New York City Construction Slumps To Lowest Level In A Decade
New construction development in New York City in the first quarter fell to its lowest level in 10 years, dampening hopes for a swift economic recovery from the coronavirus pandemic.
Builders filed to develop 5.4M SF of new construction in applications to the city’s Department of Buildings in the first quarter of the year, per analysis from the Real Estate Board of New York. Though the overall number of filings actually jumped year-over-year, the quarterly report found the total square footage represents a 42% drop from the same time a year ago. It is also the lowest total square footage figure since the last quarter of 2010. Filings for new multifamily buildings reached their lowest level since the third quarter of 2011.
“Congress must act swiftly to pass President [Joe] Biden’s infrastructure plan, which will play a critical role in advancing a strong economic recovery for New York and creating thousands of good jobs,” REBNY President James Whelan said in a statement. “It is also more important than ever for City and State elected officials to step up and play their part in advancing policies and legislation that will kickstart the economic engine of the construction and development industries and address the City’s increasingly urgent housing needs.”
The number of new building filings hit 407, a 25% drop from Q4 2020. The total number of projected apartments filed during the quarter reached just over 3,300, which is less than half of the number of units from the last quarter of 2020 and an almost 50% year-over-year decrease.
The outer boroughs are seeing the bulk of the planned new construction activity; Manhattan recorded just 22 filings — actually an increase from the previous year. The Bronx had 61 new building job application filings, a 27% year-over-year increase. Brooklyn’s figure fell back by 28% to reach 93 filings, while Queens was the most active borough with 129 filings, a 39% drop from the first quarter of 2020.
The report notes that the start of the year is generally slower than other quarters, but found the decrease in square footage underscores the need for government investment to encourage development.
In a statement, REBNY stressed the need to invest in housing construction, and the lobby group’s plan to keep rallying against a city proposal that would essentially limit the number of after-hours variances given to construction projects.
In March, the Biden administration unveiled its $2 trillion infrastructure spending plan, which aims to revamp roads and bridges — as well as upgrading the country’s housing supply and electrical grid. A key part of the bill involves raising the corporate tax rate and increasing capital gains taxes, which congressional Republicans oppose.