Thoughts on the construction cost conundrumBy
The vast majority of New York’s transit experts, advocates and enthusiasts think the city has a cost problem. We have the world’s two most expensive subway stops — in Fulton St. and the World Trade Center PATH Hub — under construction; we have the world’s two more expensive subway lines — in the 7 line and the Second Ave. Subway — under construction; and we have the mess that is East Side Access currently in progress. For over $20 billion (and $10 billion in cost overruns), we’re not getting a lot for our money these days.
From where I sit, the cost of these projects is the biggest problem facing future transit expansion. The costs are why ARC was canceled; it’s hard after all to believe that ARC wouldn’t have come in well above when everything else is trending that way. The costs are why New York has to fight tooth and nail for any dollar and why we talk about prioritizing badly needed projects instead of building everything at once as quickly as possible. The costs are why we’re inching outward instead of striding toward expansion.
One of the other problems is that no one knows why everything cost so much in New York City. The easy way out is to claim New York exceptionalism. Things cost more in New York because it’s New York. That is, after all, why people pay more to live here than the vast number of Americans would think reasonable, and that is the argument Michael Horodniceanu put forward during his talk on Tuesday night. It’s not a very satisfying answer, and while the MTA Capital Construction president vaguely mentioned work rules, he seems to believe that New York’s costs are reasonable.
At Next City yesterday, Stephen Smith further explored this part of the story. Do MTA officials think these costs are acceptable? Smith writes:
Horodniceanu gave a number of answers throughout the evening. He blamed, for example, the byzantine work rules that construction unions have negotiated for themselves — something nobody with a passing familiarity of the work rules that MTA management toils under on the operations side would doubt. One reporter with TunnelTalk visited the East Side Access tunnels and came away with the impression that the sandhogs “worked for the Union rather than the contractor.”
Horodniceanu also blamed New Yorkers’ intolerant attitudes toward disruption at the surface, which has certainly been a problem in the past, even in unpopulated Central Park. But many of his answers were not so credible, and left me with the distinct impression that not only does the MTA misunderstand why its projects are so expensive, but that the agency doesn’t even necessarily see the high costs as a problem that needs fixing in the first place.
“Do you think that it’s a problem?” I asked Horodniceanu of the high costs, after his talk was over. “Is it a problem?” he replied. “Is is a problem that an apartment in New York costs a lot of money?” It was the same answer he gave Grynbaum when on stage.
Additionally, Smith recounts a statement from MTA CEO Tom Prendergast who told him that “the cost of construction is what the cost of construction is.” Neither man has a particularly satisfying answer, but in a way, there is an element of politics involved. The MTA Chairman and the head of Capital Construction can’t bemoan high costs on the one hand while asking the state to support a $25 billion five-year capital plan on the other. The optics would be horrible.
Still, if New York is serious about transit expansion, the costs have to come down. We can’t support the current regime, and hopefully, behind closed doors, someone smart is working on this problem. We need more of the Second Ave. Subway, but how much are we willing to pay for it?