By John Banks, president, REBNY
A strong local economy fueled by the real estate industry is making a major impact on this year’s city budget.
Mayor Bill de Blasio, City Council Speaker Melissa Mark-Viverito, and members of the City Council recently agreed on a balanced budget for the 2016 fiscal year that represents a victory for New York residents.
The good-news budget was thanks in large part due to the economic engine that is New York City’s real estate industry.
The approximately $78.5 billion spending plan moves forward important initiatives for New York City, ensures that many vital services will receive funding throughout the year and places a strong emphasis on public safety.
Among the many key issues addressed in the budget is the hiring of new police officers.
The City will allocate $170 million to add approximately 1,300 new uniformed officers to the NYPD’s roster, along with reforms in overtime and civilianization that, when phased in, will generate over $70 million in savings.
This year’s budget also funds services such as six-day library service, new investments to improve schools, classroom breakfasts in 530 elementary schools, the expansion of the Emergency Food Assistance Program to serve needy New Yorkers.
Effective budgets are the foundation of what allows New York to remain the greatest city in the world, and the real estate industry plays a key role in that foundation.
Every year, $15.4 billion, or 38 percent of the total taxes collected in New York City, comes directly from the real estate industry.
From residential rental buildings and office buildings, to hotels and retail stores, these taxes are enough to pay for the City’s entire share of salaries for teachers, police officers, fire fighters, sanitation workers, and corrections officers, with more than $2 billion left to fund other vital City agencies.
In total economic impact (the combined direct, indirect, and induced effect of the local economy), the real estate industry accounts for an impressive $106 billion, or approximately 13 percent of the Gross City Product.
In addition to the 519,000, or 11 percent, of total city jobs and $33 billion in total wages, the real estate industry plays no small part in what make this years’ budget possible.
Crain’s recently reported the real estate industry has been particularly beneficial to our city’s public transportation system this year.
According to a report presented to my colleagues and I at the MTA Board, the Authority has received $732 million this year from mortgage and property-sale taxes — 40 percent more than the MTA budgeted for.
The significant difference in what the agency budgeted for is partly due to the real estate industry continuing to gain momentum as we exit the recession-induced slowdown.
In fact, more investment properties were sold across New York City in 2014 than ever before, and the average price per square foot of property has increased 20 percent citywide.
In addition, there is ongoing construction and renovation going on at the World Trade Center, Grand Central Terminal, and Penn Station, which will result in a more efficient public transportation network that will accommodate more people.
With the additional $211.8 million provided by the real estate industry, we may see projects such as these expedited, as well as existing services improved.
In other REBNY News:
July 14 is REBNY’s Residential Ethics Course for New Members. From 9 a.m. to 10:30 a.m. in the Mendik Education Center, REBNY members may come take this non-credit course. Registration is required, and more information can be found on rebny.com or by contacting ResidentialEthicsCourse@rebny.com.
August 18 is REBNY’s next Residential Breakfast Club Seminar. From 9:30 a.m. to 11 a.m., join your fellow REBNY members at this free seminar in our Mendik Education Room, where our top industry leaders will be imparting hints and tips to improve your business. For more information, contact Yesenia Dhanraj at YDhanraj@rebny.com, or check the Events section of www.rebny.com.
The City has developed a new e-cycleNYC program to assist residential buildings in complying with a new which makes it illegal for New Yorkers to discard electronics in the trash.
Residential buildings wishing to participate in this free program will be required to sign a Site Sponsor Agreement, and REBNY’s Residential Management Council and its legal team have reviewed the Terms of Agreement with the Department of Sanitation and ERI, who have agreed to REBNY’s recommended changes.
Special thanks to Ben Kirschenbaum, Eva Talel, and Michael Wolfe for dedicating their time and expertise on behalf of the industry.
Join REBNY on July 16 at the New York Law School for a keynote address by Council Member Dan Garodnick, Co-Chair of the East Midtown Rezoning Steering Committee.
This event, from 8 a.m. to 10 a.m., will be one of the first forums following the release of the Committee’s recommendations to the City, and will be followed by a panel discussion with Dr. Michael Horodniceanu, President of MTA Capital Construction and other experts in Development and Real Estate on the future of Midtown East. For information on how to RSVP, contact Johann Hamilton at Jhamilton@rebny.com.