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Episode 98: Elevators with Stephen Smith (Incentives Series pt. 2)

Smith, "Elevators"

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Episode Summary: Elevators in the U.S. and Canada cost 3–5 times as much as elevators in other high-income countries. Stephen Smith explains why, and how our well-intentioned elevator standards make cities less safe and accessible. This is part two of our series on misaligned incentives in housing policy.

  • Smith, S. (2024). Elevators. Center for Building in North America.
    Abstract: Americans make over 20 billion trips per year by elevator – twice the number of trips made by what people think of as mass transit. Despite the association between elevators and high-rises, the average elevator in the United States only has four landings, with elevators being as much a tool for convenience and accessibility as for able-bodied necessity. But despite being the birthplace of the modern passenger elevator, the United States has fallen far behind its peers. Elevators in the United States have remained a fairly niche item in residential settings – expected in a high-rise or a big new mid-rise apartment building, but otherwise largely absent from the middle-class home. In absolute terms, the United States has fewer elevators than Spain – a country with one-seventh the population, and fewer than half the number of apartments. And behind its lack of elevators, North America faces a crippling cost problem. The price to install an elevator in a new mid-rise building in the United States or Canada is now at least three times the cost in Western Europe or East Asia. Ongoing expenses like service contracts, periodic inspections, repairs, and modernizations are just as overpriced. High-income countries with strong labor movements and high safety standards from South Korea to Switzerland have found ways to install wheelchair-accessible elevators in mid-rise apartment buildings for around $50,000 each, even after adjusting for America’s typically higher general price levels. In the United States and Canada, on the other hand, these installations start at around $150,000 in even low-cost areas.
  • Part 1 of the Incentives Series, Single-Stair Buildings and Eco-Districts with Michael Eliason.

Key takeaways:

