A new report from the Real Estate Board of New York has found that the city’s building boom is bust and, without passage of President Joe Biden’s $2 trillion infrastructure plan, recovery could be slow.
“Congress must act swiftly to pass President 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,” said REBNY President James Whelan, who applauded Majority Leader Chuck Schumer for leading the fight for the bill’s passage.
“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.”
REBNY analyses City data to determine the total square footage of building proposals and number of apartment units planned and found both numbers to have reached a decade-low.
The proposed 5.4 million construction square feet in Q1 2021 is the lowest such figure since Q4 2010, while first quarter filings for new multiple dwelling buildings have reached their lowest point since Q3 2011.
The report shows that the total number of new building filings for Q1 2021 was 407, marking a 25 percent decline from Q4 2020. While there is traditionally less activity in the first quarter (and first-quarter new building filings actually increased compared to Q1 2020), the underperformance of proposed square footage and multiple dwelling construction highlights the need for local and federal action to meet New York’s post-COVID economic and housing needs, according to the report.
REBNY has joined with New York’s leading construction leaders to urge Congress to pass the infrastructure plan that would direct money towards putting Americans to work on repairing the nation’s infrastructure and shifting to greener energy.
Leaders at REBNY, along with the Building and Construction Trades Council (BCTC), Building Trades Employers Association (BTEA), and New York Building Congress, also continue to press public officials to support a package of reforms to address the industry’s challenges and kickstart the economy.
All four groups agree that implementing these measures will play a significant role in encouraging construction activity, creating good jobs, producing much-needed housing and supporting a strong economic recovery for New York City.
“It’s clear that investment in large-scale infrastructure and public works projects is needed now more than ever to jumpstart the city’s economic recovery. Fortunately, there is a thoughtful, timely, and robust plan introduced by the Biden administration that invests in New York and in our working people that Congress must pass immediately,” said Gary LaBarbera, President of the Building and Construction Trades Council of Greater New York.
“From day one of the pandemic, our members went above and beyond to ensure that essential construction work never stopped, and these hardworking tradesmen and tradeswomen are now poised to not only rebuild our economy but build the infrastructure that will lead New York City into the future.”
“The best and fastest way for New York City to improve its economy is to build its way back to prosperity.” said Building Trades Employers Association President Lou Coletti. “Rebuilding public infrastructure, while creating incentives to rebuild the private real estate market, will increase tax revenue and improve New York’s social infrastructure.”
“The only way out of this crisis is to build, which is why it is so important we pass the American Jobs Plan as soon as possible,” said Carlo A. Scissura, President and CEO of the New York Building Congress. “Building Congress members are ready to design and build the projects of the future, both here in New York City and across the nation. Building new schools, subway stations, affordable housing, offices and other infrastructure is key to our recovery and our long-term prosperity.”
All four organizations are advocating for action on jobs and housing. With the REBNY report showing construction activity hitting its lowest points since the wake of the Great Recession, they believe growing a pipeline of new housing development is essential to recovery. Since the end of the 2008 recession, New York City has added over 858,000 jobs, but only 125,000 newly constructed housing units – a rate of just 0.15 new homes per new job.
According to a recent New York Building Congress report, 82.7 percent of the city’s construction industry workers are employed in the private sector. NYBC said incentive programs and property tax benefits could redirect the private sector to public work and reignite a construction pipeline creating good jobs and affordable housing.
The four organizations are also opposing a city plan to amend After-Hours Variances (AHV) they believe would delay projects, lengthen their time to completion and add cost that would jeopardize jobs.
“Not only is it essential we find ways to keep the pipeline from drying up completely, but we also need to protect the current jobs within the construction industry,” said the organizations in testimony to the City Council. “New York needs policies that spur economic development and job growth.”