The Cost of Building

Buildings are inherently very expensive objects. Expense can be measured ultimately in two quantities, the amount of physical resources consumed and the human time consumed. The physical resources can be assessed only in relative terms, but with human time we can be much more precise. The average house in America requires a total of about one-fifteenth of a human’s working lifetime to produce. An average Manhattan skyscraper uses, in total, the equivalent of the entire useful lives of 50 to 100 workers in its construction and the equivalent of several lifetimes per year in its maintenance. Very large buildings often cost several times this amount.

As to why buildings are so expensive, this is best learned by working on the construction of a building. Even a small, utilitarian building uses copious tonnages, volumes, and areas of costly materials, most or all of which must be lifted, positioned, and joined by human labor. The number of nails, bricks, or bolts consumed is often staggering, and each such component involves the expenditure of a finite and nontrivial amount of human time. The number of separate operations required to complete even the simplest building detail is quite surprising. Such necessary activities as managing workers, ordering materials, thinking through problems, planning the next stages of construction, keeping records, and paying bills also take up large amounts of time. The totals rise quickly, and one soon realizes that we have become accustomed to constructing very large and very expensive shelters.

Once the design of a building has been established, economy in building construction is a matter of good management. Good management requires the best and most efficient use of workers, tools, materials, and money. As much work as possible should be done under shelter, preferably in a factory, where working conditions are ideal and there is a high level of mechanization. Workers on the building site need to be choreographed carefully so that they are neither standing idle nor getting in one another’s way. Materials need to be obtained at the lowest possible price, but only at the required level of quality, and only from reputable suppliers. They should be delivered as needed. If they arrive on the site too late, they will hold up work. If they arrive too early, they will take up storage space on the site. They are also more likely to be damaged before installation by weather or accident, are more subject to pilferage, and have to be paid for earlier.

A good building contractor treads a tightrope, bidding low enough to win work in competition with other contractors but high enough to realize a fair profit. A contractor that bids consistently low will likely end in bankruptcy through losing money on too many projects. One that bids consistently high will become insolvent by never winning projects to build. When a contractor wins a project at a fair price, he or she must manage the project closely and knowledgeably, both to maintain the expected profit margin and to produce a well-built building. Construction is a risky and highly skilled profession. New contracting companies come and go rapidly. Only responsible, competent contractors survive for very long.

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