  • “The United States of America is a sprawling, car-centric country, but one form of mass transit stands out above the rest in sheer ridership: the elevator. The earliest elevators date back to antiquity, but it was in the mid-1800s that technological advances and urban trends came together to create the elevator and elevator industry that we know today. Its center was in New York City, where the elevator made the leap from hotels and stores to the office building in 1869, with the construction of the Equitable Building. The elevator allowed Lower Manhattan to pierce through the de facto five-story height limit imposed by humans’ willingness to climb stairs and, along with steel frame construction, led to the invention of the skyscraper, changing the skylines of American cities before conquering the rest of the planet.”
  • “Americans make over 20 billion trips per year by elevator – twice the number of trips made by what people think of as mass transit. Despite the association between elevators and high-rises, the average elevator in the United States only has four landings, with elevators being as much a tool for convenience and accessibility as for able-bodied necessity.”
  • “When elevators were first popularized in the 19th and early 20th centuries, they were found mostly in taller buildings …  But since World War II, the trend in Western Europe (and, later, East Asia) has been to install elevators not only in buildings that absolutely need them given their height, but in any new apartment building at all – and many older ones too. They’ve become as routine in high-income countries in Western Europe and East Asia as a washing machine or parking space, and moving into a building with an elevator has become a normal part of the aging process.”
  • “But despite being the birthplace of the modern passenger elevator, the United States has fallen far behind its peers. Elevators in the United States have remained a fairly niche item in residential settings – expected in a high-rise or a big new mid-rise apartment building, but otherwise largely absent from the middle-class home … In absolute terms, the United States has fewer elevators than Spain – a country with one-seventh the population, and fewer than half the number of apartments.”
  • “And behind its lack of elevators, North America faces a crippling cost problem. The price to install an elevator in a new mid-rise building in the United States or Canada is now at least three times the cost in Western Europe or East Asia. Ongoing expenses like service contracts, periodic inspections, repairs, and modernizations are just as overpriced. High-income countries with strong labor movements and high safety standards from South Korea to Switzerland have found ways to install wheelchair-accessible elevators in mid-rise apartment buildings for around $50,000 each, even after adjusting for America’s typically higher general price levels. In the United States and Canada, on the other hand, these installations start at around $150,000 in even low-cost areas.”
  • “The cost problem tends to lead not to larger portions of individual project budgets allocated to elevators, but to fewer elevators overall. Small apartment buildings which would have elevators in Western Europe are built as walk-up buildings in the United States. Other projects throughout North America are built not as apartments at all, but as townhouses. Larger sites aren’t broken up into smaller segments, each with their own elevator serving a dozen or so apartments, as in Europe, but rather are combined into large, double-loaded corridor buildings, with one elevator for every 50 to 100 units (or more).”
  • “This report takes the cost discrepancy as its major research question: why is there such a vast gap in prices, what are the effects, and how might prices for elevators in the United States and Canada be brought down to earth? The experiences of other high-income countries show us the bounds of what is realistic, and offer suggestions for policies to implement in North America that have proven track records abroad.”
  • “Three major differences between North America and the rest of the world emerged in our research, which drive up the cost of elevators in North America: the size of elevator cabins, the availability of skilled elevator labor, and the technical codes and standards governing the construction of elevators and the availability of parts.”
  • “Elevator cars in the United States and Canada are much larger than those in Europe in particular, with the typical new elevator being about twice the size. This difference in size is driven by regulations to accommodate people in wheelchairs and people experiencing medical emergencies who are taken out of buildings on stretchers, although these same groups are also the ones who suffer the most when elevators go unbuilt due to the expense.”
  • “Elevator labor is also much harder to come by in the United States and Canada. Immigration laws in North America are unfriendly to noncollege-graduate workers. Domestic educational systems are oriented towards training white-collar workers, with weak technical and vocational instruction of the type that is more useful to the elevator industry. The union representing most North American elevator workers takes advantage of and exacerbates this skills shortage to bargain for inefficiencies in new installations and other elevator work, leading manufacturers to forgo some of the preassembly and prefabrication and other efficiencies common in the rest of the world.”
  • “And finally, the United States and Canada have walled themselves of from the global market for parts through a unique web of technical codes and standards for elevators, while virtually the entire rest of the world has pursued harmonization with the dominant European standards.”
  • “Different mindsets around and approaches to accessibility, emergency medical services, fire protection, electrical equipment, architecture, and the logistics of the regulatory state deeply affect the elevator industry in ways that are beyond the industry’s control. It’s a philosophy that works better than anywhere in the world at fulfilling the desires of a diverse set of stakeholders in situations where resources are abundant, but which pays for it by withholding access where resources are more limited.”
  • “The North American approach is one of extremes. American and Canadian elevators have the largest cabins, the strongest doors, the most redundant communication systems, the best paid workers, and the most diversity of codes on the one hand. And in exchange, Americans and Canadians have the highest prices, the most limited access, the least competitive market for parts, and the most restricted labor markets.”
  • “But the challenges of the industry and its regulatory environment are not unique to vertical transportation. Applying these ideas to other building systems and construction sub-sectors will be left as an exercise to the reader, but we hope the themes covered in this report can offer a lens into North America’s construction challenges more broadly – the difficulty of building multifamily housing, the limited materials market, the ever-tightening labor market, and the challenges of providing accessibility in an aging and more inclusive world.”
  • “This report focuses on comparing the elevator industry in the United States and Canada, referred to as “North America” (which, in this report, does not include Mexico or Central America), to the elevator industry in Spain, France, Germany, Italy, and Switzerland in particular, while also drawing on experiences in other countries in Europe, East Asia, and Oceania. The main Western European comparator countries were chosen for their large installed elevator stocks, high incomes, high safety and labor standards, and the language abilities of the author. This report focuses on elevators in mid-rise apartment buildings (both rentals and condos), since these buildings are home to most elevators, and are where the decision to install an elevator is most variable according to cost.”
  • “Most elevator industry revenue and even more of its profit come from expenses incurred after a building is first built, but this report focuses on new installations. This is because new installations are more homogenous and easier to compare across different settings. The issues that contribute to high costs for new elevators – around labor, availability of components, and car sizes – apply in similar ways to repairs, maintenance, inspections, and modernizations, so the new installation issues that this report prioritizes are relevant throughout the elevator’s lifecycle.”
  • “The United States and Canada have fewer elevators per capita than any other high-income country for which data could be found … At last count, the United States had over 1.03 million elevators. America is tied with Italy and Spain for second place in total installed units, behind China’s feet of over 8 million elevators. While 1.03 million installed units is in absolute terms among the highest in the world, America has fallen far behind when the number of elevators is adjusted for population. The U.S. has very few elevators on a per-capita basis for a highly developed nation, even accounting for its suburban character (the number of elevators in Canada is not known, but one rough estimate suggests it is similar to the United States on a per capita basis, and recent provincial figures back that up).”
  • “America’s vast geographic expanse and love of single-family houses explain some of the country’s lack of elevators, but not all of it. Single-family houses aside, the United States has over 32 million apartments, while Spain has fewer than 13 million apartments but about the same number of elevators. The U.S. has 40 percent fewer elevators per capita than the Netherlands, despite 30 percent of the American housing stock being in multifamily dwellings (and 19 percent in buildings with at least 10 units), compared to a total multifamily housing share of just 21 percent in the Netherlands. New York City has roughly the same population as Switzerland and even more New Yorkers live in apartment buildings than Swiss residents do, but New York only has half the number of passenger elevators.”
  • “After World War II, Europe’s elevator industry took off in a much bigger way. Southern European countries emerged as the largest markets, with rapid post-war urbanization and densification in Italy, Spain, and Greece bringing small elevators to middle-class condominium buildings … Today, Northern Europe has caught up to Southern Europe in access to elevators in new buildings, and elevators are an expected feature of virtually all new multifamily buildings – whether rentals or condos, social or private housing, and almost any size – across Western Europe. On the Spanish island of Mallorca, a recently built 54-unit social housing project includes a total of nine elevators – one for each stairwell, with four stops (at the underground parking, the ground floor, and the two upper floors) serving six units each, with only four of the apartments above the ground floor. In Switzerland, elevators are so ubiquitous in new buildings that proper commercial elevators can be found even in some luxury two-family houses.”
  • “The United States was the birthplace of the modern elevator in the 1850s, and for the first half of the device’s life, American cities likely had the most elevators … America’s elevator-fueled urban building boom would come to an end as the country turned away from its cities and towards suburban growth as the post-war decades wore on … Today, demand – and in many cases zoning – for elevatored multifamily buildings has returned. In 2016, the industry was back to installing around 40,000 elevators each year in the United States and Canada. Elevators continue to be installed in high-rise condo and rental apartment towers, but are also now found in large mid-rise apartment buildings with dozens or even hundreds of apartments. Units in these four- to six-story buildings, sometimes called “5-over-1s,” are arrayed along either side of long, straight, hotel-like “double-loaded corridors” in urban and suburban locations across the U.S.”
  • “New York City’s high-quality property and elevator data allow for a quantitative analysis of developers’ propensity to build elevators. It shows that four-story buildings (which are the tallest that can be built without an elevator according to the city’s building code, at least without some occasionally exploited loopholes) almost never have elevators. The analysis found that the likelihood of a new four-story multifamily building having an elevator in New York City does not exceed 50 percent until the building reaches a total gross floor area of 24,000 square feet.”
  • “Tall walk-ups are allowed under the model building code used in the United States, which does not require an elevator for apartment buildings of any height, deferring to federal law on the matter. Federal law, since the passage of the Fair Housing Amendments Act of 1988, only requires an elevator for new multifamily buildings if the ground floor contains no apartments (if it is reserved for parking or retail, for example), and even in that case, the elevator only has to reach the first level with apartments, not all of the floors above.”
  • “Zoning for “missing middle” housing – a term for housing typologies denser than a detached single-family house but less costly than large mid- and high-rise apartments, which have gone “missing” in modern planning – involves making room for small two- through fourstory buildings. These buildings are not tall enough to require or justify elevators in the U.S., a fact which does not go unnoticed by proponents. In one report, builders described the most viable type of missing middle multifamily housing to researchers at the Terner Center for Housing Innovation at the University of California, Berkeley as having eight to 12 units, “without elevators.””
  • “Jane Jacobs’s and Herbert Gans’s dislike of elevator buildings was tied to what Jacobs called “the related corridor problem.” By this she meant the North American habit, which grew stronger in the latter half of the 20th century, of arraying apartments of of long corridors. This stands in contrast to the more common pattern in the rest of the world of a few apartments organized around the landing of a single staircase. American and Canadian building codes don’t usually allow these so-called “point access blocks,” as they require two stairways in even small buildings. North American codes result in long corridors, as architects and developers pile as many apartments as possible onto each door to avoid expensive duplication of these two required staircases. This tendency to load a single corridor with many apartments also makes North America’s very expensive elevators more affordable on a per-unit basis.”
  • “People in the developed world are rapidly aging, and housing stock growth is slowing down as population growth is too. It’s a common saying in architecture that 80 percent of buildings that will exist by 2050 have already been built, driving home the need to retrofit existing buildings for sustainability in addition to perfecting techniques for new construction. The same logic applies to accessibility and elevators – if most of the homes that we’ll grow old with have already been built, then it is necessary to find ways to bring elevators to buildings that don’t currently have them … Critical to those efforts, though, is the affordability of the installations, as subsidy and private funds for retrofit projects are limited.”
  • “Costs in Europe can start around the low tens of thousands of euros for installations that can sit inside of a stairwell – not much more than an elevator installed in an already built shaft in a new building – and rise to over €100,000 for an elevator that has to be attached to the façade or break through existing floors. In Chinese retrofits, elevators typically attach to the façade, and cost less than $100,000.”
  • “As with all things elevators, China has the largest market for retrofits. A whopping 51,000 elevators were retrofitted into older buildings in China in 2021 – about as many elevators as were sold in total in North America … China’s retrofit installations are part of a broader goal, with high-level government backing, to retrofit up to 3 million older walk-up apartment buildings for the country’s rapidly aging population, with one source claiming that over 70 percent of “old buildings inhabited by the urban elderly do not have elevators installed.” Apartment owners pay into projects in proportion to their benefit, with those on upper floors paying more than those on lower floors. Owners near the ground who won’t benefit at all sometimes are sometimes compensated for the noise and loss of light.”
  • “In the West, Spain is one of the leaders in infill elevators. Adding elevators to occupied apartment buildings is so common that Spain has developed a consistent legal framework to make the process easier for owners, and in rarer cases even require that the work move forward against the wishes of a building’s majority … even without majority consent, a single owner who is disabled or over the age of 70 can compel the rest of the building to contribute to such a project, as long as the additional annual cost of the work – after subsidies by the government, or even residents themselves – does not exceed that of 12 months of ordinary condominium fees.”
  • “In North America, elevator retrofits to occupied walk-up apartment buildings are much rarer. Americans and Canadians are just as concerned with accessibility as Europeans, but the cost of projects tends to be prohibitive. Installations in existing buildings are concentrated in loft conversions, or residential renovations of obsolete industrial or commercial buildings.”
  • “User interviews show that some of the main concerns about elevators by North American wheelchair users who live in apartment buildings are redundancy and reliability. Multiple wheelchair users said they would not consider renting or buying an apartment that did not have access to at least two elevators, and many interviewed had experiences being trapped in (or out of) their apartment due to the lack of a working elevator. Single-elevator buildings (or segments of buildings) are common throughout the world, but fewer elevators are typically provided per apartment in North America than in Europe … In the U.S., the typical rule of thumb is that one elevator should be provided for every 50 to 100 apartments, with a second elevator usually provided if a building reaches around eight stories for redundancy and reasonable wait times, regardless of unit count.”
  • “Elevators are expensive to install, but most of the industry’s revenue – and therefore building owners’ expense – comes from things other than the initial installation, particularly in developed markets like Europe and the United States with low population growth. Profits are even more tilted towards post-installation services, and many manufacturers offer new installations at or near wholesale cost in order to win more lucrative service and maintenance contracts. As a rule of thumb, annual ongoing costs equal around 3.5 to 5 percent of the installation cost for the elevator in any given market … There are many different kinds of costs in owning an elevator, from predictable recurring expenses like electricity, inspection, monitoring, and preventative maintenance, to less predictable but still frequent outlays for services like repairs and disentrapments, to very high and infrequent costs like modernizations.”
  • “Affordable housing developers in New York City underwrite total annual elevator operating and maintenance expenses of $7,500 per device.55 A review of actual expenses for a handful of multifamily rental, condo, and co-op buildings around New York and Washington, D.C., shows similar or slightly higher elevator expenditures, with a little over $5,000 per device going to regular maintenance contracts, and the remainder split between inspections and repairs.”
  • “Labor is the major cost in installing and maintaining elevators, and basic rules of thumb suggest that it takes roughly twice as long to install an elevator in a new building in the United States as in Europe. In the U.S., the variable length portion of an installation requires around one week per floor of labor from a full-time, two-person crew, plus perhaps some extra time for fixed components that don’t vary according to height. In Western Europe, typically elevators are installed by the same crews at a rate of at least two stops per week.”
  • “Experts said that greater elevator capacities in North America make modernizations more time-consuming, and also cited increased use of preassembly and prefabrication and better-trained mechanics as possible contributing factors to quicker projects in Europe.”
  • “Around 12,000 Americans are seen in emergency rooms for elevator-related injuries each year, according to the U.S. Consumer Product Safety Commission, but that includes incidents as minor as cuts and scrapes from tripping on the threshold. The commission does not report statistics on elevator user fatalities, as there are too few to generate an estimate based on their sampling. The risk of elevators throughout their history has long been to the workers who build, maintain, and work around them, as they often have to work in unprotected shafts and in other situations that do not involve the full suite of safety precautions afforded to users.”
  • “Just as the American construction industry as a whole is less safe than the European construction industry, with workers having a higher likelihood of dying on the job, the U.S. also appears to see more elevator mechanic deaths relative to its stock of elevators.80 From 2003 through 2020, the United States saw 74 fatal on-the-job injuries among elevator or escalator workers according to the Bureau of Labor Statistics – on average, a little over four fatalities per year.81 Relative to the total installed stock of elevators in 2020, that works out to 3.9 occupational fatalities per million elevators per year … it is likely that the United States has a higher occupational fatality rate for elevator workers per device than Europe.”
  • “Elevator safety is usually considered in isolation, but in reality, elevators form just one part of the vertical circulation in buildings, and safety outcomes should be considered holistically for all ways to move around the built environment. Elevators are never the only option for moving up and down a building, and compete for use with stairs, and, to a lesser extent, escalators, trash chutes, and even cranes during the construction phase of a building’s life. On some level, elevators even compete with cars and other forms of horizontal transportation, since traveling up and down taller buildings and between lower-density homes, stores, offices, and other places are in competition with each other for people’s travel habits. An even rough quantification of the risk tradeoff is beyond the scope of this study, but a broad overview of the statistics and anecdotes conveys the importance of thinking not only about the safety of elevators themselves, but also about how the human body copes with their absence.”
  • “Elevator cabins in Europe are and historically have been some of the smallest in the world … As a general rule, the countries with the most elevators per capita have the loosest rules on size. Geographically, this means that Southern European countries with vast elevatored housing stocks tend to allow the smallest elevators, while Northern European countries with more walk-ups and single-family homes tend to require larger elevators at lower thresholds.”
  • “This means that the United States and Canada now require the largest elevator cars in the world. Whereas jurisdictions in Europe and Asia tend to require or encourage elevator cabins that can accommodate at most either a wheelchair turning radius or a stretcher, the United States and Canada typically require both in almost any situation where an elevator is provided, including in situations where there is no requirement to provide an elevator at all – a perverse disincentive that some developers respond to by simply building walk-ups.”
  • “While there are a number of medical emergencies where one would benefit from an elevator car that can accommodate a fully extended gurney, there are no measurable clinical outcomes where North America outperforms Europe or Asia. One of the most common use cases for a larger elevator is an out-of-hospital cardiac arrest, where somebody’s heart stops beating and their survival rate is improved by receiving continuous chest compressions, which are difficult to carry out in an elevator that cannot accommodate a supine patient. However, out-of-hospital cardiac arrest survival rates are very low, with one meta-analysis finding that only 22 percent of patients survived to hospital admission. North Americans, despite their much larger elevator cars, were even less likely to survive to hospital discharge (7.7 percent) than Europeans (11.7 percent). One-year survival rates were even worse for North Americans – only 4 percent survived, significantly lower than any other region studied.”
  • “International Union of Elevator Constructors officials are fond of saying that elevators are the best trade in the country, and pay statistics bear that out. The U.S. Bureau of Labor Statistics (BLS) keeps data on wages for over 50 “construction and extraction occupations,” and what they classify as “elevator and escalator installers and repairers” have the highest median wage of any of them. At $47.60 per hour (or $99,000 per year, though this may not refect the reality of overtime, and does not includes benefts), the median elevator mechanic makes more than the median “construction and building inspector” ($31 per hour) or the median “frst-line supervisor of construction trades and extraction workers” ($35.62 per hour).”
  • “The global trend in elevator regulation has been for countries outside of Europe to adopt European elevator safety norms – a trend which North America has so far resisted. There are not significant differences between the European and North American elevator safety rules (and in fact as far back as the 1980s, before a lot of global harmonization had occurred, more than three-quarters of the rules in national standards were already the same), but the mere existence of separate codes and standards, which are not interchangeable when it comes to manufacturer certification, drives up costs.1 The cost consequences of these variations in codes and standards come in two forms: costs driven by different certification processes and separate markets for parts, and costs driven by actual differences in products.”
  • “Cost drivers can be divided into cabin size, labor, and technical codes, and this report’s recommendations for reform will be divided into those same three categories. Each influences the others, and they should be thought of not as distinct silos, but as interlocking issues that can help or hinder reform in other areas.”
  • “Specific policy reforms are presented in the subsections below. Beyond these, however, there are a few shifts in attitudes that must take place among regulators if the United States and Canada are to ever approach the elevator abundance of other high-income countries. Firstly, regulators should consider safety and accessibility more holistically than they have been. Cost and access to elevators are inversely related, so anything that raises cost – even if the intent is to provide greater accessibility – will come at the expense of accessibility in buildings that become uneconomical to build … Secondly, regulators must take international best practices more seriously. The elevator industry has become highly globalized, but regulation in North America remains parochial … In the absence of strong data on the inadequacy of international practices, deference should be given to what is tried and true in societies with far more – and far more affordable – elevators than North America.”
  • “The current rules governing when elevators must be installed in multifamily buildings and how large the cabins must be should be consolidated into a single code and clarified. Elevators should be required in multifamily buildings of a certain size, regardless of whether the ground floor is accessible, while at the same time allowing for smaller cabins for smaller buildings and implementing other technical and labor reforms to bring costs down. There should also be incentives in the code to provide more redundancy.”
  • “The simplest measures to bring down cost would be to allow smaller elevator cabin sizes for smaller buildings in particular … The logic behind reducing the allowed size of cabins for small buildings is twofold. Firstly, with so few apartments, an elevator user is unlikely to have to share an elevator with anybody outside of their household on any given trip. Secondly, developers have been shown to often avoid installing any elevator at all in small buildings (see 2.1.1, “Walk-ups and elevator buildings”), and even a smaller, wheelchair-accessible elevator in these buildings would be an upgrade.”
  • “At a minimum, state and local deviation from the latest ASME A17.1/CSA B44 code should not be allowed. Going further, these North America specific technical codes and standards should be phased out entirely, and the United States and Canada should join the rest of the world in adopting the ISO 8100 family of standards and the related global harmonized web of technical rules. As an interim step, both existing North American and global harmonized codes and standards could be equal options for compliance.”
  • “To ease the chronic labor shortage within the highly skilled and licensed construction trades generally, governments should take a more active role in educating workers, through state-sponsored technical and vocational training … Currently, both immigration policy and licensure stand in the way of foreign labor in the elevator industry. In the United States, there is no legal pathway for construction workers to enter the country. Huge numbers of undocumented immigrants work in construction generally, but not in the elevator sector, where licensure and the consolidated nature of the industry make employing undocumented immigrants untenable … Beyond reforming licensure laws to accommodate foreign workers, the state-by-state system of licensure in the United States should also be reformed. There are not significant enough differences in elevator design between states to justify individual regimes in each state.”
  • “Following the European model, the field of new installations should also be opened up to foreign labor. New installations are the most physically demanding and least intellectually challenging elevator subsector, and tend to be less desirable assignments among mechanics. Unlike inspections, service, repairs, and modernizations, where work is steady regardless of economic conditions, demand for new installations rises and falls with the real estate cycle. More labor is needed during boom times, and less is needed during recessions and troughs in the business cycle. A labor force that aims to eliminate unemployment among its members, as the IUEC does, is not able to both ramp up and down new installations while at the same time providing reliable service for existing devices – the goals are simply not compatible.”
  • “In the United States, regulation of elevators and construction generally is left up to states, counties, municipalities, or even other types of authorities, justified by the national tradition of federalism. The industry, however, has become so complex that it is questionable whether subnational jurisdictions have the capacity to properly regulate the industry. At a minimum, the system of roughly 100 different North American jurisdictions reviewing and adopting different editions of the A17.1/B44 model code, with slight amendments, is duplicative, inefficient, and introduces opportunities for rent-seeking and error. There are no differences in conditions between cities and states to justify separate codes. The federal government is in a better position to do research and decide on standards than jurisdictions that represent and are funded by small numbers of people.”
  • “Constitutionally, there are many issues related to elevators that could put regulation well within the federal government’s purview. The federal government should develop reforms for the issues discussed in this report and force their adoption by states and other jurisdictions by making housing or transportation funding contingent on adopting nationally harmonized regulations, in the same way that the U.S. federal government has imposed a uniform minimum drinking age across the country.”

