“Making Real Progress”: NYC Construction Spending Surging
If those construction cranes and jackhammer noises feel ubiquitous, it’s because New York City is building like it hasn’t in years.
Construction spending in the city is expected to hit $80 billion this year, according to data from the New York Building Congress reported by Crain’s. That’s a $10 billion increase from a year ago and a 16 percent increase from the previous three-year period.
Residential development accounts for a bulk of the building activity. The city is on track to authorize permits for projects spanning more than 31,000 units by the end of the year; the city averaged approximately 20,000 unit authorizations across each of the last five years.
Residential sector spending is expected to reach $27 billion this year, an increase of nearly $8 billion from a year ago.
Nonresidential construction, meanwhile, is expected to reach $29 billion by year’s end, up nearly $7 billion year-over-year; the three casino projects account for more than $17 billion in planned investment alone.
The rest of the construction spending stems from capital investment in public facilities and infrastructure.
The report points to a handful of successful interventions for the construction industry, including large-scale rezonings, a rise in office-to-residential conversions and the reforms ushered in by the City of Yes legislation.
To that end, the Building Congress is predicting $243 billion in construction spending in the next three years, more than a third of which could stem from the residential sector. There could be more than 70,000 residential units built in that time.
“Despite high interest rates and economic uncertainties, building is booming, and permits for new residential units are expected to jump 60 percent this year,” NYBC chief executive officer Carlo Scissura said in a statement.
Still, there are headwinds on the horizon. The report specifically cited the need to expand the 485x affordable housing tax break without giving a recommendation for doing so.
“We’re still not where we need to be to stem our housing crisis, but through office-to-residential conversions, new developments, and rezonings, we’re making real progress,” Scissura said.
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