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Design a Better Boston Are you disappointed with the state of Boston's current architecture/development? Think you have a better idea? Post it here.

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Old 04-04-2013, 07:38 AM   #1
mass88
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The Economics of Buildings in Boston

Why is it more expensive to build in a city like Boston, or NYC than in a city like Houston, or Tampa.

Does anyone in the know, or who experience, have any insight into the economics behind projects being built in this city and why they cost more than projects elsewhere?

Is the higher cost of Boston overblown, as in it really doesn't cost more, or even that much more?

Do unions play a big role in driving up costs?
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Old 04-04-2013, 08:40 AM   #2
HenryAlan
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Re: The Economics of Buildings in Boston

workers do cost more here, but I don't think that is a significant cost relative to land and materials. The land is certainly more expensive. Aside from that, I can't really think of what else might drive up the cost.
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Old 04-04-2013, 09:52 AM   #3
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Re: The Economics of Buildings in Boston

Glaeser says zoning, regulation, permitting. Pioneer Institute's got a link to the study here.
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Old 04-04-2013, 09:55 AM   #4
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Re: The Economics of Buildings in Boston

I'm not familiar with the regulatory system in other cities, but take a look at Article 80 if you want to see how onerous the process in Boston can be.

http://bostonredevelopmentauthority..../Article80.pdf
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Old 04-04-2013, 10:30 AM   #5
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Re: The Economics of Buildings in Boston

All these things, but also space constraints and mitigation needs. Think about needing to get all those trucks and materials in and out of tight urban spaces.
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Old 04-04-2013, 10:42 AM   #6
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Re: The Economics of Buildings in Boston

Glaeser actually addresses space constraints. The numbers don't support land limitations being a major variable. It's one of those things that seems to make a lot of sense, but doesn't really pan out when you look at the numbers sum total.
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Old 04-05-2013, 10:02 PM   #7
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Re: The Economics of Buildings in Boston

If you're looking for the #1 factor, I bet it is the regulations. Perhaps needing to have the right connections can take a toll as well.
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Old 04-06-2013, 10:52 AM   #8
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Re: The Economics of Buildings in Boston

I'd say zoning is number 1. In Houston you can buy an acre of land and build an 60 story building as-of-right (or a 100 story building for that matter). In Boston, maybe the equivalent as-of-right zoning allows for 20 stories. So in Houston your spreading the cost of the land over 3x as many square feet. So when people talk about psf development costs, you're behind the 8-ball before you've even broken ground.
Permitting and uncertainty are definitely a huge factor as well.

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Glaeser actually addresses space constraints. The numbers don't support land limitations being a major variable. It's one of those things that seems to make a lot of sense, but doesn't really pan out when you look at the numbers sum total.
Aren't space constraints and zoning profoundly interrelated. Brookline is already built up into short residential neighborhood. So of course the zoning is going to call for short, residential developments. If you had large swaths of open space, you'd be less likely to run into NIMBY opposition.
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Old 04-08-2013, 09:11 AM   #9
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Re: The Economics of Buildings in Boston

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Aren't space constraints and zoning profoundly interrelated.
Yeah, in a lot of ways. In this instance though, the question is "does land in Boston cost a ton because there isn't a lot of empty space?" and the answer is that there's enough empty space that price doesn't correlate strongly with scarcity.
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Old 04-09-2013, 12:34 AM   #10
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Re: The Economics of Buildings in Boston

Now, I'm just basing this off my intuition (and I'm certainly not discounting how badly the regulatory environment slows things down), but I have to think that the lack of space isn't as big of a driver of costs as what is there.

In many urban locations built after WWII, the development that exists there, even when completely filled out, is not necessarily the kind of construction that prohibits further development or replacements. Or, simply put: There's less cost in tearing down a strip mall in a sprawling western city than there is in tearing down the childhood summer home of the brother-in-law of the third attorney general of the Commonwealth.

I'm almost inclined to think that mixed-use development, for all its 'pros' does engender greater NIMBYism than other types of development. Again, if you're surrounded by strip malls, who's going to complain about what you're building? If you're surrounded by offices, retail, and residential, suddenly, your development impacts many different types of neighbors differently, and they all want to air their grievances.
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Old 04-12-2013, 09:37 PM   #11
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Re: The Economics of Buildings in Boston

Most of Boston isn't at all 'mixed-use' or anything of the sort. The things that engender NIMBYism are the LACK of mixed-use development and overall stale marketplace with little new construction post-WWII.
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