Shane Phillips 0:04
Hello, this is the UCLA Housing Voice podcast, and I'm your host, Shane Phillips. This is the second episode in our Incentives series. Throughout this series, we'll be exploring how policies often incentivize us to act against our stated goals and values, undermining things like housing affordability, choice, opportunity, and stability. A major focus throughout will be solutions, what we can do about these problems. The first section of this series looks at building codes and standards, and this week we're joined by Stephen Smith to talk about an underappreciated corner of that very technical and arcane world. We're going to be talking about elevators. I give a more thorough overview of this episode early in the interview with Stephen, so I won't restate everything here in this intro. The most important facts to know about elevators in the US and Canada is that they are twice as large and at least three times as expensive as elevators throughout the rest of the world's advanced economies. We talk about why elevators here are so expensive and what we can do to make them less so, but what I really want to emphasize here is how the high financial cost of elevators translates into extraordinary costs in the form of lost mobility, accessibility, and safety. When elevators cost so much, we build fewer of them. When we build fewer elevators, people who have mobility challenges can't easily get around their cities or even in and out of their own homes, and mobility challenges come for us all eventually if we're fortunate enough to live long lives. When elevators aren't available, people take stairs where the risk of injury or death due to falling is orders of magnitude higher than the risk of elevators themselves. Other times, high elevator costs mean that multi-story buildings aren't built at all, so we end up with more sprawl and therefore more driving, which is also far more dangerous than vertical transportation combined with walking, biking, transit, or even just driving shorter distances. And when elevators are included but make housing more expensive unnecessarily, we all end up poorer and that has its own negative consequences for people's health, safety, and wellbeing. There are plenty of other reasons to care about this issue, and we get into many of them in this interview. Something I keep coming back to is how rules imposed in the name of safety can have exactly the opposite of their intended effect. Mandating multiple stairwells and massive elevators is injuring and killing people in ways that don't get attributed to those policies, but make no mistake that they do carry some responsibility. One thing we wanted to talk about with Stephen, but ran out of time for, is retrofits. This is adding elevators to older buildings. Most elevators are installed in new buildings, but most housing is not new, so the ability to affordably retrofit older multi-story buildings is a huge accessibility issue. In other countries, it's relatively inexpensive to add an elevator to a 70-year-old, 5-story walk-up building, dramatically improving the quality of life of residents who may struggle to get up and down the stairs one or more times a day. In the US and Canada, retrofits are almost unheard of because of the cost. I definitely recommend checking out that section of the report if you want to learn more since we didn't get to talk about it in the interview. Last announcement here, our friends at Ivory Innovations are accepting nominations for the 2026 Ivory Prize right up until October 31st, 2025. If you're doing innovative work on housing construction and design, or finance, or policy reform, whether in the public or private sector, then you should definitely check it out. Winners in each category get a $100,000 prize, pro bono consulting assistance, and introductions to potential funders and partners. And not least, some of that sweet, sweet public recognition. You can read more about the prize and how to submit a nomination at ivoryinnovations.org-ivory-prize. The Housing Voice Podcast is a production of the UCLA Lewis Center for Regional Policy Studies, with production support from Claudia Bustamante, Brett Berndt, and Tiffany Lu. You've got about a week to get your questions in before my co-hosts and I record our mailbag listener question episode, so send those to shanephilips@ucla.edu. And with that, let's get to our conversation with Stephen Smith.

Shane Phillips 4:57
Stephen Smith is Executive Director of the Center for Building in North America, and he's here to share his research. I think it is fair to say pathbreaking research, something that most people had very little awareness of before this was published, comparing the cost of elevators in the United States and Canada to those in other high-income countries across the world. Stephen, thanks for joining us, and welcome to the Housing Voice Podcast. Thanks, great to be here. And my co-host today is Mike Manville. Hey, Mike.

Michael Manville 5:27
Hey, guys. Great to be here.

Shane Phillips 5:28
Stephen, I think you're aware we start every episode with a tour of somewhere special to our guest. I actually have seen your notes, so I know where we're going, but tell us where you're taking us.

Stephen Smith 5:36
So we are going to Bucharest, the capital of Romania. This is where my mother lives, and I lived there briefly as a teenager. If you travel to Europe and you go to cities like Paris or Vienna, they're very beautiful, but the truth is once you've seen one block, you've sort of seen the whole thing. Bucharest is a much more architecturally eclectic city, my opinion more interesting, with a mix of some indigenous styles, Western European styles, some more Eastern styles, various forms of communist era modernism, and then some 21st century styles. So we're going to trace the development a bit. We're going to start in Piazza Oniri, which is in the center of the city, and then we're going to move northward. So the historic heart of the city, known as sometimes the old town, Lipscan, this is named after German traders from Leipzig, and it's also next to this, there's the Armenian Quarter. And then scattered throughout this area, you can find a lot of sort of old 19th century single-story houses. They're known in Romanian as kase le pip vagon, or wagon style houses. This is sort of the same logic used to name like a shotgun shack in the American South, or a railroad apartment in the United States, where you have one room that bleeds into the next, no hallway between, not very conducive to modern living, but they make great restaurant conversions. Then after this, there's a ton of sort of French-style Beaux-Arts buildings. Romania took a lot from France, both linguistically and architecturally, during its sort of national awakening. And then Bucharest really explodes during the interwar period between World Wars I and II, when the country starts modernizing. So architectural modernism really takes off for this period. There's a ton of Bauhaus-style buildings, then some later some Art Deco-style buildings. A lot of the Bauhaus, especially the architects were Jewish, and they flee Romania as anti-Semitism gets worse, and then they contribute to Tel Aviv's reputation as the quote unquote white city full of Bauhaus architecture. So the city starts moving northward along a street called Kalea Victoriae, where you find a lot of early modernist buildings. Both of the old city was very much the favored quarter, where the sort of upper class like to live, and that's where you find some of the most interesting architecture. The most interesting style to me in the interwar period is called the Neo-Romanian style, sometimes called the Neo-Brancovinesque style after sort of a, I don't know, something in the earlier modern period. This was a national revival style that sort of updated the style from a few centuries ago, sort of this mix of Byzantine, Ottoman, and some Italian styles, sort of like an East from East to West thing, one of the most unique architectural things about Romania. Then after World War II, Romania is part of the Soviet influence. At first, they sort of take after this Stalinist sort of classicist architecture, I think it's called, but then later you get these, you know, what we in the West think of as communist style architecture, the sort of international style modernism. And you find a lot of these in the south of the city, in more, you know, popular working class neighborhoods like Rauhova. But on the other hand, you know, you have the party officials and other people who are sort of favored by the regime, living in the more northern neighborhoods, you know, these are the same neighborhoods that were really popular before communism, sometimes in the old houses of rich people in neighborhoods like Torobanz or Primaveri, and then sometimes in sort of newly built larger modernist style blocks along the major avenues.

Shane Phillips 8:41
So you have the party officials building the, you know, communist era housing, but they're not the ones living in it by and large.

Stephen Smith 8:50
Well, I mean, yeah, to some extent, no, and then to other extent, you know, they are living in new buildings, but sort of recreating the old capitalist market driven segregation patterns where the rich live in the north and then the poor live in the south. And then, you know, after communism, the old patterns reassert themselves. Towards the end of communism, you have a shift away from international style modernism towards postmodernism with some, you know, sort of classical flourishes on these more austere tall buildings. And again, you know, you have the party apparatchiks around Piazza Victoria in the northern part of the city. And then after communism, there's a huge housing shortage, so you get a lot of new construction. Unfortunately, Romania sort of took after this US style of urban planning, so the new stuff is pretty car oriented, much denser than what you find in the US, but not all that urbanist. There's more infill than you'd find in a place like Paris and Vienna, these sort of museum cities. But like the interwar period had growth in the northern part of the city, the post communist period has growth to the north of the city in the suburbs in these, you know, truly much more car oriented places. And they're not really taking after the interwar urbanism, it's, you know, the sort of more American style car oriented stuff. So you know, they're expanding the metro a little bit, but it's sort of hard to overcome the fact that they're building all of this stuff in the suburbs. So in Eastern Europe, I think some of the more urbanist countries, well, one of the more urbanist countries would be like Poland, for example, to a more sort of German style Western European planning. But you know, Romania still has this very car oriented nature for the new development. So hopefully, something will change. But that is my tour of Bucharest.

