Is The Big Apple Building Boom Coming To An End?
The city sees a staggering 40 percent drop in building applications since 2015.
New construction applications went down a massive 38 percent since 2015—but fearing the worst may be premature. New York City’s building business is still on solid ground. The numbers on both sides of 2015 reflected the mad scramble to get applications in before the city’s 421-A tax abatement laws expired—and a slow down after it elapsed.
The 2014 numbers, even by NYC’s heady standards, were phenomenal. In total, 44,817 new applications were filed for single and multi-unit development projects. In conjunction with the frenzy to beat the tax abatement deadline, a perfect storm of available land and lending also prevailed.
Manhattan didn’t register too much of a dip, with numbers down from 5,593 to 4,193, reports New York Yimby. Queens saw the applications drop from 9,591 to 5,981. Brooklyn was impacted even worse, with numbers dropping from 11,554 to 6,449. The Bronx took a sucker punch to the gut with 6,317 units filed in 2015 to 3,919 in 2016, and Staten Island rounded out the five boroughs’ blue mood with a fall from 1,214 to 831.
So what does it all mean? Although a drop in applications doesn’t sound like good news, numbers for the previous two years might have gone up for artificial reasons. Expecting them continue unabated would be like expecting Usain Bolt to run at his 100 meter pace when running twice around the track.
The fact that hotel permits went up by 30 percent is interesting on a number of levels. It shows that Airbnb hasn’t dented confidence in the hospitality business. Also, it also reflects that NYC is becoming city for visitors rather than renters and home owners. Exorbitant rents and purchase prices are driving potential residents elsewhere.
Don’t expect the downtown in development to register too dramatically this year. The permits filed in 2014 are now bearing fruit with the finished structures transforming NYC’s skyline. However, the numbers might continue their free fall in 2017. So, now would be the time for savvy developers to hold on to their cash until things bottom out.
It all sounds rather familiar, doesn’t it?
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