Construction in New York City is usually judged by how many building permits are approved every year. When you look at the number of permits that are issued each year, it is important to take other elements into account as well. For example, the number of permits issued in 2015 was high because that was the year that the 421-a tax abatement program expired. Developers wanted to get their projects approved before the program expired so they could benefit from their new construction projects.
Construction did fall off a little towards the end of 2015, but now it looks like there has been a resurgence in residential construction throughout the city. To go along with that new residential construction is a rise in commercial construction as well. What makes this trend hard to figure out is that there is no extra incentive to cause developers to request so many new building permits. It could be that the new construction that has been going on in New York City over the past few years has finally built its own momentum, and that would be good news for the construction industry.
The Expiration Of 421-A Had A Significant Impact On Building Permits
In September 2016, 10,982 new building permits were issued throughout all five boroughs of New York City. Under normal circumstances, that would be an impressive number. But when the September 2016 numbers are compared to the September 2015 results, the real effects of the 421-a tax program can be seen. In September 2015, the number of new housing units approved for construction was 42,140. It is safe to say that 421-a had a significant impact on the New York City construction industry.
For 2016, the increase in building permits was extremely evident. In January 2016, the number of permits issued was 462. But as September 2016 came to an end, that number had skyrocketed to 2,218. After an up and down summer in terms of new permits being issued, it looks as though the upward trend will continue as September was the strongest month of the year for building permits.
The Dollar Volume For Construction Soars
According to CommercialObserver.com, the total dollar amount for construction in New York City could reach a record-setting $41 billion. Estimates indicate that commercial construction is pulling ahead of residential construction for 2016. However, that dollar volume is an impressive number and it shows the upward trend experts are expecting when it comes to construction in New York City.
One area of construction that has been a big help in bumping up the number of building permits is commercial construction. It is estimated that 25.9 million square feet of new office space will be built throughout New York City between 2010 and 2019. This is a significant increase over the 19.4 million square feet of new offices built between 2000 and 2009.
When it comes to commercial construction, the economy can often have a significant impact on how many permits are issued for a given time period. The time from 2000 to 2009 includes the economic crash of 2008, and that would account for lower numbers of building permits being issued. From 2010 to 2019, the New York City building industry benefited from the economic recovery which helped to boost the numbers. But it is important to note that the 421-a tax program was only for residential construction, which means that the growth in commercial construction was not artificially enhanced by the expiration of 421-a in 2015.
What Does The Future Hold?
New York City’s population increased by 375,000 people from 2010 to 2015. The result is that New York City’s current population of 8.6 million people is a new record, and it looks like that upward trend will continue for some time to come. The increase in good paying jobs in many of the five boroughs keeps bringing people to New York City, and all of those people are going to need places to live.
For the foreseeable future, New York City residents can expect the number of building permits being issued to continue to rise, which is a good and bad thing. The city is already trying to rezone several parts of the city to make way for new residential housing, but any rezoning effort comes with challenges that the city is trying to face. However, the increase in building permits being issued means more jobs for New York City residents and that is a trend that has everyone excited.