Is that based on labor costs only or are materials typically higher as well? It's similar out here in ca. where areas such as the bay area, coastal areas in general are far pricier mostly with labor costs. Some inland areas in so.ca are outrageous as well as mountain communities.

I've built in Manhattan, a dorm for NYU Law. It's important to have a general contractor with experience your part of the city.

A combination of things make it more expensive. The main thing is just being in the city, and the challenges that presents to a contractor. They charge for that. In my building they can only work from 9am to 3pm, and have to be out by 4pm. My building (and many others) has very specific insurance requirements. I wouldn't be surprised if the contractors 'tipped' the super to make sure they have undisturbed access to the freight elevator. They have to pay for parking tickets. And, just based on my location, contractors assume they can charge more. All these things contribute to a much more expensive renovation compared to outside NYC.

mightyanvil - you are absolutely right. I didn't even consider contractors who don't work in the city, and got one that has significant experience with NYC apt renovations. That experience doesn't come free though.

Here is a link that might be useful: My NYC renovation

Have a contractor friend who built in tokyo,japan. Access to the site for materials was by use of a crane as there was no access for even the work truck. A majority of the time they wheeled their tools on a push cart and walked to the site. Tight building quarters!