Hacker News Board Hacker News, browsed like a classic message board
Live data from Hacker News

Why American Construction Costs Are So High

pedestrianobservations.com

Post reply on HN
Print view View original

41–50 of 164 posts

Re: Why American Construction Costs Are So High

#41

Post by nck4222 »

jonawesomegreen wrote: post #11

News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost…

While I agree that the attitude shown in the quote is undesirable, I think it's more a symptom of the problem, not the underlying problem itself. He's essentially right. Infrastructure projects are constantly shot down because of cost concerns, yet we have crumbling infrastructure that needs to be replaced. If estimates became higher, approvals would decrease.

One other piece I haven't seen mentioned yet: large construction projects that take years to complete are incredibly hard to estimate accurately, because unpredictable economic swings can cause the cost of items to vary quite a bit between when the estimate was produced, and when the work was actually being performed and purchased.

This was one of the reasons why the Big Dig's estimates were so far off. Although there are a dozen other factors with that particular case as well.

Re: Why American Construction Costs Are So High

#43

Post by ska »

dmode wrote: post #10
lukewrites wrote: post #4

Funny that the article doesn't once mention unions as a factor that drives up cost. It's almost as if attacks on unions for making public works slow and expensive are disingenuous.

While union can be a factor compared with Asian countries, aren't our costs higher than European countries that have stricter labor laws ?

In my limited semi-personal experience, (some) European countries have stronger labor laws but a much less adversarial model of union & management collaboration, which can include creative ways of reducing costs (so long as the benefit of same is distributed equitably).

Re: Why American Construction Costs Are So High

#44

Post by abduhl »

mcphage wrote: post #20
abduhl wrote: post #13

I haven’t had time to read through the entire article in detail but my skimming indicates that the article fails to identify what I believe is the true reason for tunneling increases in the USA: third parties and their ability to sue projects. This increases costs due to risk of lawsuits/challenges and excessive amounts of money put towards mitigating this risk. This continues from procurement through design and thro…

> the article fails to identify what I believe is the true reason for tunneling increases in the USA: third parties and their ability to sue projects Why do you believe that's the true reason? I have no idea if it is or if it isn't, I'm just wondering where you got that from.

I have worked in the tunneling industry for nearly a decade designing, building, and procuring these jobs. Tunnels are generally the last option chosen when third parties are the concern. They are the most expensive option, by far, unless other factors (environmental, public impact, political perception, etc.) are considered. Therefore, once you arrive at the decision to use a tunnel, it becomes clear that third party impacts are a driver.

From that point it becomes a battle of easement/property acquisition during procurement and with each easement or third party agreement comes promises that must be made to that third party. This translates into design mandates which need to be held and designed around which translates into additional design costs and then additional construction costs. If we don't hold to these agreements then litigation ensues, and so we would rather overdesign to reduce the risk profile and position the project better for the inevitable lawsuit.

Other countries do not have similar litigation risks. Or at least, that's what my European contemporaries tell me when they come to work in America.

Re: Why American Construction Costs Are So High

#45

Post by oilman »

wrs wrote: post #27
jonawesomegreen wrote: post #11

News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost…

I hope the irony of this topic being discussed on a (mostly) software-related forum isn’t lost on anyone.

I must be a bit dense today, what irony?

Re: Why American Construction Costs Are So High

#46

Post by wil421 »

dashundchen wrote: post #30

Regarding point 9 about the inability to look outside North America. I always wondered why it seems transit agencies haven't looked to bring in teams of people who have managed/built successful projects in Europe, Asia, or even closer like Mexico City. California HSR for example went to solicit bids from foreign operators and selected Deutsche Bahn/German Railways. But AFAIK the initial design work/RFP/proposals were…

I think you’re confused about what these projects really are. They are not construction projects they are job creation programs. Both the unions and politicians use them as such to bolster their own interests.

Re: Why American Construction Costs Are So High

#47

Post by abduhl »

helen___keller wrote: post #28
abduhl wrote: post #13

I haven’t had time to read through the entire article in detail but my skimming indicates that the article fails to identify what I believe is the true reason for tunneling increases in the USA: third parties and their ability to sue projects. This increases costs due to risk of lawsuits/challenges and excessive amounts of money put towards mitigating this risk. This continues from procurement through design and thro…

This is addressed in section 8, "Institutions part 2: political incentives": > the political system favors NIMBYs and really anyone who complains. Infrastructure construction takes a long time and the politician who gets credit for it is rarely the one who started it, whereas complaints happen early. This can lead to many of the above-named problems, especially overbuilding, such as tunneling where elevated segments…

My point is related but not exactly the same as his section 8. Litigation in America is what has driven defensive design and construction because we are ALWAYS positioning for claims, especially from third parties. The author is zeroing in on politicians and their lack of a need to take a project from "cradle to grave" and/or answer for cost overruns. This is a symptom of the problem, in my opinion.

Re: Why American Construction Costs Are So High

#48

Post by imgabe »

jonawesomegreen wrote: post #11

News that the Transbay Terminal is something like $300 million over budget should not come as a shock to anyone. We always knew the initial estimate was way under the real cost. Just like we never had a real cost for the Central Subway or the Bay Bridge or any other massive construction project. So get off it. In the world of civic projects, the first budget is really just a down payment. If people knew the real cost…

> The idea is to get going. Start digging a hole and make it so big, there’s no alternative to coming up with the money to fill it in.

Robert Moses is quoted as saying the same thing. Once you start, there is no choice for the public but to push on and finish.

Re: Why American Construction Costs Are So High

#49

Post by vonmoltke »

magissima wrote: post #7
lukewrites wrote: post #4

Funny that the article doesn't once mention unions as a factor that drives up cost. It's almost as if attacks on unions for making public works slow and expensive are disingenuous.

Indeed, the author even wrote another article explicitly refuting the anti-union argument. https://pedestrianobservations.com/2019/01/08/meme-weeding-u...

That post has a few problems:

- His line about the DART Orange Line is mixing three different projects (the actual Orange Line, the Trinity River Expressway, and the Dulles (VA) Metro extension)

- He is mixing actual project costs with projected costs, as if the comparison is equivalent

- The biggest problem, though, is that he is using "Right to Work" to mean "no unions", which is ridiculous. He even doubled down on that in the comments with the asinine statement "But in places with zero union density, like Texas".

Those are just the problems I saw from ~10 minutes of research on the subject. Considering that, I don't put a lot of faith in his arguments.

Re: Why American Construction Costs Are So High

#50

Post by abduhl »

oilman wrote: post #45
wrs wrote: post #27

Earlier quoted context omitted.

I hope the irony of this topic being discussed on a (mostly) software-related forum isn’t lost on anyone.

I must be a bit dense today, what irony?

I assume he's referring to platform lock-in ala Microsoft Office, AWS, Oracle, or Apple's walled garden driving future decisions. So the first software decision is a down payment until your technical debt hole is so big you can't do anything but throw money down it.
Post reply on HN