Why Is Transit Construction in the US so Expensive?

From Alex Tabarrok.

"The Transit Cost Project, a project supported by the NYU’s Marron Institute has released the most comprehesive report to date on why US transist-infrastacture is so expensive:

Why do transit-infrastructure projects in New York cost 20 times more on a per kilometer basis than in Seoul? We investigate this question across hundreds of transit projects from around the world. We have created a database that spans more than 50 countries and totals more than 11,000 km of urban rail built since the late 1990s. We will also examine this question in greater detail by carrying out six in-depth case studies that take a closer look at unique considerations and variables that aren’t easily quantified, like project management, governance, and site conditions.

The bottom line is it’s many things that add up. Here are a few items that struck my eye:

Much of the premium [in labor cost] comes from white-collar overstaffing: in our Massachusetts’ Green Line Extension (GLX) case, we found that during the first iteration of the project, the ratio was estimated at 1.8 craft laborers to 1 supervisor by the CM/GC. In New England, the expected ratio is 2.5 or 3 craft laborers per supervisor; thus, GLX had 40-60% more supervisors than is normal in the Northeast.

In New York, each agency insists on having its own on-site supervisor.

Elsewhere in the world 5 laborers to one supervisor is common.

Here’s something I didn’t know:

The second quirk is that American labor is local. Railway workers and construction workers in Europe are nationally mobile and often mobile across the entire EU. Spanish rail maintenance workers move between different parts of the country, staying in temporary worker housing wherever they are posted to. So do tunnel miners in Sweden; many are EU migrants, and on Nya Tunnelbanan none is a native Stockholmer. No such thing occurs in unionized American labor: the tunnel workers and operating engineers in New York are rooted in the region and only work within or right next to the city.

The mobile system has its own costs. Fringe rates are high because of the need to provide temporary housing: they add 100% to the cost of a Swedish worker, a comparable rate to that of a unionized New York tradesperson, American unions having unusually high fringe rates due to high-cost health plans. However, a nationally mobile workforce is a more productive workforce–such workers gain experience from tunnels built elsewhere, whether for infrastructure or for the mining of natural resources. Present-day New York laborers only have experience with New York projects; thus, they are a dedicated and driven workforce but also a low-productivity one, having never seen more efficient tunnel projects."