The US has forgotten how to do infrastructure

I don&#x27;t know the answers, but as someone who works in the industry (on the design side). I think a big unmentioned factor is probably liability and the prospect of litigation.<p>If you look at old blueprints for projects in the past, they are a LOT less detailed. They had to be, because it was physically more difficult to produce them since they had to be drawn by hand. A lot was left to the contractor to figure out in the field.<p>Now, drawings are more detailed and contractors are incredibly reluctant to make even the smallest decisions on their own. They don&#x27;t want to assume the liability and risk getting sued if they do something wrong, so they push that off on the engineers and architects.<p>This means every time there&#x27;s a question, it has to be submitted through a formal process, tracked, answered, documented. And if the change has any cost impacts, the contractor tacks on a hefty premium because they know they can get away with it (and they probably underbid in the first place to win the job). Delays pile up, every clarification becomes an expensive change order, construction workers twiddle their thumbs while designers get around to addressing questions and this all costs money and time.

<p><pre><code> That suggests that U.S. costs are high due to general inefficiency [...] Americans have simply ponied up more and more cash over the years while ignoring the fact that they were getting less and less for their money. </code></pre> There&#x27;s a general effect in political systems, that if a law takes $20 from 1,000,000 people and gives $100,000 to 200 people, the people who lose money won&#x27;t have enough incentive to put up a big fight; but the people who receive money will have more than enough motivation.<p>For example, if a big irrigation project will force taxpayers to subsidise corporate farms, the corporations have a big incentive to spend on ads and campaign contributions. Or if you have to give $60 to a private company for tax filing software, they have a big incentive to lobby and make campaign contributions to keep the tax system complicated.<p>I&#x27;m sure construction projects are subject to the same pro-waste incentives.<p>I&#x27;m not sure what the solution to this is - campaign finance reform, perhaps?

Am also a design engineer, I specialize in water and wastewater works. My clients are all municipalities, with tight budget and politics are a factor. Engineering productivity has climbed thanks to computers, but construction productivity continues to decline. In my experience on small jobs this has a lot to do with safety and regulations. It takes a team of 2-3 to enter confined spaces (manholes) for momentary inspections or maintenance, it takes extra workers to set up traffic zones to ensure travellers are less of a danger to the workers. Time is taken to ensure archeological, agricultural, and culturally sensitive areas are not disturbed. Minority and women owned businesses are given contractual preference, whether they are most qualified or not. It takes a special (read: expensive) team several weeks to document trivial wetland areas (most people call them roadside ditches), and another person weeks of labor to explain how impacts will be minimized. The government sets standard labor rates for construction labor.<p>But these are things we as a society have deemed important. Its not acceptable for lives to be lost. It&#x27;s not acceptable for construction workers to accept low wages. It&#x27;s not acceptable to recklessly degrade our environmental resources, and it&#x27;s important to have diversity in this industry.<p>I don&#x27;t know if it&#x27;s true in other countries, but it seems the USA vascilates between priorities depending on the public administration. I am young so my experience is short. Bush saw a real estate bubble, Obama saw an insurance bubble, Trump et al aim for a construction boom. I would add that in New York my home state, a Democrat state, there is a large infrastructure program starting, so it&#x27;s not just Republicans.

I thought about this when I visited the Hoover Dam.<p>The audacity of the thing and sheer impossibility of doing anything remotely like it in today&#x27;s America makes it seem like a relic from an ancient civilization.<p>It felt like visiting the pyramids in Egypt.

From my perspective infrastructure is politically driven in the US. Projects are debated for decades, over this time changes are made to placate some groups and buy the support from other groups, and create jobs for some politician, until it baloons into something that is many billions of dollars. Then it is built as a one off mega project. At this point it should be killed but this is seen as the only way to get stuff done.<p>Things like CAHSR instead of agreeing on a goal and deciding we should have a CA-wide rail system, so then establish a division of Caltrans which we fund to incrementally build&#x2F;acquire&#x2F;run a network through ROW acquisition, running DMUs on the routes in the mean time, making it compatible with existing systems, etc. instead becomes one giant $60b acquisition that is master planned for a multi decade time frame to be built almost entirely as a stand alone system the benefits of which can&#x27;t really be enjoyed until decades in the future.

