Construction Costs – 89% less in Costa Rica than in my area of Seattle

I did a simple exercise that I perform regularly in the USA when analyzing local costs in locations outside our home area of Seattle metro or what we call “Pugetropolis” (4.2 million).

What I did was take two specific subcontracted items that are prevalent in Costa Rica, such as CMU block and stucco. I asked my friends in the Montezuma region who have construction projects on-going what a typical laborer earns and what a superintendent type with 20 years of experience might earn.

I developed supervisor to labor ratios for a composite labor rate, including benefits to the CAJA (26%), withholding (9%) and the 13th month bonus called aguinaldo. I then did research on pricing materials by having another Costa Rican friend who is a local groundskeeper and orders raw materials on a regular basis, to avoid getting the Gringo price. I did this for block, sand, Portland cement, mortar, grout and rebar.

What I found was astonishing:

The labor in Costa Rica across the board is 89% less than in the Seattle area. In a similar outlying area on the Olympic Peninsula in Washington there might be a difference of 15% less, as a San Jose vs Montezuma comparison, which would equate to 74% less in San Jose than Seattle. The overall cost of materials in Costa Rica was approximately 30% less than here, with the costliest item being steel.

The building cost here is approximately $150 – $160 per square foot without any land. Overall, the Seattle area is 3.6% above national levels in cost, New York is +31%, San Francisco is +23%, Phoenix is -11%, Houston is -12% and Miami is -11%. Unleaded regular gasoline is now the same cost here locally as in Costa Rica although diesel is cheaper in Costa Rica.

View property in Seattle is unaffordable at $1 million+ per acre or $2.47 million per hectare and not an equivalent comparison. I live 50 miles NW of Seattle within 1 mile of the Port Susan arm of Puget Sound on 5 acres. The nearest town is 12 miles, the nearest city is 20 miles — not equivalent.

There are several quaint, artisan towns on the islands and Kitsap Peninsula to the west of Seattle. This would be more equivalent to an area like Montezuma in Costa Rica and would involve a ferry.

The equivalent per acre cost of land within 1 km of Puget Sound view (not ocean) averages $250,000 per acre; on the water is $500,000+ however, I can purchase ocean view property in Montezuma, 1 km from town for less than $65,000 per acre.

Here’s the breakdown we used for our labor costs in Montezuma:

I would imagine commercial rates for San Jose multi-story or airport type work would have as much as a 50% premium over rural residential, albeit vacation structures, which the above Costa Rica rates represent.

The US rates used are union rates at my company and apply to commercial structures. Even if the 50% premium were added for San Jose commercial work, it would still translate into labor rates that are 81% less than Seattle. Seattle is 4% above US national average, thus the difference drops to 77%, Houston/Miami 66%, rural Mississippi 44%, San Francisco 100%, New York 108%.

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Written by VIP Member GRB who has two US university degrees, one in design, the other in architecture, and has been involved with architecture, construction and consulting since 1981. GRB is a regular visitor to Costa Rica.

Andrew Makarik

to@welovecostarica.com

Andrew Makarik is the main editor of WeLoveCostaRica, a fan of this sunny country. He is also a loving husband and a has a lovely daughter. By being a devoted family man and the biggest Costa Rica fan, he wants to make more people feel at home there. WeLoveCostaRica unites people and helps them find new home or a new travel destination. This website is a friendly community where everyone can find not only information, but also new friends and travel pals. Andrew is also passionate about IT and programming, so he himself maintains a friendly atmosphere in this cozy environment of WeLoveCostaRica.com.