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NYC Real Estate Industry Generates $15.4 Billion in Taxes, Enough to Fund Vital City Services According to New Study
March 5, 2014
--Industry provides 11 percent of employment opportunities in the Big Apple and $33 billion in salaries--
New York City’s real estate industry generated $15.4 billion in taxes in 2012, which represents 38 percent of the city’s tax revenue, according to a new report commissioned by The Real Estate Board of New York (REBNY) and completed by AKRF, Inc. In sum, the total economic impact of the real estate industry’s activities was an enormous $106.2 billion in jobs, wages and output— including approximately 13 percent of the Gross City Product.
The comprehensive economic impact study titled, “The Invisible Engine: The Economic Impact of New York City’s Real Estate Industry,” reveals that over the course of 2012, revenue-generating properties provided enough tax revenue to pay the City’s entire share of $13.1 billion in payroll expenses for teachers, police officers, fire fighters, sanitation workers and correction officers and still have $2.3 billion left to fund other city services. These numbers factor in taxes from properties such as office and residential rental buildings, hotels, retail stores and utility properties and do not include one- and two-family homes, cooperatives, condominiums, schools, hospitals and other publicly-funded structures.
"This report demonstrates there’s a lot more to New York City’s real estate industry than meets the eye. ‘The Invisible Engine’ is proof that New York City’s real estate industry is not only a major economic engine but it also provides the tax base the City needs to fund the salaries of every single school teacher, police officer, fire fighter and a lot more city services,” said Steven Spinola, REBNY President. “These vital city services depend on the real estate industry for funding and are part of what make New York a great place to live, work, and raise a family. The report makes it clear that we must continue to build revenue-generating properties throughout the five boroughs and keep the ‘Invisible Engine’ running.”
Excluding property taxes, the real estate industry generated $1.6 billion in additional tax revenue for the city in 2012, including nearly $700 million from the construction industry and approximately $920 million from non-construction services such as real estate agents and brokers, property managers, real estate appraisers, property and title insurance and others.
As one of the major job generators in the city, the real estate industry supported nearly 519,000 jobs—which represented 11 percent of the jobs in the City and $33 billion in annual wages.
Non-construction real estate activities supported 322,700 jobs, or seven percent of the city’s total, with an average wage of $51,780 in 2012. The construction industry supported 196,200 jobs with an average salary of $79,175.
“The report demonstrates the enormous contribution of the real estate industry to the city's economy and to the city budget. The revenues generated from the real estate industry fund services vital to a thriving and vibrant city,” said John Neill, vice president of AKRF.
“We’re glad to see a report telling the story of how much of an economic engine the real estate industry is for New York City. Responsible development that provides a path to the middle class and creates family-sustaining jobs is good for the economy and good for the City. We look forward to educating the public about how the real estate industry can have a broader impact, and hope to work closely with REBNY on building a better city for all,” said Hector Figueroa, President of 32BJ SEIU.
“Real estate development in New York City has for a long time created good private sector jobs in construction and generated the revenue needed for essential public services and investments in our infrastructure that are fundamental to growing our economy and middle class opportunity,” said Gary LaBarbera, president of the 100,000 member Building and Construction Trades Council of Greater New York. “We must keep our city an attractive place in which to live, do business and visit so that we can continue to promote responsible development.”
“NYC depends on the intelligent and creative use of land to make this city work in all five boroughs. We cannot create more land but the real estate industry produces the space we need to live and work. This thoughtful report highlights the vital role that the real estate sector plays in the life of our city and as a fundamental revenue source for the city and state government,” said Mitchell L. Moss, Henry Hart Rice Professor of Urban Planning and Policy, NYU.