San Francisco – The Second Most Expensive Place In The World To Build

New York is the only place in the world that is more expensive to build in than San Francisco.

The reasons for this stem from a major shortage of labor, which is a problem across the industry, but especially in San Francisco.

The process of getting construction projects approved is also time consuming and long winded, not to mention difficult. It is also easy for groups opposing the build to delay construction for a long time.

In San Francisco, the average cost of a new build is a humungous $330 for every square foot. Only New York is more expensive.

A survey last year conducted by Turner and Townsend, consultants found that the cost of building an apartment was on average $425000.

As you can imagine, this is pushing up the cost of housing by a large degree and making the housing problem much worst. Rents will continue to go up as long as the cost of construction remains so high. Also, construction will continue to require large public subsidies just to be viable, which is a problem for municipalities.

In a recent study conducted by UC Berkeley’s Terner Center for Housing Innovation contractors, architects and developers were questioned as to the high costs of the construction industry.

They found that their respondents thought that city authorities had a highly bureaucratic process of permits and that it was very hard to negotiate. They would hit regular problems at any point in the procedure, without any apparent warning.

There was also the complaint that there was not any communication between agencies and their bodies, which slowed down the entire process.

These findings prompted the previous mayor to call for a more joined up approach to housing. And also to implement a person in every department agency, responsible for the approvals process.

Other recommendations included that city employees should be the ones to help get construction projects through the approvals procedure and not private consultants, as is currently the case. They additionally requested an overhaul of building codes in the city.

Another major reason for the problems within the construction industry is the lack of workers, as well as apprentices, into the business.

Although this problem is beginning to be addressed, it is still a work in progress, as it takes between three to five years to train an apprentice and to become a fully experienced worker can take up to a decade.

In an ironic twist, it is also the cost of accommodation, which is driving young construction workers away from the city.

The average price of a new home is now $1.5 million, making San Francisco far too expensive for the average worker in the industry.

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Posted in: Professional Work, SF Construction
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