Shane Phillips 10:23
Romania, like a lot of Eastern European former Soviet countries, has a very high homeownership rate, right? I don't think we've talked about actually maybe any of these countries for a tour before. And I think the story is basically after the Soviet Union fell, this party owned government owned housing just was kind of given to whoever lived there or something along those lines. And am I right that Romania has like a 90 plus percent homeownership rate?

Stephen Smith 10:49
At least on Wikipedia, that's what they say. Yeah, I've seen that. Yeah, I mean, after communism, people got essentially deeded their apartments for a very nominal sum. I'm not sure if that will change over time, you know, as people move around. But yeah, I mean, homeownership is still it's still like the dominant way of living. You do see rental buildings, but you know, a lot of new buildings that are rented out are sold. This is common actually throughout the world, where the buildings are built as condos and then they're sold off to like sort of smaller investors and then they rent them out individually.

Shane Phillips 11:22
This came up in our one of our episodes talking about France and how the developers are actually not allowed to own the building after they built it, I guess they just have to sell it off to an operator of some kind or as condos where the individual or small time owners just use them as rentals.

Stephen Smith 11:39
Yeah, I'm not sure I'm not sure like what's allowed or how exactly it works in Romania. But the concept of a quote unquote purpose built rental is yeah, is actually fairly unique to the United States. Even Canada doesn't have a ton of them. The apartments are sold off as condos. And then when they're rented out, they're, you know, sold off to smaller investors.

Shane Phillips 11:57
Yeah, they have kind of the opposite problem of us where we can't find a way to build condos almost anywhere. And they can't find a way to build quote unquote purpose built rentals. Yeah, yeah, exactly. All right. So our discussion this time is about a report authored by Stephen for the Center for North American building and published last year titled simply and straightforwardly elevators. This report is an international comparison of the cost of elevator installation and to a lesser extent maintenance for mid rise multifamily buildings, mostly between four and six stories tall. Specifically, the report is comparing the costs in the US and Canada to those in other high income countries, particularly but not exclusively in Western Europe. Stephen finds that elevator installations are typically three to four times more expensive in North America. And ongoing expenses extrapolating from the report look like they can be three to six times higher, driven by a combination of exceptionally large elevator cabin sizes, standards that differ from those used across really all the rest of the world, and a variety of protectionist labor practices and other labor issues. Because it costs so much more to build multifamily housing that is served by elevators here, we end up building fewer such homes in the first place. And the ones that we do build are less affordable. And I think this is a worthy topic for a podcast episode for that reason alone. But we're including this conversation in our misaligned incentive series for two other reasons. One is the underappreciated fact that high costs which are driven in part by goals of improving accessibility for people in wheelchairs and for better emergency response are in many cases having the opposite effect. To oversimplify, and we will get into this more, our unusually costly elevator requirements mean that a lot of buildings that would be served by elevators in other wealthy countries end up being walk ups, if they are built at all. The other reason we're including this in our incentive series is it's another case of what I would call sort of siloed institutions who impose significant costs on new housing, often in the name of safety, without considering trade offs with other priorities like affordability, accessibility, or quality of life. Fire departments and utility companies are often culprits here, but they are not alone in this. So we're going to talk about what's going on, how we got here, why it matters, and what we could do to start getting some of these incentives in better alignment and solving this problem. So Stephen, you open the report with a personal story that really illustrates the value that elevators can bring to people's lives, particularly in places where multifamily housing is commonplace, and what it can mean to not have elevator access. For people who may not immediately see why this is important, could you share that story with us here?

Stephen Smith 14:53
Sure. So up until I think 2017, I was living in an older building in a co-op in a apartment that I owned, and I was tired of the hassles of an older building. So I sold it and bought a condo in a newer building. I wanted it to be new because I was the board president of the old co-op and it was just a very hairy building as they say in the state. That'll do it. Yeah, yeah. So I wanted something newer. And it quickly became obvious that I should look at new walk-up buildings. New York City has a ton of these. It allows single-stair construction up to six stories, and these are the most affordable buildings. Generally, the smaller the building, the more affordable.

Shane Phillips 15:30
And I should say we both use the term walk-up. I think that's familiar to many people in urban policy, but it's just a building without an elevator.

Michael Manville 15:38
Where you literally have to walk up.

Stephen Smith 15:40
Exactly. You have to walk up. There's no other way to get up.

Shane Phillips 15:43
And Stephen, you're talking about the costs of the homeowners association fee specifically, right?

Stephen Smith 15:49
The condo sales price and the homeowners association fees, all of the above. And so generally, the smaller the building, the lower the—New York, we call them maintenance fees. In the rest of the country, we call them HOA fees, homeowners association fees. But also the actual unit itself, generally per square foot, the costs are lower if the building is smaller. And at the time, I was fairly able-bodied, young, I guess, in my early 30s. And it seemed obvious that I should buy a walk-up building because the elevator buildings tended to be a couple hundred dollars a month more in maintenance fees. And that can really eat into your budget.

Shane Phillips 16:20
So why pay for something you don't really need?

Stephen Smith 16:23
Right, you're right. So almost as soon as I move into it, some pre-existing health conditions got a lot worse. I had a classical post-viral constellation of probably autoimmune disorders that I didn't fully recognize before, but got a lot worse. In 2021, I developed a condition called POTS, postural orthostatic tachycardia syndrome, which is a probably Greek or Latin way of saying your heart rate goes way up when you stand up and you start to get dizzy and faint and you pant, et cetera. And it sort of got worse upon exertion. And so, you know, what is climbing stairs, but exertion. So I'm in this building and then, you know, my condition was much, much worse when I first moved in. It's improved. But, you know, there were times when it was not so easy to walk up the stairs. And I didn't leave all the time that I wanted to because the health costs of leaving were not worth whatever the benefits were. And it was because it didn't have an elevator.

Shane Phillips 17:15
Yeah, I think you had said, you know, walking around the neighborhood on level ground, you know, maybe not ideal, but not so much of a barrier, it really was the stairs.

Stephen Smith 17:24
Yes. Yes. The stairs were. Yeah. And, you know, I had a very specific condition, but that's pretty common. You know, we always use the wheelchair symbol to denote disability, but the vast majority of people who have trouble with stairs are not in wheelchairs. They're old or, you know, you're born disabled, you can't walk, you've got groceries, you know, so there's all sorts of like a spectrum of ability and disability, some of which is inherent to you and some of which just happens to be, I don't know, you're trying to carry something upstairs. You know, like I said at the beginning, my mother lives in Romania and I spend a lot of time in Europe and I was just noticing, you know, the small buildings, they're built after a certain time, depending on the country. But certainly nowadays, you know, all have elevators, the ones that are, you know, roughly my height. My building is five stories and it was built in 2015 without an elevator. They all have elevators, so I was wondering why and quickly led me to realize that the costs are just wildly out of control in the United States and that's why they don't have them. And then to a lesser extent, the size is large and so it leads developers to want to not, you know, use up their floor space on an elevator.

Shane Phillips 18:26
And you were seeing much more kind of elevator availability, penetration, whatever in, you know, Romania being a much poorer country as well.

Stephen Smith 18:35
Yeah, I mean, Romania does have a lot of tall walk-ups because it was a very poor country for a while. Nowadays, the new buildings of that height, at least, you know, of sort of my class, you know, I live in what is really a luxury building. The amenities are not luxury, but you know, it's like New York City. The equivalent in Romania would have it.

Shane Phillips 18:52
We've made it a luxury through scarcity.

Shane Phillips 18:53
Yeah, I mean, it's priced for luxury. So let's leave aside Romania for a second because Romania was a pretty poor country and actually does have a lot of tall walk-ups. But Italy, for example, you know, pretty much everything built after the 1960s has an elevator almost regardless of the height. I mean, it's two, three story buildings with elevators.

Shane Phillips 19:10
You also make the point that Americans make twice as many trips on elevators every year as they do on mass transit, which is, I guess, partly an indictment of mass transit, but also says something about how much we use elevators. And you argue that we should probably think about elevators as part of our transportation network, just in the vertical direction instead of horizontal. Could you elaborate on that?

Stephen Smith 19:34
Yeah, I mean, you know, it moves you up and down a building. It allows you to live more densely, you know, in the same way that in the Netherlands, people ride around between their suburb and the city on a train and then they get on a bike and go somewhere or in a denser place like New York City, you ride around on the subway or commuter rail and then you walk to your home or workplace on either end. The elevator, you know, it's the sort of, it's not last mile, it's last couple feet, really. But it extends, you know, all of these modes sort of stack on top of each other. People rarely use only one mode to go somewhere unless it's walking. They stack all these on top of each other, they chain them. You know, elevators are very important for a dense city. In most advanced countries, not the United States, but in most advanced countries, it's just a natural part of any multifamily building regardless of the height. In the United States, generally mid-rise and above. In other countries, even low-rise buildings would be expected to have an elevator. And it's just as important as, you know, ensuring that your transit system is functioning and your costs are reasonable or, you know, in the suburbs, you have enough road capacity, whatever it may be. It's just as important for the government to ensure that there are enough elevators, they are affordably priced, the maintenance is affordable and these things, and they haven't. It's not on anybody's radar.

Michael Manville 20:47
Well, I will note that if you take a transportation planning class at UCLA's Department of Urban Planning, we do teach the elevator as part of the mass transit system. It's actually the far and away the safest form of transportation in the United States. People getting injured on elevators is almost non-existent. Escalators are weirdly dangerous, but elevators aren't.

Shane Phillips 21:07
It's all the exposed parts, man. Those things are scary.

Michael Manville 21:10
Yeah, right. The escalator is actually – very few people are killed on an escalator, but a lot of people are injured. I think part of the reason we don't think of it as the mass transit system is that we've fallen into a habit for administrative reasons of thinking about mass transit as something that receives a federal subsidy and then reports its performance to the federal government. And so when you look up facts about public transportation, you see facts about bus systems and train systems and so forth and you don't see facts about elevators, which is actually unfortunate because elevators are incredibly important. And after I got stuck in one at UCLA, I wanted to find out a bit more about generalized elevator performance and it's actually really hard to find – you can find out how often buses and trains break down and you can't find similar things about elevators. But yeah, just to reinforce Stephen's point, absolutely, a huge part of the transportation system.

Shane Phillips 22:00
And I think it goes to show the work that went into putting this report together because you could just tell going through how challenging getting some of this data was because it is mostly just privately held and getting this across different countries is particularly challenging. Before we get deeper into the reasons elevators are so expensive here in North America, I do want to make sure we give listeners a sense for just how much we lag in terms of elevator availability. A few comparisons in the report did a good job of illustrating this for me. One is that the US has about one million elevators total, which is roughly the same number as Spain, a country with one seventh our population. For every 1000 people, the US has three elevators, France has nine. And in this report anyway, Greece leads the pack with 41 that's per 1000 people. The US and Canada combined install about 40,000 elevators per year, at least as of 2016. And China, as of 2020 installed more than 700,000 per year, likely putting its total stock of elevators at over 10 million today. The US and Canada are both famous for having a bunch of single family homes. But even when you adjust for the number of multifamily homes, we still typically have around a third to half the concentration of elevators. And we're much wealthier than a lot of the countries were being compared to in the report. So this is not a matter of not being able to afford the same things these other places have. Stephen, you include a few examples of the kinds of projects that include elevators in other countries, which they're able to do in large part because elevators in these other places are smaller and so much more affordable. The social housing project in Mallorca is one that came to mind. Could you tell us about that and any other data or examples that help illustrate what we're missing out on here?

