Saturday, 20 December 2014

The curse of bureaucracy...


And a reminder that large parts of the USA are far removed from being that traditional descriptor, "land of the free". This is New York City|:

Mr. Brotter, 55, is an expediter, an imprecise term that is used to describe the men and women whose workdays are spent queuing up at the Manhattan branch of the New York City Department of Buildings to file the documents and pull the permits that allow construction projects — your kitchen renovation and the high-rise next door — to go forward. 

There are over 8,300 people who do the same job as Mr Brotter - getting paid to stand in a queue to see a bureaucrat so you can build your extension, install a new kitchen or get a new block of flats built. And this just adds to the cost of getting stuff done in  New York. As, Aaron Renn observed in citing this example:

Particularly when you are trying to build lower rent buildings, all of the fixed costs you have to incur to built anything (land, permits, expediters, etc.) have to be recovered and amortized across the units. When you have a hyper-complex development environment, these fixed costs raise the minimum viable rent threshold and thus push the cost of construction towards the higher end of the market that is already being served.

Put simply, the more hoops you make developers jump through, the more expensive the rents - and this is bad news if you want to meet housing demand in a magnet city like New York of London. And no the solution isn't to use taxpayers cash to subsidise a chosen few developers, the solution is to have fewer rules and fewer charges.



Anonymous said...

Although in some instances it has been real estate development and real estate management and ownership connections among people in city councils and in the mayor's office, them benefiting from things that drive up costs, allowing them to charge higher rents. So for the politicians who put in place some of these laws, some of it is to their own benefit if they own and rent out properties or have investments in such in some of these cities.

Anonymous said...

New York of London? We're not yet the fifty first State.