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Annual Tax Revenue Generated by NYC Real Estate Industry Increased by More Than 20 Percent Since 2013
January 10, 2017
Not including 1-3 family homes, coops or condos, industry generates $20.4 billion in taxes, enough to fund vital city services
Annual tax revenue generated by New York City’s real estate industry increased by 24.4 percent since 2013, according to a new analysis by the Real Estate Board of New York (REBNY) and completed by AKRF, Inc. New York City’s real estate industry generated $20.4 billion in taxes in 2016, which represents 43 percent of the City’s tax revenue. The real estate industry employs 606,000 workers with an average salary of $75,700 and was responsible for $139.4 billion in total economic output in 2015, a 20.1 percent increase from 2013.
In Fiscal Year 2016, revenue-generating properties provided enough tax revenue to pay the City’s entire share of $15 billion in payroll expenses for teachers, police officers, fire fighters, sanitation workers, and correction officers and still have $5.4 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-to-three family homes, cooperatives, and condominiums.
“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 John H. Banks, III, REBNY President. “Real Estate is an enormously powerful economic engine, fueling more good jobs, and funding more vital city services than ever before.”
Marc Shaw, Chair of the CUNY Institute for State and Local Governance, and former First Deputy Mayor of New York said, “Taxes from the real property tax has long been one of the stabilizing forces for NYC revenues. Its recent increase in the percentage of total Gross City Product represents the health of the sector and its importance to the New York City economy.”
“The real estate industry plays such a critical role in New York City, not only by generating $139.4 billion of 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. That’s why it’s imperative that we continue to support the efforts by the industry to modernize and upgrade their assets so that we continue to make our city an attractive environment to live, visit, and conduct business,” said Alfred C. