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Source: http://www.economist.com/news/britain/21611086-why-building-worlds-most-popular-city-so-difficult-and-expensive-bodies-bombs-and London’s costly construction Bodies, bombs and bureaucracy Why building in the world’s most popular city is so difficult and expensive Aug 9th 2014 | From the print edition CROSSRAIL, a new underground railway line, is the main engineering marvel near Tottenham Court Road station in London. Few passers-by realise that another immensely complex construction project is under way nearby. At Rathbone Place, an old postal sorting office is being demolished to make way for a new block of offices and apartments. The entire building must be removed through one narrow exit onto busy Oxford Street. Beneath the site lies a disused underground railway once run by Royal Mail, which must not be disturbed. Even as your correspondent visits, the developer, Great Portland Estates, discovers an ancient electricity cable buried under the foundations. Much of central London is being knocked down and rebuilt. Some 7m square feet of office space is due to be added this year—the most since 2003. Relative to the existing stock, more offices are going up in the capital than in any western European or North American city. Yet building offices (and homes) near the middle of the capital is shockingly expensive. Even before the cost of land is considered, it costs roughly a fifth more than erecting similar stuff in New York or Hong Kong, according to Turner and Townsend, a consultancy firm. The challenges at Rathbone Place help to explain why. London’s history throws up many problems. Unexploded bombs dropped by the Luftwaffe still turn up surprisingly often, as do interesting medieval bodies. The opening of Bloomberg’s new headquarters in the City was held up by the discovery of thousands of Roman artefacts, including a rare phallic good-luck charm. London’s underground networks—including the Tube, but also sewers, various government tunnels and oddities such as the Royal Mail railway—must be negotiated. The city’s medieval street pattern means that buildings cannot always have straightforward 90-degree corners. Narrow streets make moving vehicles and machinery around construction sites far more expensive than in other cities. Typically, construction begins with a small crane, which lifts in vehicles and in turn erects a bigger tower crane. These cranes cannot operate from roads or overhang existing buildings, which explains why so many of the ones in London are elaborate, multi-jointed things. Sometimes they must be custom-built. The planning system then adds all sorts of expensive complexities. In Westminster more than 75% of land is covered by 56 conservation areas protecting the historic appearances of streets, right down to the colour of paint on doors. At another Oxford Street site, Great Portland Estates must lift up an old façade and scoop out the rest of the building from behind it. During this process, neighbouring buildings must be protected—not only structurally but also from noise and dust. Taller buildings are trickier still. They must not block designated views of various landmarks, which explains why some of the skyscrapers in the City of London are oddly shaped. The curious wedge-shaped Leadenhall Building, known as “the cheesegrater”, is intended to protect a view of St Paul’s Cathedral from a pub in Fleet Street. The design also means that the building cannot have a central concrete core, as in most skyscrapers. Instead, the floors are held up by an innovative steel exoskeleton. This makes for a thrilling journey up the building’s glass lifts. But it does add somewhat to the cost. Developers have adapted to these constraints as best they can. Construction is modelled by computers long before the first crane is installed. Each day’s work is planned almost to the minute and materials delivered when they are needed, much like the “just-in-time” methods long used in car factories. Many parts are brought in ready made: fully 85% of the Leadenhall Building was manufactured in the Midlands and Northern Ireland. But the sheer complexity of building in the capital makes for a small, specialised industry with high barriers to entry. Outsiders who try to negotiate London’s planning system often get in trouble, notes Toby Courtauld, Great Portland’s boss. Getting projects approved requires more than mugging up on planning regulations: plenty of rules are unwritten, while political objections can be unpredictable. Incumbent developers know the vagaries of the system. Newcomers do not. All this raises costs, which are passed on to business tenants. And the slowness of building in the capital means that offices are often finished at the wrong time, at the low point in an economic cycle: a slump in construction starts three years ago means supply will crash next year. Putting up buildings is far quicker and easier in other cities, such as Birmingham and Manchester, and also in London suburbs such as Croydon. But developers persist with inner London anyway. Office rents and land values are high enough to support even some outrageously complicated projects. Leasing office space in the West End is twice as expensive as in Madison Avenue in New York. For all that the city’s skyline is dominated by cranes, were developers given free rein much more of central London would be being rebuilt. For firms struggling with high rents, that is frustrating. For Londoners who live and work next to construction sites, it may come as some consolation. From the print edition: Britain