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Study points to job growth as essential for economy
June 12, 2013
President, Real Estate Board of New York
The Partnership for New York City recently released NYC Jobs Blueprint, an in-depth analysis of our City’s economy that also outlines a set of recommendations for what the next Mayor can do, while collaborating with the public and private sectors, to ensure that New York remains a strong, inclusive city of opportunity.
Today, at $583 billion, NYC is the largest city economy in the world, with its population and private sector jobs at all-time highs. Despite two recessions, a global financial crisis and the 9/11 terrorist attacks, NYC’s economy is growing at an annual rate of 3 percent, outpacing that of the United States and most developed countries.
To remain the world’s leading city of opportunity for businesses and residents, NYC must maintain a solid rate of economic growth. The NYC Jobs Blueprint suggests benchmarks that the next Mayor could use to pursue reasonable aspirations for growth and opportunity in five key areas: more and better jobs; better educated and skilled workers; infrastructure that provides greater connectivity and accessibility; a safe and affordable living environment; and an efficient, disciplined and well-run city government.
I wanted to share with you highlights of some of the important issues to our industry.
For improving housing, the NYC Jobs Blueprint suggests to optimize existing housing resources; reduce costs of housing construction; prioritize long-term planning and sustainability; and improve services in high-crime communities.
Future development and more affordable housing are also needed. More than 36 percent of the city’s land use area has been rezoned and is ready to accommodate development of at least 80,000 new housing units and 41 million square feet of new commercial space.
Additionally, New York is losing middle-incomes jobs and households because they are being priced out of the market. The City must work together with the real estate and labor to expand the housing inventory and reduce housing costs.
Reforming property taxes is also needed. Property taxes make up nearly 45 percent of the city’s revenues, but the system is opaque and not constructed in a manner to address the City’s long-term economic needs.
Current tax laws include tax caps, abatement programs, varying assessment rates and formulas that favor owner-occupied properties at the expense of rentals, commercial uses and utilities.
In FY 2013, property tax exemption and abatement programs accounted for approximately $4.6 billion in foregone city revenue. As the NYC Jobs Blueprint points out, a system redesign is needed to create a more transparent tax regime that aligns with the city’s priorities and captures market value in its assessments.
Producing more jobs is also paramount for NYC. In the decade ahead, economic growth and accelerated job creation will depend on the ability of startups and middle market firms to reach bigger scale, particularly those in technology and other “tradable” sectors that exports goods and services to markets beyond the five boroughs.
The NYC Jobs Blueprint also offers suggestions on how the next Mayor could achieve benchmark aspirations for real Gross Domestic Product (GDP) growth, productivity growth, middle-wage job creation, and reduction in unemployment.
The report concluded that to fulfill its potential as a global center of job creation and upward mobility, NYC must strive to accelerate GDP growth of 3.1 percent to 3.8 percent; increase annual productivity from 1.1 percent to 3.0 percent and add 101,000 middle-wage jobs.
To help expand well-paying job opportunities, the economic development arm of the Partnership for NYC has committed $20 million to support development of urban tech campuses for entrepreneurs and startups with the goal of creating affordable live-work campus environments in each borough.
NYC Jobs Blueprint draws on information and analysis provided by Brookings Metropolitan Policy Program and fact-based research and analytical support from McKinsey & Company.
The report contains economic and demographic data that has not previously been aggregated for comprehensive analysis. As a result, it takes a fresh look at the trends and developments of the last decade and shares projections on how those will play out over the next 10 years.
For the complete report, go to www.nycjobsblueprint.org.
In other REBNY News:
Ethical behavior, competitive bidding, new taxes and negotiating mortgage contingencies are some of the hot topics for the Residential Downtown Breakfast Roundtable Discussion from 8:30 to 11 am on Friday, June 14, 2013 at the Brotherhood Synagogue, 28 Gramercy Park South. REBNY’s Residential Division’s Downtown Committee hosts this event where participants spend approximately 20 minutes at a table before moving on to the next subject table. Seating is limited. REBNY members are $25 and non-members are $35. Register at www.rebny.com. For more information, contact Jay Perez at firstname.lastname@example.org.
Don’t miss SFC’s Annual Party on Thursday, June 20, 2013 from 5:30 to 8:30 pm in the penthouse at The Centurion, 33 West 56th Street. Attendees will enjoy wine and hors d’oeuvres and great networking at this luxury 19-story condominium in Midtown Manhattan. The Residential Brokerage Division encourages people to bring a friend, guest or colleague. Tickets are $30 in advance and $40 at the door. Register at www.rebny.com. For more information, contact Jay Perez at email@example.com.