London is the world’s most expensive city to build in, but the reasons may surprise you. The city is well known for its high cost of living despite being far less crowded than cities such as Tokyo and New York. In fact, commercial real estate in London’s West End costs nearly twice as much as similarly sized spaces on New York’s Madison Avenue.
This video from the Economist reveals how these high costs arise thanks to the city’s historic infrastructure. Vast networks of underground tunnels, unexploded World War II bombs, ancient Roman ruins, and narrow medieval roads all make construction in the city a highly specialized endeavor. These difficulties, combined with strict historical preservation regulations drive up costs even more. However, architects and developers are not deterred, and are willing to pay high prices for the privilege of building in London.
