouldn't change, at least not just based on a square footage change.

Until you consider central heating, multiple bathrooms, far more electric outlets, and then multiple inspections of the above by different groups. Modern homes are far more complex.
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