I&#x27;m pretty sure we&#x27;re so far invested in being crappy at government that we can&#x27;t feasibly turn back without inflicting a lot of pain.<p>Admittedly anecdotal, but after having lived near two major DOE national laboratories (where &gt;40% of my neighbors worked at the lab), I wouldn&#x27;t be surprised if 60-80% of the workers at these labs could be eliminated under a combination of audit-based reform, regulatory reform, and management changes. Without any change in output or results. I&#x27;ve listened to descriptions of what people do at these labs, and it blows me away how low productivity they are compared to the private sector. I&#x27;ve known people who work entire workweeks that could be consolidated into 3-5 hours of work, and <i>they&#x27;re willing to admit it</i>. In fact, those that would try to change from within have told me they would feel vulnerable to retaliation if they went through with it.<p>And that&#x27;s before we get into the shitshow that is federal contract work. We&#x27;ve turned federal contract work into a goldmine for whoever has enough lawyers to win a bid. And we don&#x27;t even know how many people are employed doing that contract work [0]!<p>At this point, meaningful reform means taking 10&#x27;s of millions of people and forcing productivity on them to the point where most of them are unnecessary. We could probably double the unemployment rate with the right reforms. That&#x27;s why it won&#x27;t happen.<p>[0] <a href="http:&#x2F;&#x2F;www.govexec.com&#x2F;contracting&#x2F;2015&#x2F;03&#x2F;even-cbo-stumped-size-contractor-workforce&#x2F;107436&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.govexec.com&#x2F;contracting&#x2F;2015&#x2F;03&#x2F;even-cbo-stumped-...</a>

This reflects in health care as well. American health care costs about twice as much as it does in every other first-world nation. Those systems run the gamut from fully socialist to mostly privatized, but they all share a common feature - they provide universal coverage at half the cost of the American system. That says there&#x27;s something uniquely broken in our model.<p>Infrastructure? Same thing. There&#x27;s something distinctly American in how slow and expensive it is. These are systemic issues, not some single-cause thing that [liberals|conservatives] can finger-point to a partisan villain.

I have been wondering lately if we have become so dependent on certain sectors of the US economy (housing, infrastructure, healthcare, education) that risk aversion is suffocating innovation.<p>No one wants to send their kid to an unproven, experimental university. No city wants to beta test a new style of road building. No patient wants to be the first to try a new treatment. We are so dependent on these things that the cost of failure is astronomical. Because no one is willing to try new methods of doing things, costs never go down. There are marginal improvements, for sure, but no disruptive changes.<p>It feels like a weird manifestation of NIMBYism. We all want innovation, but we want to test it on someone else first.

Related to what we might label &quot;modern&quot; infrastructure, I just got back from a trip visiting the outskirts of Illinois.<p>The towns there are small, but full of people hungry for opportunities and good work.<p>Yet everywhere you go there is no work to be done. Businesses—even big box stores like Walmart or Target—are closed down. Homes lay vacant despite their reasonably cheap (at least for someone living in Silicon Valley) $20,000 price tag. Even churches in the area have to close their doors but leave their steeples standing, unable to draw in an audience or—and most importantly—any money to maintain things.<p>This isn&#x27;t Detroit I&#x27;m talking about, it&#x27;s a fairly typical suburb of a larger metropolitan area in the midwest.<p>The answer for many of these people has largely and loudly been: &quot;Bring back jobs from overseas! Stop outsourcing work to China!&quot;<p>But of course that&#x27;s not a valid answer, since the problem is that the jobs these towns once knew now belong to machines which can work tens of times harder and longer at a fraction of the cost of their former human counterparts. Yes, some of the work has gone overseas, but much of it has just become &quot;modernized&quot; by technology.<p>And here&#x27;s the thing: the infrastructure for things as simple as Internet access in these parts of the US just isn&#x27;t there.<p>So nobody goes to school to learn programming or design or how to be a modern entrepreneur because they (the individuals and schools) just don&#x27;t have any connection to those parts of the landscape. And when they do, their model is wildly out of date.<p>One of the Universities I visited and, later, a high school had each <i>just</i> opened a computer lab for students in which the goal wasn&#x27;t to help students learn programming, or design, or anything like that, but merely how to type.<p>This of course added on top of the decrepit roads, buildings, etc. The state is wildly out of money because it can&#x27;t put people to work, and the people can&#x27;t work because the infrastructure just isn&#x27;t there. It&#x27;s depressing to see, really. I want to know how we can improve this, and what someone living on the other side of the country might do to help.

The Slate Star Codex essays on &quot;cost disease&quot; are as usual a must read:<p><a href="http:&#x2F;&#x2F;slatestarcodex.com&#x2F;2017&#x2F;02&#x2F;09&#x2F;considerations-on-cost-disease&#x2F;" rel="nofollow">http:&#x2F;&#x2F;slatestarcodex.com&#x2F;2017&#x2F;02&#x2F;09&#x2F;considerations-on-cost-...</a><p><a href="http:&#x2F;&#x2F;slatestarcodex.com&#x2F;2017&#x2F;02&#x2F;17&#x2F;highlights-from-the-comments-on-cost-disease&#x2F;" rel="nofollow">http:&#x2F;&#x2F;slatestarcodex.com&#x2F;2017&#x2F;02&#x2F;17&#x2F;highlights-from-the-com...</a>

Vague talk of inefficiency in construction isn&#x27;t really very informative. Has anyone ever done a study where they take two very similar projects — building a medium sized office building, for example — in the US and China, and following them both from beginning to end, auditing exactly how much money and time is spent on each stage? It seems like this would provide a useful basis for comparison.

I don&#x27;t know if &quot;forgotten&quot; as used in the title is the correct word so much as just &quot;out of practice.&quot; Look at this list of infrastructure projects in China in the last decade or so:<p><a href="http:&#x2F;&#x2F;www.businessinsider.com&#x2F;giant-chinese-infrastructure-projects-that-are-reshaping-the-world-2016-6&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.businessinsider.com&#x2F;giant-chinese-infrastructure-...</a><p>It&#x27;s hard not to be impressed by that list. And China is undertaking these scale projects abroad as well from Latin America to Africa.<p>It&#x27;s should be no surprise that you get really good at something the more you do it. What was the last project that the US Federal Government undertook on a similar scale as one of these? &quot;The Big Dig[1]&quot;? Notable for being the most expensive highway project in US history and yet served only Boston?<p>The US seems to spend interminable months squabbling over whether or not its un-American to use imported steel to replace parts of its crumbling infrastructure(see Bay Bridge, Tapan Zee projects etc.) while the Chinese seem to spend that time actually executing the project.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Big_Dig" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Big_Dig</a>

&gt; Yet France’s trains cost much less.<p>Decades of expertise might be a reason here, France has the longest amount of (high speed rail miles &#x2F; country area), and the non high-speed network is also huge. It&#x27;s also possible that the monopoly of having only one, state-owned, railroad company (SNCF) let that company negotiate&#x2F;choose better prices much more aggressively than if there was many companies. I don&#x27;t think it was stupid at the time to have such a state-owned monopoly for building this key infrastructure.<p>Also I&#x27;d think that with that big of a network, some things start to become less costly because of economies of scale. Last April SNCF bought <i>30</i> trains to Alstom for 250m€, with the current US infrastructure I doubt the US needs that many trains. If one day like France they have 450 high speed trains, maybe it&#x27;ll cost them less to have more built.<p>Japan and France are dense countries, the area of France is roughly equal to the area of Texas, it&#x27;s hard to imagine 450 high speed trains there, where they&#x27;re struggling to even get one high speed rail line between Houston and Dallas.

It costs extra because CORRUPTION. They&#x27;re skimming off the top at every level, and that&#x27;s why they can&#x27;t let anyone investigate.

I recently ran into the MDOT project manager for a rebuild&#x2F;expansion of a section of I-75. With some googling I found that she was working on the project since 2001 - construction started in 2016 and is not scheduled to be completed until 2030.<p>So she will be working on the project for 30 years; her entire career... something is pretty broken about the government structures around these projects.

That&#x27;s because income taxes on the wealthy are way too low, which incentivizes stuffing income into real estate, stocks, and bonds.<p>Earn a million dollars worth of either earned or unearned income, and you pay either (simplistically) 39.6% on earned and 23.6% on unearned income. That&#x27;s too f&#x27;n goddamn cheap. It encourages peopel to pay that tax and put it into one of the above, rather than take the risk by starting or growing a business and taking a tax deduction for business expenses.<p>When the silent generation was in charge of things, income tax was never less than 75% for the top tax bracket, for over 40 years. And during that time there was massive private and public infrastructure being built, and we didn&#x27;t have a $20 trillion national debt.

I suspect that part of the problem is that expertise doesn&#x27;t reside in monolithic corporations and governments anymore, but in specialist consultant companies that have relatively high fixed costs and thus must charge more to make a profit. In addition I suspect that there are a lot of lookalike consultant companies that charge a lot of money in exchange for kickbacks but don&#x27;t provide any value.

My brother and father (concrete construction) would probably lay the blame on onerous regulation. They regularly complain about nit-picky engineers with their insistence on (in their words) unreasonable slavish devotion to engineering specifications. I&#x27;m not on the jobsite so I don&#x27;t actually know.<p>I wonder is our construction regulations are much more stringent than other western nations?

It seems to me like the biggest things that have changed are the safety regulations on the construction process itself and the finished product. The golden gate bridge was built in a few years, but with a few worker deaths. Building a new bridge like the golden gate today would likely be illegal, and take ~25 years.

So I worked for the family construction firm for a few years. The amount of ass covering, paperwork and complexity to what should be a simple thing was amazing. The amount of litigation involved when anything was not as expected was amazing vs. just trying to sort it between the those involved. My father build a $M business on just doing change orders &amp; claims. There is your problem.

We haven&#x27;t &quot;forgotten&quot; how to do anything. We just let ourselves (collectively) become OK with projects that extraordinarily long, slow, and expensive, and the contractors aren&#x27;t going to be the ones to force positive change in the system.

The fastest that I&#x27;ve seen infrastructure put up in the US is where there are toll roads being built.<p>I suspect this is because there is a high incentivize to get a toll road up quickly and start generating revenue to pay back the initial investment.<p>Residents generally hate tolls, but its a good motivator for infrastructure to go up quickly.<p>I never understood why similar incentives wouldn&#x27;t kick in for mass transit projects.

This article from 2011 (<a href="http:&#x2F;&#x2F;washingtonmonthly.com&#x2F;magazine&#x2F;marchapril-2011&#x2F;more-bureaucrats-please&#x2F;" rel="nofollow">http:&#x2F;&#x2F;washingtonmonthly.com&#x2F;magazine&#x2F;marchapril-2011&#x2F;more-b...</a>) makes a compelling case that, after decades of cutting government jobs and creeping privatization, we simply don&#x27;t have enough bureaucrats to organize and run large, complex projects anymore. These other countries having success with infra projects still do. Thus the issue.

After the collapse of the 35W bridge, the new bridge the took its place was built ahead of schedule and on budget. As with many things in history, disaster seems to hone our ability to overcome obstacles and get things done.<p><a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;I-35W_Saint_Anthony_Falls_Bridge" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;I-35W_Saint_Anthony_Falls_Brid...</a>

One important factor unmentioned so far: Federalism. The US has very strong state and municipal governments compared to France and Japan. In many cases, any one of the three can veto a project. A new commuter rail line under the Hudson River connecting NYC and NJ was begun in 2009 and NJ Gov Chris Christie killed it in 2010 (citing cost overruns), after $600m had already been spent.

