New York City collected $20.4 billion in taxes from the real estate industry in 2016, enough to pay the salaries of all teachers, police officers, firefighters, sanitation workers, correction officers and other services.
According to a report from the Real Estate Board of New York, the real estate industry is becoming increasingly responsible for the city’s growth, challenging the notion that New York’s economic fortunes rest on Wall Street. In 2016, real estate taxes, which includes property taxes, mortgage taxes, transfer taxes, hotel taxes and commercial occupancy taxes, would have been enough to cover the budgets of the Department of Education (47.7 billion), the New York Police Department ($4.4 billion), the Fire Department of the City of New York ($1.4 billion), the Department5 of Correction ($1 billion) and the Department of Sanitation ($0.9 billion). Even when all the department budgets are combined, there would still be $5.4 billion left over from the real estate industry’s tax contributions.
“The increasing tax revenue generated by income-producing properties means our industry is playing an even greater role in making New York a thriving place to live, work and raise a family,”said REBNY President John Banks, III. “Real estate is an enormously powerful economic engine, fueling more good jobs and funding more vital city services that ever before.
The real estate industry’s share of city’s economy has been expanding in recent years. The sector accounted for 43 percent of the city’s tax revenue in 2016. It outpaced other tax sources such as personal income (21 percent), owner-occupied properties (17 percent) and sales (12 percent).
According to REBNY, the industry’s tax contributions grew by 24.4 percent compared to 2013. The real estate industry’s share of the city’s total taxes collected also grew by 2 percent during the same three-year period. Meanwhile, the sector generated $139.4 billion in total economic output, up 20.1 percent from 2013.
“The real estate industry plays such a critical role in New York City, not only by generating $139.4 billion in economic activity in the region but also by providing $20.4 billion in direct support to fund the daily municipal services that impact the lives of every New Yorker,” said Alfred Cerullo, III, the president and CEO of the Grand Central Partnership.
However, growth was not entirely outbound. The three-year period between 2013 and 2016 also provided employment gains in the sector. In 2016, the real estate industry generated 606,000 jobs, up by 9.5 percent from 2013. Direct wages in the construction sector also grew by 28.7 percent to $45.8 billion, resulting in an average salary of $75,700 per year for workers directly employed in the industry.