Stephen Smith 23:53
Sure. So yeah, it's just a social housing project on one of the islands in Spain. And it's designed as what I'll call a chained point access block. So it might be helpful to explain where you'd find this in America. In America, there's a typology called the garden apartment complex. You find it in a lot of suburbs, especially in the Southeast, but really everywhere. And it's where you have a number of different apartment buildings. They're sort of chained together in a big complex. Each sort of block has one stair and then it's two or three stories and there's between two and four apartments on each floor. It's really like the low end apartment complex. And so in Spain, this is just their version of it. It's a connected bunch of apartments, each with one stair. And as I recall, the project is three stories total, maybe with a garage. And each of these blocks has, I guess, six apartments in total, four above the ground floor and then two on the ground floor. And each of these stairways has an elevator, like a little Spanish elevator, not as little as the ones that you'll see in an old building in Paris or something where it's been retrofit in, but small compared to American ones. And it's doable because in Spain, one of these elevators will cost in the low tens of thousands of euros. In the United States, an elevator like that would go for well over $100,000. So they're able to just totally design their buildings differently. Part of it is that they allow taller single stair buildings, although in this case we allow three story single stair buildings too. So that's not the issue exactly, but a large part of it is the elevators. So they're very, very affordable in Europe. Not just Europe, but the whole rest of the world compared to the United States. So it allows you to design the building differently.

Shane Phillips 25:33
That building that you're talking about is effectively either four units per elevator above ground or six units total per elevator. I think in the US, a much more common ratio is over 50 to one, right?

Stephen Smith 25:47
Yes. Yeah, yeah. Something like 50 to 100 to one. But more importantly, that building just wouldn't have an elevator in the United States. It would be built as a bunch of walk-ups.

Shane Phillips 25:54
So if you had a disability that made stairs impossible or really challenging, at least two thirds of those units are just out of the question for you.

Michael Manville 26:03
Yeah, you couldn't live there.

Stephen Smith 26:04
Yes. And everyone would be very proud of themselves for having the ground floor unit to be accessible, and that would be amazing. And the rest would just be, you know, whatever. What do you expect? You want an elevator for a three story building? That's ridiculous. But of course, in other high income countries, it's common.

Shane Phillips 26:18
Could you just quickly run through the other countries you chose for the comparison in this report and why you chose them? I know that high incomes and high safety and labor standards were some of the criteria, and it might be helpful to explain why that's important as well.

Stephen Smith 26:32
I think you're referring to a chart, just the elevator ratios. Frankly, it was just the availability of data. It's hard to find it for a lot of countries. So you know, it's just where I found the data. They weren't cherry picked. Those were just the countries I found the data. And I think most of them were in Western Europe, although I think Argentina is also there, Singapore is also there because I found the data and because Argentina is not so high income anymore. But historically, you know, it's one of the wealthiest countries in Latin America, and it sort of takes after Europe in a lot of their construction and built form. So it was really just where I found the data. And then of course, Greece came out on top, which was a little surprising, but not if you think about the fact that Southern Europe had like huge building booms in the post-war period. And there was a lot of small lot multifamily buildings with, you know, only a couple of units sharing an elevator. That's why Greece is there. The Southern European countries really dominate and then, you know, everyone else sort of behind them, but way ahead of the United States.

Shane Phillips 27:26
Yeah, you've got a number of Northern and Southern European countries. You've got South Korea, Japan, Argentina, and yeah, Singapore. And the rest are just, the rest of them are in Europe. But you do reference other things from, you know, some data from China, just you didn't necessarily have the data for all the same comparisons. But you're really drawing on lessons from many different places for sure.

Stephen Smith 27:49
In the report, the countries I focus on are the countries I'd like access to the language. It's very difficult to do code construction research in other countries because, you know, like in the medical field, if you have any finding worth publishing, it's published in English. In construction, it's still a very like sort of local phenomenon. People don't get into it because they have like a love of foreign languages and sharing knowledge. So you usually have to like do the research in the language. So I focused on Western Europe because those were languages I could speak.

Shane Phillips 28:19
All right. So let's move on to what's behind all this. Obviously, we've talked about it a little bit already, but fundamentally, this is a cost problem. Elevators are just far more expensive in North America, both to install and also to maintain and operate. So paint that picture for us. Just sticking with installations, I think for now, how much does it cost to install a new elevator in the US compared to other high income countries like, say, France or Switzerland?

Stephen Smith 28:45
So for a mid-rise building, I'm just going to pick mid-rises because they're easier to compare. I'm sure everything is true for high rises too, proportionally. For a mid-rise building in Europe, the cost would be the low tens of thousands of euros, dollars, francs, pounds, whatever. All the currencies are kind of similar nowadays. So 20, 30, I don't know, maybe 40. I don't think I saw anyone at 40,000, but, you know, so that would be between three and six stops on the elevator. So you do an elevator by number of stops, not number of stories, because sometimes they can go below ground. In the United States and Canada, that is between 150 and 200,000 USD. Since I wrote the report, there's been a lot of inflation, especially in construction. But if you normalize for purchasing power parity, which is the most generous way to do it for the United States, let's say, you still end up at three to four times the cost. A country that I thought was particularly interesting was Switzerland because you can say, oh, well, they're expensive here because their labor is expensive. And you know, the United States is one of the wealthiest countries in the world, even though technically we're a high income country and technically Italy is a high income country. We're sort of in another realm from them. But Switzerland is in our realm, in fact, above it when it comes to incomes. So it was interesting to note that, you know, even in Switzerland, the elevators were the same price as the rest of Europe. They were really no more expensive.

Shane Phillips 29:59
And I don't think we're going to spend a lot of time on maintenance and repair and overhauls and that kind of thing that are also an important part of this. But worth noting that the total cost and even, I think, like the net present value of future maintenance costs is greater than the installation and tends to be proportional. So if the installations in North America are three times as expensive, the maintenance and repairs and so forth are probably at least three times as expensive, it looks like.

Stephen Smith 30:27
Yeah, yeah. Service maintenance and then what are called modernizations, which is every generation you go up to essentially rebuild the elevator. Yeah, about 70% of spending in the elevator industry is not in installations. It's in service maintenance modernization. So everything I'm saying is true of those two. It's just a little harder to compare them because they're more heterogeneous, but it's all wildly expensive in the United States.

Michael Manville 30:47
And I mean, I understand why we won't spend a lot of time on maintenance and service, but like, it's really important. Like it doesn't do you any good to have a building with an elevator that doesn't work. And I mean, I know the towers where I live periodically, an elevator goes down and you know, it's like you have a 13 story building with no elevator, right? And then people are going up and down the stairs. And again, having been briefly trapped in a UCLA elevator, it's an unpleasant experience and you don't really want to get into an elevator for a while after that because they're just kind of like, oh yeah, yeah, we're really behind on maintaining the elevators. They might just like stop. You know, it's just like not having an elevator doesn't do you any good for accessibility. Having an elevator that you can't rely on is also no good.

Stephen Smith 31:36
Yeah, the timeline, it takes about twice as long to install an elevator in a new building in the US as compared to Western Europe. And you know, that has a cost and it suggests something about labor, which we can get into later, but you know, it doesn't really affect the user directly, but for the modernization, which needs to occur every couple of decades, you need to take the elevator completely out of service. And I have some timelines in the report about how long comparable things are taking in various countries and it's at least twice as long. So, you know, that's the time at which the elevator is out. And if it's a small building and we need a lot more small buildings and most buildings are small, then the building is a total walk-up. It's not just that there's a long line for the elevator, it's that there's no elevator at your disposition whatsoever.

Michael Manville 32:16
That's right.

Shane Phillips 32:16
So you identify three main reasons for this huge cost disparity. As we talked about, the size of elevator cabins, the availability of skilled labor and technical codes and standards that govern construction and the availability of parts. As you put it, quote, the North American approach is one of extremes. American and Canadian elevators have the largest cabins, the strongest doors, the most redundant communication systems, the best paid workers and the most diversity of codes on the one hand. And in exchange, Americans and Canadians have the highest prices, the most limited access, the least competitive market for parts and the most restricted labor markets, unquote. That sounds like a pretty bad bargain. So we will start with cabin size because it feels like the most tangible of these three. You're buying something very different when you purchase an elevator in the U.S. or Canada compared to most other parts of the world. How are they different here and what's the rationale behind those differences?

Stephen Smith 33:18
A new elevator in a mid-rise building in the U.S. and Canada is about twice the size of one in the rest of the world. And it's driven by two things. One is a I don't want to call it exactly a turning radius for a wheelchair because it's not a proper turning radius, but it's a little more maneuvering room to not just roll back and forth, but turn a little bit. And then the second thing is pretty much every new building that has an elevator is expected to have one that fits a stretcher or a medical stretcher gurney, according to the codes. So in Europe and Asia, the general expectation is that the elevator will fit somebody in a wheelchair and will fit somebody standing behind them, you know, in case the person needs assistance, can't travel alone. And that's it. In the U.S. and Canada, there is the expectation that the person in the wheelchair will be able to turn around in the cabin more or less, at least if the cabin is empty and if they have a fairly easy to maneuver chair. And then secondarily, that at least one car in the building, one elevator car in the building will be able to accommodate a full in the United States, a seven foot long stretcher. And both of those things are nice to have, but are less critical than having an elevator at all, having one that accommodates a wheelchair and someone standing behind it. So we have higher standards for the size and it leads to cars that are about twice the size.

Shane Phillips 34:44
And the wheelchair one, obviously, as you say, it is a convenience. It doesn't seem like there's much of a safety benefit necessarily to being able to maneuver a little more, maybe a little bit. I don't want to be dismissive of that. But I think when you hear the stretcher part of this, that seems maybe more important. You know, someone's having a medical emergency. The ambulance shows up, people bring a stretcher and like, you can't bring someone down. What I was not aware of until, I don't know, the last year or so is these elevators are designed for a stretcher to lie flat, but these stretchers actually tilt up. And so they can fit them without all of that space. It's just the requirement now is that they'd be big enough that someone can actually lie flat, right?