Is inefficiency inefficiency when it&#x27;s done on purpose? That&#x27;s what the article misses. The salaries of workers might not be higher than in other countries, but I bet what we pay contractors vs. what they produce is beyond astronomical. It certainly is when government contracts out software. With modern computing, I don&#x27;t see why we don&#x27;t keep track of costs down to the penny. A new hammer is bought to continue construction? The receipt is scanned and everything is tracked. You don&#x27;t scan it, you don&#x27;t get reimbursed. All actual costs are known and the profit margin can be calculated from there. It might not help that much until more data is collected and future projects can be estimated better using that data, but it sure as hell beats the current model of guessing the lowest estimate to get the contract, getting the contract, and then spending 10-1000x the estimate.

I hate to be snarky, but there&#x27;s another factor: laziness.<p>When there&#x27;s a replacement bridge under construction around here, business at the local dunkin donuts goes up ALL DAY, not just at lunch and shift change. Everybody&#x27;s there: laborers, supervisors, delivery drivers, managers, engineers, owners&#x27; reps from the state DOT and the towns involved.<p>And, in Massachusetts we have a peculiar extra cost: The police force has a monopoly on doing the traffic safety work that flag people do everywhere else. They have the right to arrest people who work in or near roads if they start working without a paid police detail on the site, or keep working after the police detail leaves. Slows work down; gives people a reason to wait around after arriving on the job.

There is some poor analysis in the article with regards to Davis Bacon Act, they approached it and then missed what it was telling them.<p>Here in Hawaii, Laborer Prevailing Wage is $50+ an hour, toss on our mandatory insurances worker&#x27;s comp and taxes and it costs almost $80 an hour to pay that worker before profit and other overhead.<p>Laborer rates vary by locality, but no construction worker who gets more than 3-months of Davis Bacon pay is averaging $35,000 a year it&#x27;s going to be closer to $50,000.<p>Whenever we do any State, or Federal work there is a huge stack of submissions that have to be made, I kill trees like it was my job, shoveling paperwork out the door for these projects.

&gt; There is reason to suspect that high U.S. costs are part of a deeper problem.<p>Maybe this is mere cynicism, but if the workers and materials don&#x27;t cost that much more than in France, my immediate reaction is &quot;excessive profiteering&quot;, or, to put it another way, &quot;because we can, and nobody is stopping us&quot;.<p>The same applies to our unreasonably high education costs, and healthcare (although that&#x27;s much more complex an issue, but at its root, it is too many fingers in the pie).

I wouldn&#x27;t be surprised if infrastructure costs and delays were going up everywhere though, including France. Would be nice to have actual data.<p>I think it comes down to new non-functional requirements: safety, environmental concerns, accessibility, liability protection, etc. With these requirements, Paris or London or New York would have never had a subway system in the late 1800&#x27;s or early 1900&#x27;s. By now though, all these systems have been maintained and modified to comply to the new non-functional requirements over time.<p>So if you added the accumulated cost of running a subway system today, while adding all the maintenance costs over time, it might be the case that the cost of building the same thing from scratch would be cheaper, but unfortunately without the benefit of having passengers enjoy it (and pay for it) for over 100 years (thus partially subsidizing the maintenance costs).<p>So you could even consider something as rigid as a subway system built in an &quot;agile&quot; way, with a quick and literally dirty MVP out of the way early, and additional non-functional requirements added over the course of decades. It&#x27;s just that those requirements weren&#x27;t known or wanted initially.<p>Now would it be ok to do the same now? Have a subway system in a city that needs it, but without bathrooms in stations, with no pollution requirements initially, not accessible to the disabled, (name your other requirements not necessary for a MVP), but with the benefit that at least it exists now, it can be subsidized by passengers that are willing to use it, so that over time those other requirements are met. Better have them later than never.

It&#x27;s a symptom of captured large government in the US.<p>The smaller 25k person town I live in doesn&#x27;t nearly have the same issues. We&#x27;ve managed to put up new school buildings the last couple of years with not too much fuss and on budget. On the other hand, the town is relatively well off and there is seemingly good community participation.

