Nile Berry writes about real estate in New York, focusing on construction, housing policy and urban economics.
If you’ve lived in New York long enough to watch the skyline change, you’ve probably seen the pattern: So many of the city’s new towers are built for the wealthy. They arrive with vaguely aspirational names — the Lyra or Sky House — designed to sound luxurious rather than reflect any real sense of place.
The reflexive explanation is the greed of developers, financiers and foreign investors. It’s an emotionally satisfying story, but it obscures a simpler truth. New York is ranked as the most expensive place in the world to build. Long before a proposal reaches a zoning board, the math has already eliminated anything resembling affordability.
Office construction costs in New York are 15 to 50 percent higher than in comparable cities. According to real estate consultants Turner & Townsend, the average construction cost per square foot in New York is $534 — higher than cities such as D.C. ($359) and Philadelphia ($428). In addition to land, materials and labor make up a significant part of any project’s budget, and New York’s rules keep these particular costs artificially inflated.
Consider plumbing. In almost every modern city, developers use PVC piping, which is inexpensive, safe and perfectly adequate. New York, clinging to a century of tradition, still mandates that high-rises use heavy cast-iron pipes that cost several times more than PVC and require pricier, often union-certified labor to install. Electrical rules follow the same logic. Where most cities allow plastic-coated wiring, New York insists that most lines be threaded through metal conduit.
What look like minor technical mandates compound across an entire building, pushing project proposals from marginally feasible to economically impossible.
Then come New York’s work rules that stretch timelines and budgets. By square footage per year, Chicago skyscraper construction is almost twice as fast as in New York. By stories per year, it’s almost 40 percent faster, partly because tasks that one tradesperson could perform elsewhere require two or three in New York. Crane operations are a perfect example. The licensing process is so restrictive that many projects avoid using tower cranes, opting for manual or piecemeal material handling — meaning more workers and more labor hours for the same task.
And then there’s the scaffold law — an 1885 statute found nowhere else in the country — which imposes absolute liability on contractors for any slips or falls, even when a worker’s negligence caused the accident. The result is sky-high insurance premiums that can add 5 to 10 percentto the entire project’s cost.
This is the dynamic Ezra Klein and Derek Thompson describe in their book “Abundance”: a system that mistakes process for progress, where well-intentioned rules accumulate without being weighed against their combined effect. Each regulation makes sense in isolation. Together, they quietly choke off the supply of the things society claims to want more of.
While New York maintains outdated rules, other cities have moved in the opposite direction. Tokyo, for example, has modernized its building code, emphasizing performance-based regulation — proving a method is safe rather than following a prescriptive list of mandated materials and procedures. The result is faster, cheaper construction without compromising quality.
Several American cities — including Austin and Minneapolis — have taken similar steps, showing how flexible standards and streamlined codes can reduce construction costs. Their reward: more housing at every price point, including market-rate units that are attainable for middle-income households. New York’s reward for resisting reform: luxury towers with empty units and affordable housing lotteries flooded with millions of applicants.
New York doesn’t need to reinvent housing policy; it needs to unclog it. Update the building code. Repeal the scaffold law. Modernize labor rules. The cumulative savings could make it feasible — perhaps even profitable — to build something other than luxury high-rises.
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