Stephen Smith 35:31
Yeah, I mean, OK, so to talk about the safety issues involved in a wheelchair journey, I mean, there are, you know, you could roll over someone's foot if you're like if you're in a wheelchair in Europe, you either have to back into the cab or you have to back out of the cab. Frankly, you probably have to do that in the United States, too, if the elevator is pretty full. But if it's empty and you're in a more maneuverable chair, at least you can probably enter face forward and leave face forward. So I'm not in a wheelchair, so it's not really me to judge what's minor or major, but some inconvenience at the very least in a smaller cabin. As for the stretcher thing, yeah, I mean, before the early 2000s, elevators were a little smaller in the United States. They were designed to accommodate a flat stretcher, but a stretcher that was six feet, four inches long. And then a firefighter in Glendale, Arizona, knows that they should actually be seven feet long. So now they're seven feet long. So over time, it just kind of got longer and longer and longer. You know, the stretcher, the cab got bigger. The various standards just kind of gradually got bigger and bigger. But a huge number of elevators in the United States do not accommodate the seven foot long lie flat stretcher because they were built before. And, you know, medical responders adjust in various ways depending on the need. In the vast majority of cases, you don't need someone in a stretcher at all. You can put them in a wheelchair. In cases where they do need to be in a stretcher, you can prop them up. There are rare cases, maybe a spinal injury with a very tall person, where you'd want a seven foot stretcher. But, you know, you've got to weigh this against the alternatives. Most dwelling units in the United States or single family houses don't have an elevator at all to move people in and out. So there are ways, depending on the issue, depending on the height, depending on various factors, there are ways to get around it. But the way that the firefighters think about it, the firefighters often respond to medical emergencies, is we want this, we're going to get it, and that they do get it in some situations and then they don't get it in many others. Most others, really, they don't get it. Most dwelling units in the United States do not have an elevator that accommodates a fully flat stretcher because they don't have an elevator at all because they are single family houses or walk-up apartment buildings or older apartment buildings.

Michael Manville 37:40
And I think this is, you know, of a pattern for people who have just observed the broader transportation system. If you ask the typical fire department how wide they think a street should be, it should be wide enough for them to do a three point turn with their engine. And that is legitimately easier for the fire department. But there are competing uses for that space and there's costs associated with having a street that wide. And it just goes to show you don't want to dismiss the input of people who are responsible for responding to emergencies, but you also don't want to just prioritize it over everything. And I think the point you've made about the single family homes is extremely valuable. It's just a lot of Americans just live in multi-story single family homes. And if someone has a medical emergency on the second floor, they're not coming down the stairs very easily on a stretcher or that stretcher is being carried by firefighters. And again, the firefighters would certainly love it if there was a big elevator in that house, but there isn't. And what that tells you is that standard operating procedure for a lot of emergency responders is they know how to move someone if there isn't a big elevator that can hold a seven-foot stretcher lying flat. You know, it's just these trade-offs just don't go fully acknowledged, I think.

Stephen Smith 38:50
No, they don't go acknowledged almost at all. The code world, the fire worlds are not great at these trade-offs and weighing not just costs and benefits, because like you said, there are competing uses for this. You know, maybe accessibility and, you know, first responders are not top in our mind and we're more concerned about affordability. But leaving that aside, even if you are primarily concerned about accessibility, even if you are primarily concerned about medical responders having the best way in and out of the building, I don't think they're properly thinking about the consequences. The codes are so complex that I've noticed that many of them do not even understand that elevators are not required in, say, four-story buildings. There's a code section that's very confusing, but if you read it one way, it could look like they're required. But in fact, they're not. They're just not. I mean, my building is proof. I live in a five-story building without an elevator. But, you know, you can see them in other cities as well. In Seattle, you see four or five, and I've seen a couple of six-story buildings without elevators. So they're not required. So, you know, if you make it too difficult to provide it, it won't be provided. In some cases, it will be provided anyway. So you have to weigh it. You know, how many walk-ups is it worth to guarantee that if there is an elevator and if it is a new building, then it will accommodate the seven-foot stretcher? And there's really no thought at all, in my experience, as to how we're going to weigh these things.

Michael Manville 40:11
And, you know, to take that further, I mean, just like let's say that there will be a four-story apartment and you will put in the elevator, that bigger cabin, in some instances, just there's an opportunity cost to that bigger, you know, how much space you have for units. And that probably not in every instance, but in some instances, it might result in, yeah, we're going to put that building up, but the units themselves are a little smaller or there's one less unit. We all know there's only a certain amount of space that a local government allows you to turn into a building on a given parcel. And the more of that that's elevator, the less of it on some level has to be other things.

Shane Phillips 40:46
I did want to bring that up, just thinking about affordability, you know, obviously the direct cost of installation and maintenance is the most obvious impact here on affordability, but you have these indirect costs as well in terms of opportunity cost, you know, space that could have been a bigger unit that would have rented for a little more is now just non-revenue generating elevator space, among other things. So is there anything else like that, Stephen, going on here on the cost side?

Stephen Smith 41:11
Oh, I mean, like you said, you know, there's the foregone cost of the space, depending on how a zoning code treats floor area. Often the elevator and rentable or saleable space is directly traded off. So there's that for a small lot. There's also just sort of geometrical concerns. Like my building is on a very small lot. This lot is about 2,000 square feet. The footprint of the building is about 1,200 square feet on the residential floors. So, you know, there's like just some basic geometry things in play. If there were a stretcher-sized elevator, then instead of being two one-bedrooms on each floor, it'd be one bedroom and one studio, maybe even two studios. Maybe you'd have to cut out all the bedrooms. I don't know. So there's that. There's the size of the elevator shaft, you know, the construction of the shaft.

Shane Phillips 41:55
Which you're not including in these estimates, right? That's sort of a building cost officially. So it's not part of the elevator cost.

Stephen Smith 42:03
Yes. It's very difficult in construction to find costs of various little things, especially if it's not a standalone system. The elevator is a standalone system. So I was able to get quotes, you know, like I said in Europe, I don't know, $30,000, $40,000 versus the United States, $150,000 to $200,000. But then there's all of these other little things. There's the foreground space. There's the shaft. There's some other things that are not technically the elevator, like elevator hoist weight protection opening and the technical standard. There's a lot of other little things. So my costs are not exhaustive.

Shane Phillips 42:35
Yeah, just to go back really quickly before we move forward, I do want to highlight the point that both of you were kind of hinting at, which is that even if every project from pier to eternity builds a 10 foot wide elevator, you're just going to have a lot of older buildings that are either not going to have elevators or have smaller elevators. And the same goes for widening streets or requiring wide streets for future access by fire trucks. No matter what the future looks like, these emergency responders are still going to have to be prepared for circumstances where they don't have access to those kind of gold plated facilities. And that's not necessarily a reason to not improve things going forward. But I do think it just goes to show you're never going to fully solve this problem. And so I think sometimes the cost benefit ratio is treated as though once we institute this change, the problem is solved. But really, you're just you're having to respond to very different circumstances because most of the housing stock is still going to be older buildings. Most of the roads are still going to be older roads. And so it doesn't change as much as I think we imagine it does.

Stephen Smith 43:47
Yeah, there's a lot of catastrophizing about the smaller cabins. And I am now very familiar with the cabin sizes. So if I see that the cabin is, you know, twenty five hundred pounds, it probably won't fit the fully extended structure, whereas if it's thirty five hundred pounds, it will. But what I've noticed is the people who respond to medical emergencies don't know that, which suggests to me that it's not actually that important to them. Like if it were so important, they would have memorized, OK, thirty five hundred pounds and good twenty five hundred pounds panic, you know, but they don't actually respond that way. They notice a lot when there is an elevator and when there's not an elevator. They do not know the details of how to tell that it can fit the structure, for example.

Michael Manville 44:24
I think that, you know, we encounter this in all manner of regulation, which is just that the idea of safety has a very valorized and almost singular abstract role in our minds. You know, where there's like nothing is worth less safety is very something that's very easy to say. And it sounds good rhetorically. Almost none of us live our lives that way. You know, someone will tell you like almost nothing is worth less safety than get in their car and then drive off while they're composing a text or something. I think that's probably true in this case as well. And I think the point Stephen made a few minutes ago is a really good one. And it's not something that most people think about, which is just like, well, what are the number of conditions where it would really be just absolutely essential to transport someone lying flat? Right. And I think the example you gave Stephen was like, well, someone might have some sort of spinal injury, in which case really being immobilized and laid out might be truly the ideal thing to have going on. And those are terrible injuries. But like, it's just not most things that emergency responders are called out for. And I think that's the kind of thing that it's true as well with, you know, you talk about wide streets. It's like, well, we want the ambulance to be able to get to where it's going faster. And sure, all else equal, we do. But like, if someone broke a leg, it's okay if it takes a few extra minutes, as opposed to, you know, they're having some true emergency. And again, whenever someone looks at this, it's like, that's not most emergencies, it's not most calls. So I think there's a situation where, again, if you just sort of ask somebody like, well, do we want the bigger, safer elevator? They say, yes, of course we do. And what they don't do is actually think about the specific situations where that would really be a sort of decisive, advantageous thing to have, and then think about how frequently those situations actually occur. And I think it's a natural way to think. But if you think that way and put it into the code, you end up with these giant elevators that Stephen has documented.

Shane Phillips 46:16
I do feel like the fire truck analogy here is useful because it also helps illustrate what we actually prioritize in practice, because you might think the fire department officials would really support getting rid of street parking and instead saving that space for emergency access to get to the locations faster. But that's never really even considered because we actually put a lot of value on street parking next to your house, next to your business, whatever. And for whatever reason, the affordability of new housing, the accessibility of new housing just does not get that same kind of consideration. I think just it's just not on people's minds, you know, day to day in the same way. But I do think that is really illustrative for sure. We've kind of jumped ahead to safety, but I do want to dwell on this a little bit more because I think it's important. You know, we talked about elevators as part of the transportation network, and you brought safety into this in a way that I had not thought about, Stephen. And I'm guessing this probably is in one of these classes that you talked about, Mike. But elevators are a substitute for other vertical transportation, mostly in the form of stairs and a substitute for horizontal transportation to the extent that we build more low density sprawl when elevators are expensive and tall buildings are less livable and are more expensive themselves. What matters here is that elevators are dramatically safer than both stairs and cars, probably by orders of magnitude, with stairs and cars being the cause of death of about 50000 Americans every year, most of that being cars. It's entirely possible that these big cabin sizes do save a few lives here and there every year. And even though I don't think there's really any data to conclusively support that, but there's almost no question that more people die falling downstairs and crashing their cars each year because we've turned elevators into a luxury. Could you say a little bit more about that? It seems really important and maybe the best response to people who take this more maximalist approach to elevators in the name of safety.

Stephen Smith 48:24
Yes, I spent a lot of time trying to figure out, well, are European elevators as safe as American elevators? The conclusion I came to was the data is not really there, but what is there suggests that they are probably actually safer. You know, how many times does a medical responder encounter someone who's in cardiac arrest and who could really use a lie flat stretcher to perform resuscitation? Like as they're moving them to the vehicle or? Yeah, as they're moving and like how likely are those people to live in any case? And the answer is very low. But anyway, all of that is really dwarfed by the dangers of living farther apart or using stairs. I don't have the numbers in front of me, but there are just so many more people who die in car accidents moving horizontally or, you know, who trip and fall using stairs. There's just no question about how dangerous it is to not have elevators, to have to live more sprawled out lifestyles. And the way that codes and standards are written, just don't take that into account at all in any way whatsoever. And, you know, we don't really have good tools to know, you know, okay, if the elevator is three times as expensive, what will settlement patterns be? How much farther apart will people live? How many extra vehicle miles traveled will there be? How many extra deaths will there be? I don't know how to answer that question, but if you just think about it for a second, you come to the conclusion that it must dwarf any safety benefits, which I don't even think there are, from adopting the U.S. approach. And it just it's not considered whatsoever.