Too many value extracting rentier owners and valueless executives skimming off the top of projects done for the common good.

This article was frustrating to read because it is clear the author did not do one iota of research. He identified a problem with American construction sector being inefficient or not-cost effective and did nothing to even attempt to answer why - yet still managed to stretch that one thought into a 1000 word essay.

I-85 in Atlanta was repaired in just over 6 weeks. So things can get done quickly if the incentives are right.

By U.S. I think they mean the Federal Government. It&#x27;s possible to build very large projects, presumably to code and under proper safety standards, in America if one desires. Here are two examples which come immediately to my mind. I&#x27;m sure they are many more examples.<p><a href="https:&#x2F;&#x2F;www.tesla.com&#x2F;gigafactory" rel="nofollow">https:&#x2F;&#x2F;www.tesla.com&#x2F;gigafactory</a> <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Apple_Park" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Apple_Park</a><p>I think the Federal Government looks at infrastructure as jobs programs and this is why they are drawn out. The job is the end not the thing they&#x27;re actually building.

&gt; U.S. costs are high due to general inefficiency -- inefficient project management, an inefficient government contracting process, and inefficient regulation. It suggests that construction, like health care or asset management or education, is an area where Americans have simply ponied up more and more cash over the years while ignoring the fact that they were getting less and less for their money. To fix the problems choking U.S. construction, reformers are going to have to go through the system and rip out the inefficiencies root and branch.<p>That&#x27;s a tall order. It&#x27;d be nice to see the article suggest a way to accomplish that.

In my state, a contractor was paid to build a major highway using concrete pavement. If done properly, such a road should last 40 years or more, and without the thumpity, thumpity sound you get when the concrete is not put down properly.<p>The contractor was not experienced and totally muffed the job.<p>Rather than penalizing the contractor, they paid the contracter to build the road again, plopping asphalt on top of the concrete after grinding the concrete and redoing the joints that they screwed up. The asphalt hasn&#x27;t lasted that long, so it will need to be redone again soon.<p>So, the contractor was inept, but so was the government overseer.

Durability. Its one thing to quickly and cheaply add infrastructure, and I&#x27;ve traveled the world to places where this is accomplished at a dizzying pace. Its another thing altogether to engineer and build projects that can endure over time and in the face of natural and unnatural disaster.<p>Yes, the US is overdue for infrastructure investment. Yes, its costly and unproductive Federal and State entitlement obligations compete for these dollars. But the expense of building infrastructure in the US is justified by the longevity of its engineering and build quality. This is not the case globally.

I posted this here the other day, I&#x27;m not a civil engineer so I&#x27;m sure there are things I&#x27;m missing but the idea seems to have some merit: <a href="https:&#x2F;&#x2F;www.jefftk.com&#x2F;p&#x2F;replace-infrastructure-wholesale" rel="nofollow">https:&#x2F;&#x2F;www.jefftk.com&#x2F;p&#x2F;replace-infrastructure-wholesale</a><p>It doesn&#x27;t address any of the numerous political issues with American infrastructure, but it could be good for repair and maintenance

Why all the guesswork about why it costs so much?<p>That sort of thing should be readily explained by accounting: follow the money.<p>Public infrastructure should be financially transparent.

In Detroit, lawmakers recently passed legislation making it hard to sue the city for crumbling sidewalks.<p><a href="http:&#x2F;&#x2F;www.freep.com&#x2F;story&#x2F;news&#x2F;local&#x2F;michigan&#x2F;2017&#x2F;01&#x2F;05&#x2F;sidewalk-slip-fall-accident-lawsuit&#x2F;96228496&#x2F;" rel="nofollow">http:&#x2F;&#x2F;www.freep.com&#x2F;story&#x2F;news&#x2F;local&#x2F;michigan&#x2F;2017&#x2F;01&#x2F;05&#x2F;si...</a>

Is there any way to do a bottoms up analysis of infrastructure projects like this and see where the differences come from? I imagine the costs on projects like these are pretty finely broken down, although I&#x27;m not sure how one would go about actually getting the numbers to analyze.

