The Real.Est List
NYC Renovation Questions: Why is it so expensive to renovate in New York City? And what can I do about it?
Q. Why is renovation in NYC so expensive? And what can I do to cut costs without resorting to a shady contractor?
A. Life in New York City doesn’t come cheap, and neither does renovation.
Let's start with the fact that the logistics of construction here are downright challenging. Everything from the permit process to building access to delivering and staging the materials requires more time and planning.
Engineering and architectural fees required by NYC's strict building codes (which may not be needed elsewhere) add to your final tab too.
Costs to the general contractor are higher than a renovation in other places. For instance, they are required to have large business insurance policies to be eligible to work in most Manhattan buildings. The amount of required liability insurance starts at about $2 million and can go up as high as ten million dollars depending on the actual building.
Your building’s rules and work hours strongly influence the overall budget. Most New York apartment buildings have strict working hours, like 9-4:30 or even 9-3:30 Monday through Friday. That short timeframe includes set-up and clean-up. An actual workday may be just five hours or less.
In addition, certain buildings allow construction during summer months only (after Memorial Day and before Labor Day), to minimize noise and mess when most owners are traveling. Ninety days is a tight timeline to complete a renovation, and higher costs similar to a "rush charge" reflect this.
“Renovations cost more in New York City because they’re tougher than other cities," says Mike Kaler, a construction consultant (and, full disclosure, my husband) who has spent 5 years estimating construction costs and managing projects in Manhattan, following 10 years in Georgia. "Just the time it takes for a contractor to find parking, deliver materials, and set up to begin work each day can take an hour or two--and as the client, you’ll pay for this.”
(Indeeed, parking is a challenge in itself: “Often contractors get parking tickets and this is factored into the budget" ahead of time, says Kaler.)
General contractor Erik Nadoban says another reason labor costs are highest in New York is because expectations are so high.
“Skilled workers are the guarantee of a genuinely high-quality job, and New Yorkers are accustomed to (and expect) the best," he says. "Most clients demand high-quality bathroom fixtures, tiles, kitchen appliances, custom cabinetry and expensive finishes"--and usually, the more expensive the material, the more labor involved.
Nothwithstanding the inherent challenges of renovating in the Big Apple, there are a few things you can do to fight back against cost creep:
1. Hire an interior designer
It may sound counterintuitive to spend money to save money, but an interior "designer/decorator [can] help create a look for you that is beautiful but will not break the bank,” says Nadoban.
A design professional can also prevent you from making the very common mistake of buying materials and fixtures without understanding the potentially budget-busting installation costs.
“I've been in situations where a prospective client has purchased tens of thousands of dollars worth of fixtures, tiles, and lighting and has extremely specific design specs that need to be executed with serious precision," explains Nadoban. "But when presented with the labor costs for the plumber, tile contractor, electrician, plasterer, the potential client was shocked. Always consult a designer or contractor before buying materials.”
2. Get prices from at least three contractors
“Beware of the building super’s recommended contractor. Just about all superintendents get some kind of kickback or gift from contractors," says Kaler. "The recommended contractor is sometimes just the guy who tips big. He will ultimately pass these costs on to you. Be sure to get comparable bids from other renovators including the one your super wants you to use.”
That said, understand that hiring a contractor who gets along well with your super can be priceless in terms of saving you time and aggravation.
3. Ask your chosen contractor for advice
Don’t be afraid to ask your contractor for recommendations on how to cut costs and still get the end results you desire.
For instance, says Kaler, “Most prewar buildings have masonry walls. When updating the electrical, if you allow the contractor to build out the walls by one inch so he can run electrical wiring, this will cost less than the labor involved in repairing masonry walls.”
4. Stick to the scope
Remember that the five most expensive words in any renovation are "While you're at it...."
Be crystal clear about the scope of work and try not to create changes in the middle of a renovation. Change orders dramatically increase the cost of any renovation.
"Stick to the scope and you have a much better chance of staying within your budget," says Kaler.
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