Michael Manville 49:54
Yeah. And I think they're really worth emphasizing, you know, the point you just made a moment ago, which is that the safety benefit of the bigger cab does not have anything to do with the operation of the elevator. Like the elevator is just kind of a very safe way to move around. It has to do with this really hard to quantify scenario where it would be very beneficial, decisively beneficial to have someone lying flat on a stretcher while they're being transported versus a counterfactual where they had to do something else. And it's just you can say that about certain types of automobiles. I mean, it's just, you know, it's a big world and things happen, but it's such a small share of overall incidents that the benefit there is close to zero. It'd be one thing if, you know, for some reason, we thought having bigger elevators made the operation of the elevator safer, but there's no evidence for that, right? I mean, it's just like elevators go up and down. It's a pretty proven technology. And then when you add in the number of people who just don't move around as much as they might otherwise, right, because they can no longer go upstairs, right, if they had an elevator, even, you know, just the fear of injury prevents them from taking full access of the buildings they're in. I think the costs are enormous.

Stephen Smith 51:08
Yeah, New York City is full of tenements, five, six story tenements, especially in Chinatown with a lot of elderly people who are trapped inside their apartment. My mother's stepmother in Bucharest lived in a four story walk-up building and didn't leave her apartment except for medical appointments for the last two years of her life. Would she have lived longer if she could go outside? I don't know, maybe. Would she have had a more fulfilling life? Yes, definitely.

Michael Manville 51:28
I mean, absolutely. Right. I mean, that's not going to show up in an injury statistic, but that's no way to live, right?

Stephen Smith 51:34
Yeah, I mean, trapped in your building. It's shockingly common. I looked at fire deaths in New York City and, you know, any time anyone was tagged as disabled and a shocking number of those buildings were not accessible, the people could not get out by themselves, unaided. I don't think that's why they died in the fires, but it did go to show that there are a lot of people who are trapped in their buildings because of not having an elevator.

Shane Phillips 51:56
Yeah, the other two big cost drivers that you identified were the limited availability of elevator labor and a set of standards and regulations that put North America on an island when it comes to parts availability and therefore price. We don't have as much time to dig into these two problems. We're definitely running out of time, but they do strike me as maybe at least as important as cabin sizes in terms of their overall impact on price. Briefly, if you can tell us what's going on here. It definitely is important.

Stephen Smith 52:27
The technical standard one is a little hard to understand, but once you do, you can see it everywhere in construction. So, you know, when you build an elevator, you have to certify that they are extremely safe and you can just certify that it's safe by certifying that it meets all of the rules in what we call the elevator safety standard in the United States. Technically, it's the ASME A17.1 standard, but we'll call it the technical standard. And this is not the cabin size. This is more detailed things. Is the door strong enough to handle a fire and a water hose being put on it? There's a tow guard in case the elevator doesn't stop exactly level with the floor, which stops you from falling into the shaft. The communication device, in case you get trapped in it, does it work in a certain way? And there's a lot of very technical, detailed rules about this. One of the things that the European Union excels at is writing these sorts of regulations and standards, and starting in, I don't know, the 60s, 70s, something like that, in Europe, they decide we're actually just gonna have one standard for the continent. And there were two reasons for that. One was, you know, physics is the same everywhere. Why should the rules be different? Something is safe in Germany, should be safe in Austria, too. But the second one, which is really important for cost, is that having the same rules creates a bigger market. It means that, rightly so, you need to certify that an elevator meets the standard, that, you know, the details, all of these things, the door strength and the communication device and this and that, are all, you know, as they should be. It costs a lot of money, even a small part costs a lot of money to certify to the standard. And that's good. And it should be like that. But if you have different standards, then you have to duplicate this testing for every single country that you're trying to sell it to. And so the European Union, one of the non-negotiables to joining the European Union is that you must accept the harmonized European standard so that you can sell the exact same part in Portugal and Greece and Romania and in Sweden. The almost entire world, except for the US and Canada and Japan, which we'll leave to the side, has decided, you know, the European standard is actually a very good standard. We're just going to accept the European standard. So many countries accepted it, that they actually rewrote it as what's called the ISO standard, which the International Standards Organization, essentially. And so you can sell the same elevator, essentially, in almost every country in the world, but not the United States or Canada. In the United States and Canada, you have to meet a different standard. And what this does, you know, the exact technical details of it are not that different. They're just different enough that just because you tested the European standard doesn't mean someone will blindly accept that it meets the American standard. You might have to change something a little bit. More importantly, though, you might not have to change anything at all. You just have to get it retested because, you know, for example, the door strength thing, I suspect the doors are actually the same strength. They're actually selling the same doors in the US and Canada and excuse me, the US and Europe. But technically, the testing procedure in Europe is different from the testing procedure in the United States. So you need to pay again to sell it in the North American market. The North American market is less than one tenth the size of the global market. So when you produce a part, you're first going to get it certified to the global standard. And then if you think you can sell enough of them, maybe you'll get it tested to the US standard. Probably not, though. You'll probably just sell to the global market and leave the Americans on their own with their little shrunken market. So it really inhibits the ability to sell parts in the United States. It inhibits the ability to sell entire kits of elevators in the United States. You know, there's these companies that sell what are called non-proprietary elevators. They're sort of generic elevators, generally a little lower cost than the four big companies, the big four, Otis, Kone, Schendler, and ThyssenKrupp. And they exert a lot of competitive pressure in Europe and it's much harder to buy the parts for these in the United States.

Shane Phillips 56:02
If you're buying a kit, it seems like if there's like one part that doesn't meet the US standard, but all the rest do, you just like can't buy that kit. It can just keep you out of the market entirely.

Stephen Smith 56:11
Yeah, it'll just keep you out of the market entirely. The whole kit is gone as an option. So there are these mid-sized manufacturers. The big one in Europe is called Orona, based in the Basque Country in Spain. And if you look at their map of where they sell parts, it's almost everywhere in the world except for the United States and Canada. Similarly, if you look at companies that do sell parts in the United States and in Europe and you look at their catalogs, their catalogs are much thinner. The catalog of parts is just much thinner in the United States. So the different technical standard creates a barrier to entering the market and it leads to a less competitive market. And we can argue about the size of an elevator, but at least it's fairly easy to understand. The details of these technical standards are so minute, nobody will ever, ever in a million years collect the data necessary to tell you that the exact European door testing procedure, which involves a little more fire and no water, is different, is better or worse than the American procedure, which involves a little less time in the flame and then a hose being shot at it. So it's not possible to adjudicate these disputes. And the rest of the world has decided, you know what, the Europeans, this is where the elevator industry is based. Of the four largest elevator companies in the world, three of them are based in Europe. Europe has so many more elevators than anywhere else per capita. Up until China had this big building boom, they just had the most elevators period. Seems to work well in Europe. Europe is known for having a high standard of safety and things. We're just going to follow the European rules. In the United States, we don't. You know, well, we don't understand it. We have questions that, of course, cannot be answered and we don't pose about our own code. But if someone else is trying to introduce a code, we will definitely pose it about theirs. And it just, it cleaves off the market and, you know, it creates a lot of business opportunities in the US, certainly.

Shane Phillips 57:59
This is something you see with train rolling stock as well, right?

Michael Manville 58:04
Yep.

Stephen Smith 58:04
You see it, yes. In rolling stock, the Federal Railroad Administration used to require, you know, a specific buff strength standard. Now there's an alternative compliance method. Supposedly you can do it the European way. I'm not sure how complete that is, but you see it's just completely endemic in standards for construction. So in windows, for example, we have different, certainly different testing procedures for the energy efficiency of our windows. And what it means is that you can't just import a European window and trust their certification because, you know, it's maybe a little off by five or 10%. And, you know, so as a result, high performance windows in the United States are like two to three times as expensive as in Europe. So we just, we have much more difficult testing procedure. You can't import the European ones. You find it in heat pumps. You find it just in every product you can imagine. Our standards are just different enough that it creates a barrier to moving between the markets. And certainly the organizations that write these standards, you know, they're nonprofit organizations, but they do business models and one of their business models that you need to, you know, certify to their standards. So it's great for them and it's great for the incumbent manufacturers, the elevator parts, or, you know, the windows, let's say it's great for them because it's hard to enter the market. It's hard to compete with them. And these standards are so technical and minute that if you just keep asking questions and you just, you know, well, there's something I don't understand about the European standard. You know, we don't have information about this. You can just keep throwing up barriers to adopting international standards if you just, just keep being difficult about it. And that's what ends up happening. So, you know, we have a building code in the United States. The model organization that writes it is called the International Code Council. The code is called the International Building Code, but there's nothing really international about it at all. You look at the standards that they reference and it's all American standards. There's very few European standards. There's very few global standards that we reference. Everything from the gypsum board to the heat pump, to the elevator, to the window needs to be certified to this special North American standard. So it creates barriers to entry.

Michael Manville 1:00:05
Yeah. And there's the practice of sort of raising these questions about very small details and not understanding them is a classic case of sort of intentionally losing the forest for the trees. Because the real question is like, well, if I go to Europe, do I see like windows shattering? Do I see elevators plunging into their shafts?

Stephen Smith 1:00:23
Low performance windows. Do you see in Europe, do you think the windows are lower performance than the United States?

Michael Manville 1:00:29
Yeah, exactly. Right. No, you walk around.

Stephen Smith 1:00:30
They're much better.

Michael Manville 1:00:31
Everything seems to be working pretty well.

Stephen Smith 1:00:35
American windows are notorious for being horrible sound attenuation, horrible energy efficiency. But oh, the European standard, it's a little different.

Michael Manville 1:00:43
Yeah. It'd be one thing if we wanted to import the standards of a place and every time you went there, you were just like, geez, like this place seems to be ruinous. Things are falling apart. But it's just the opposite of the case. It's like people walk through Europe and they're like, building quality seems to be beautiful. And so it's, of course you can say, I don't understand, you know, sub clause 27 of rule 726, but sometimes the right answer to that is just like, well, step away from that and like, go just fly to Belgium and see if the windows seem okay. See if you can find data about window safety because like, it's fine. And if it's fine, maybe we should just have some reciprocity, right? That if the Europeans say it's safe, we can say it's safe too.

Shane Phillips 1:01:26
And even like, you know, if you have questions, lots of people in Europe speak English, you know, you can ask.

Stephen Smith 1:01:33
Yeah, you can get the answers if you seek them. But, you know, these codes and standards are written by, in the United States, all volunteer organizations.

Michael Manville 1:01:42
Right, that's true, that's true planning too.

Stephen Smith 1:01:43
They don't have the time to look it up. In other countries, the codes tend to be written by the government, so they are paid to look up the answers. But in the United States, it's a lot of volunteers, some of them from the industry itself. And so they don't really have the resources to get their questions answered. So it's just easiest to default to what they know, which is the American standards. Now, of course, they're not asking the same questions of the American standards. You know, every three years, there's a new elevator standard and the body that writes the building code doesn't nitpick at it and say, oh, do we really trust it? I think, you know, we might want to stick to the old one because we don't understand the new one. No, they just accept it because it's a trusted organization in the United States. So, you know, if you if you differentially apply trust and you differentially ask certain questions a little deeper of other codes and standards than your own, you know, you'll always come to the conclusion that it's just safer to stick with what we've got. Stick with, you know, the American organizations.

