|The Manhattan Institutes|
Center for Rethinking Development
Ideas that shape the citys planning, housing, and development
|A Monthly Newsletter by Julia Vitullo-Martin, MI Senior Fellow|
With its building costs some 33 percent higher on average than in other U.S. cities, New York City is the uncontested holder of the nation’s Building Cost Heavy-Weight Championship title. The average hard cost per square foot for a high-rise building nationally is $113, according to the Merritt & Harris consulting firm. But the same building would cost $154 per square foot in New York City, or 36 percent more. It would cost only $125 in Chicago, or 19 percent less than in New York. Similarly, the cost of a mid-rise residential buildinga cheaper form of constructionis 4 percent less in Los Angeles than in New York, 10 percent less in Chicago, and 22 percent less in Dallas, according to a study by New York University’s Furman Center for Real Estate and Urban Policy.
Like every other academic analyzer of construction costs in New York, the Furman Center points to the city’s voluminous, detailed, complex, idiosyncratic, redundant, and arcane building code as a major culprit. The code directly affects the costs of construction by dictating the types of materials that can be used in a building, detailing the kinds of structures that can be built, and establishing the code compliance review processitself a significant barrier to construction.
Now a move is on to replace the culprit with a more appropriate and rational system, the International Building Code, which is made up of three model codes that have been used in much of the country for decades. "The IBC really does have a track record from a construction standpoint," notes Marolyn Davenport, senior vice president of the Real Estate Board of New York.
While New York’s code has not been changed significantly since 1968, says Department of Buildings Commissioner Patricia Lancaster, it has had countless regulations and amendments woven into its 700+ pages, resulting in an index-less document that is extremely difficult to navigate. Subjects are often treated in more than one section and covered by contradictory regulations, leading to inconsistent interpretations by DOB inspectors, delays, and increased costs. Luis Torres, DOB’s Executive Director for Code Relations & Compliance, says, "You have five people look at some provision in the code, you get five interpretations." As the mayor’s advisory commission on the building code pointed out, DOB’s review process is so cumbersome that it has even spawned a flourishing industry of expeditors, who are knowledgeable in code requirements and skilled in their ability to maneuver through the complex approval processes. Expeditors add another layer of cost and, of course, constitute a major corruption hazard.
ADOPTING A NEW CODE
This is the second time in recent memory that DOB has undertaken the revamping of a major code. In 2002 it adopted the National Electric Code as the model for the city’s electrical code, which had become badly outdated. It set up what it called "consensus-building technical committees" to review every technical standard and propose the final legislation, which sailed through the City Council.
To review the building code, Commissioner Lancaster established 13 working committees, each composed of a wide range of industry experts, design professionals, labor representatives, government officials, architects, engineers, and what she calls "stakeholders." The committees have gone through every section of the IBC and, where necessary, are recommending modifications to adjust the IBC to New York conditions. These modifications are, of course, often contentious.
But New York’s building code has its proponents, including those who argue that the city’s peculiar topography and high density mandate a stringent, specialized code reflecting local circumstances.
HOW BAD IS THE CURRENT CODE?
Further, the code has always been subject to the pressures of special interests. Take plumbing home rule. The code requires that any business that engages in plumbing work in New York City be majority owned by a licensed New York City master plumber, whose home base is within city limits. Proponents argue that this home rule requirement adds an additional level of protection and accountability, ensuring New Yorkers that plumbers respond to local needs. But, of course, it also restricts competition, thereby increasing costs.
And because New York’s code approves and disapproves products at an astonishing level of specificity, the DOB hearings on code reform were full of manufacturers, such as Hoover Treated Wood Products, Safe Glow photo luminescent systems, Escape Rescue Systems, BlazeMaster Fire Sprinkler Systems, and others. Manufacturers lobby to be approved by the code not only to qualify for New York City’s own business, but for business elsewhere. As Robert Hackworth of the Steel Joist Institute testified, "Many municipalities follow standards established by New York City and thus any such exclusion standard adopted by New York City will have far reaching repercussions causing undue harm to the steel joist industry."
De-politicizing building code reform will not be easy.
IBC has tremendous support from all elements of the construction industry, with the exception of the plumbers union, which is promoting an alternative code, the NFPA 5000. DOB argues that NFPA 5000 is new and untried. It has been adopted by two small municipalities, one in Maine, the other in Texas, but not by any major city.
The major substantive danger lies in the possibility that the city will combine the most stringent aspects of the IBC with the most stringent aspects of New York’s current building code, causing construction costs to soar ever higher. If that happens, warns REBNY’s Davenport, "The mayor’s 65,000-unit affordable housing plan will become the mayor’s 32,000-unit plan."