They are comparing it to health care, which suffers from a serious excess of bureaucracy. So I will suggest that too much bureaucratic red tape is likely a factor.

As the value of a law degree has ran way ahead of more hands-on professions, this is the result. Constitutional amendment: JD&#x27;s banned from public office

The US hasn&#x27;t forgotten. Nor is this unique to the US. It seems to be a widespread issue in the developed world.<p>The problem is that labour is simply too expensive now. And, to a lesser, extent, so is real estate.<p>In the 2000s Australia experienced an unprecedented resources boom fuelled by China&#x27;s growth. This especially impacted Western Australia and Queensland. WA in particular is rich in iron ore, oil and gas and other resources.<p>In Perth in 2000 you could buy a 70s 3 bedroom house within a few miles of the city center for &lt;A$100k. By 2005 it was $350k. Capital projects for the resources industries were in the works amounting to over A$100B. All of these have a huge construction component that soaked up the construction supply.<p>In the 90s you could build a house in as as little as 3 months. From the early to mid 2000s that time frame is now closer to a year and costs 5 times as much.<p>So homes became much more expensive. Of course building commercial and industrial property also got more expensive. Property costs are a significant input cost into any business that operates there. Increased residential costs soak up disposable income and lead to wages growth. Increased wage costs makes things more expensive and the cycle continues.<p>So Perth transformed in the 1990s from a city that was very affordable with a good standard of living to one of the haves and have nots. The haves are those in the construction and resources industries. They were making crazy money. Everyone else was pretty much a loser.<p>Arguably this is dutch disease [1].<p>So now the city wants to do things like build train lines. Well labour is stupidly expensive because the cost of living is so high and buying up real estate to put said train line on is also super expensive.<p>A lot of people don&#x27;t seem to feel this because they&#x27;re incumbents (ie they bought their houses 15+ years ago). Others have immigrated so have foreign money bypassing the local economy.<p>So look at the Second Avenue Subway as one example. $17B for a few miles of tunnels? Really? Well that&#x27;s the cost of labour in the US and real estate in Manhattan. Since it&#x27;s underground I don&#x27;t imagine a large percentage of the total cost is real estate either.<p>So it seems like when a lot of this infrastructure was built, the relative cost of labour was much lower. The standard of living was also much lower, apart from the 1950s and 1960s, which can be viewed as a transitional anomaly more than a normal equilibrium.<p>[1] <a href="https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Dutch_disease" rel="nofollow">https:&#x2F;&#x2F;en.wikipedia.org&#x2F;wiki&#x2F;Dutch_disease</a>

Do these construction costs inefficiencies also appear in construction projects that are privately funded? Or is it just publicly funded projects?

Because the developers have learned how to play politics for more money?

Too much compliance and suing by lawyers&#x2F;everyone.

Is excessive profit taking eating up the productivity?

It&#x27;s not that we have forgotten. It&#x27;s the fact that regulation, time to get approval, and other red tape make the timeline longer. Gone are the days when things just get done.

An African government official visits Europe. There, a European government official invites him to his luxury home. The African is shocked.<p>He asks &quot;How can you afford such a house if you a just a government official?&quot;<p>The European says: &quot;Look out of the window. can you see the bridge?&quot;<p>The African: &quot;Yes&quot;<p>The European: &quot;See, the government paid for two train tracks but the bridge has only one.&quot;<p>The African says: &quot;I understand&quot;.<p>2 years later the European official visits the African in Africa. He invites him into his house and his house is a luxury palace.<p>Now the European is shocked. He asks &quot;How can you afford such a palace? Recently you were so impressed with house and now you live in a palace?&quot;<p>The African says: &quot;Look out of the window. can you see the bridge our taxpayers paid for?&quot;<p>The European: &quot;No.&quot;

The solution is shrinking the state to the bare minimum and making as many transactions as possible voluntary.