Shane Phillips 1:02:35
And how about labor before we get into recommendations?

Stephen Smith 1:02:38
Oh, this one is this one is very difficult.

Shane Phillips 1:02:41
So this one seems like the toughest to solve in some ways. Yeah, much longer term project.

Stephen Smith 1:02:47
Most elevator firms in the United States are fully unionized. They belong to an organization called the International Union of Elevator Constructors, rather their workers do, which is, again, not that international, it's the U.S. and Canada. And they have rules forbidding preassembly and prefabrication of parts in particular. So the most glaring example that I found, well, the most glaring example is actually an escalators. You have to essentially take apart an escalator and then put it back together on the job site in the United States because the union contract does not allow you to put it together in a factory and then just crane it in and install it. You need to take it apart. But for elevators, various parts need to be attached to each other. And how do you do this? You do this through screws. Screws need holes. And historically, the elevator mechanic would drill the hole on the site. And as elevators have gotten more advanced, more parts, more demands for reliability, they decide, you know, we're actually going to drill these holes in the factory. Like when you get an Ikea piece of furniture, you're not drilling any holes. The holes are already drilled for you because it's safer, it's cheaper, it's more accurate to drill them in a factory where you have controlled conditions and more advanced machinery and whatever. It's more precise. So the union and the companies, they fight over who is allowed to drill what hole where. In some cases, the union has the right to drill the hole. But in fact, it needs to be drilled in a factory for alignment purposes because, you know, it needs to be in the exact right place. So they settle and they drill the hole twice. So the company drills the hole, a small hole in a factory, usually somewhere in Asia, and then they ship it to the United States and then the mechanic gets to drill a larger hole. You know, they use the small one for alignment. They've got their pilot. Yeah, a pilot hole. So anyway, that's just one example. But there's a lot of electronics that, you know, are essentially taken apart and then put back together in the United States because the union contract, you know, they want to preserve as much work as possible. The wages are also very high. However, you know, wages in general in the U.S. are high. So I don't think that's really an issue or can be changed. But the unproductivity of the workers, you know, of the contract really is a big problem. It takes about twice as long in the United States to install an elevator as in Europe. In Europe, you can usually do about two stops. That is two floors per week in the United States can do about one per week. So it takes about twice as long. And, you know, a lot of these inefficiencies are determined by the contract between the companies and the workers. And these are fundamentally private because, you know, the companies are private and the workers are private individuals in a union. So what role is there for government? Well, the fact that we make it so hard to enter the market for other companies really strengthens the hand of the union because it's very hard to change the contract in an existing company. Otis, let's say, you know, they've got tons of elevators and tons of workers. And, you know, if the company said, oh, actually, we want to be able to drill all the holes we want in the factory and we want to make this more efficient so you can install an elevator in half the time, the workers might go on strike. And that's really disruptive and companies don't want to tolerate strikes. So the easiest way to challenge the situation would be for new firms to enter the market. Firms that are in Europe or in Asia, but not in the United States and are making these parts and already have them just sort of enter the market, you know, hire new workers and make it clear from the start we're doing things more efficiently in this company. But they can't. It's very difficult to enter the market because of the technical standard, to a lesser extent, because the size of the elevator is just so large you'd have to manufacture whole new parts just to make the elevator so large. So the fact that it's very difficult to enter the market really strengthens the hand of the union and sort of setting the terms they'd like. The other thing that is a problem is the immigration system in the United States. There's really no way for a construction worker as a construction worker to legally enter the country. So a lot of them enter illegally and they tend to work in the non-credentialed fields like hanging drywall or doing framing or landscaping or something like that. Whereas, you know, elevators, plumbing, electrical, mechanical, they typically need a license to work in these fields. So it's not really open to undocumented immigrants and there's not an easy legal immigration pathway. I mean, you can win a visa lottery or something like that, but compare this to the European Union. The European Union fundamentally is a big free trade zone, free movement of people, services, capital, labor. And so in Europe, ever since the European Union was expanded to include Romania, Bulgaria, Poland, the lower income countries, the new installation market in Europe has really been taken over by immigrants. So typically in a country like Germany or Switzerland, the more difficult work of repairing, modernizing and maintaining elevators, this is the more intellectually challenging work. And you have to solve problems is typically done by locals, either, I don't know, Germans or Swiss or just, I don't know, Romanians who've been there for a while or something like that. Whereas the installations are generally done by essentially itinerant workers from Eastern Europe who will be bussed in, spend two weeks installing elevators and then go home. And that's because installing an elevator is fairly easy work. It is physically demanding work. You're in the shaft and you're, you know, hauling around these heavy parts and, you know, having to drill this into that. So even in the United States, typically it'll be the younger workers who will work in new installations. And then as you get older, you get more experience troubleshooting these complex mechanical and electronic devices. But also you don't really want to, you know, your body is sort of starting to give out, you switch to service and maintenance. So in Europe, their more open immigration system with Eastern Europe allows for more labor, easier to hire workers, easier to hire workers who are not already in this union system that it really resists productivity. So this is a difficult one to solve. The government has some levers with the technical standard, you know, they could open up the market to other companies.

Shane Phillips 1:08:25
OK, so let's wrap up here with some recommendations from your report. First, you advise a general change in attitude in North America to think about safety and access more holistically and acknowledge, as we talked about, that absolute safety at the expense of accessibility or affordability may not be everyone's preference. Tell us more about that. And I kind of feel like there's an analogy to TSA airport security since 9-11 somewhere in there.

Stephen Smith 1:08:54
The number one thing I think people need to recognize that the biggest issue in the United States is the cost of limited access to elevators. It's not that the elevators are somehow less safe or not large enough or, you know, we need to focus on the fact that we have, in some cases, an order of magnitude fewer elevators than other countries and that they cost three to four times as much. That needs to be the overriding concern of everyone in the industry, of every regulator, really, because, of course, to the industry, the costs are a benefit. Regulators need to focus on the lack of elevators and they need to see that as the number one problem and sort of stop viewing themselves as law enforcement looking for tiny little holes and safety lapses to fix. They need to acknowledge the number one problem is cost and access.

Shane Phillips 1:09:38
So beyond that kind of broad recommendation of a change in attitude, you also recommend that we abandon these US and Canada only technical standards that you talked about and adopt the European standard used everywhere else in the world. Tell us how you envision that transition taking place, because I don't think it's just like we're no longer going to do the US and North American standard and it's just going to immediately transition over. So what does that shift look like and what does that mean in terms of cabin size standards? Because, you know, are these part of these technical standards in general or is that really a separate thing that has more to do with the building code and so forth?

Stephen Smith 1:10:16
Those are two separate issues. So for the technical standard, what I would like to see is I'd like to see the global European standard accepted alongside the North American ones so the designer can choose which they'd like to have the elevator certified to. In the long run, I suspect that people will no longer use the North American standard. That's certainly what the North Americans believe. If you give both options, the North American one will become deprecated. So eventually you probably want to phase out the North American one. There's no sense in spending the resources to develop it if everyone's building to the European slash global one. So, you know, in the medium term, you could accept both. The size thing is a separate issue. It's not in the technical standard. I think we should probably just copy what the rest of the world does. Different countries do it a little differently, but you can essentially just take the average. And for high rise buildings, you might want to keep the bigger ones. I don't know. But for mid-rise buildings, there should be a significant reduction in size. And we should, you know, going back to the idea of recognizing the cost and access is the number one issue, we should focus on really like the minimum that we want, which is that people in wheelchairs can access buildings and everything else. We need to be a little more realistic about what we can get and the benefits of it and, you know, allow smaller cabins. And certainly in a low rise and many mid-rise buildings, I think that'll lead to the elevators being about half the size.

Shane Phillips 1:11:32
And, you know, a lot of this comes down to either changing to a different set of regulations or reducing the stringency of some of these regulations, like with elevator size. We didn't talk about this, but things like eliminating state licensure for elevator workers is another thing. And of course, allowing smaller elevators. But you also recommend some stronger requirements, I guess. Things like requiring elevators in more circumstances and having the government play a bigger role in worker training. Could you talk about those as well?

Stephen Smith 1:12:03
Yeah, the United States, surprisingly, the codes not require an elevator at literally any height. Technically speaking, you could build a 50 story building with an elevator. Obviously, no one's doing that. But as reforms are passed and as the cost of elevators comes down, I would like to see requirements to build elevators. The situation that you sometimes see on the West Coast of, you know, four or five, six storey buildings that elevators, I think we should consider whether that should be allowed. It should gradually get more stringent as the cost comes down so that you're really sort of meeting the market and not trying to exceed it very much. Because, you know, then you might make buildings impossible to build at all. As for worker training, this is a more complex topic, so I won't get too into it. But the United States does heavily subsidize certain forms of education and not others. And technical training is not one that we put a lot of resources into. In central Europe, they do a much better job of training construction workers. And, you know, being an elevator mechanic is one of the more skilled construction trades. So the government should probably take a stronger hand in training there.

Shane Phillips 1:13:07
Last question. You've been involved in single-stair reform as well as this work on elevators. Single-stair reform has been adopted pretty broadly in a very short amount of time. Many cities and states have changed their rules to allow a single stairwell for egress up to six stories in some cases following what Seattle and New York City and Honolulu have done for a long time. Have you or are you seeing similar progress on elevators or are there hints of it? What has your experience been so far working toward reform after the publication of this report?

Stephen Smith 1:13:43
I would say there's been hints of it. You know, single-stair, Mike started talking about this, I don't know, five plus years ago. And now the laws are just sort of starting to get passed and things are starting to change. There's been a lot of movement, but not a lot of people have reached the finish line. With elevators, I see a similar trajectory. There are more special interests in the elevator world. I will say there are companies that build elevators, there's no company that builds exclusively stairs. There's a union, you know, so it is a bit trickier and, you know, it's more complex electromechanical piece of equipment. But yeah, I mean, I see it proceeding roughly the same. I suspect in five years, there's not going to be quite the same progress in elevators. But if anyone is a legislator or, you know, an organization that works on these issues, get in touch and I can tell you where this is going next, because, yeah, I mean, it is moving forward in various ways. There was a bill introduced in Washington that died in the first round, but a lot of the single stair bills did, too. And I think it's coming. But, you know, it's a more insular world and it'll probably take a bit more effort than stairs did. And anyway, the single stair thing is far from finished as well. The reform is just starting to happen.

Shane Phillips 1:14:46
Well, I like that as a hopeful, optimistic place to end. Stephen Smith, thank you for joining us on the Housing Voice podcast.

Stephen Smith 1:14:53
Thank you.

Shane Phillips 1:14:55
You can find a link to Stephen's work on our website, lewis.ucla.edu. Show notes and a transcript of the interview are there, too. The UCLA Lewis Center is on the socials. I'm on Blue Sky at @ShaneDPhillips and Mike is on Twitter at @MichaelManville6. Thanks for listening. We'll see you next time.

About the Guest Speaker(s)

Stephen Smith

Stephen Smith is the executive director of the Center for Building in North America, which conducts research on building codes and standards and advocates for reforms to improve affordability and quality for multifamily housing especially. The organization has been behind the push across the U.S. for allowing mid-rise buildings with a single exit, in line with global standards, and has also conducted research on the high cost of elevators in North America.
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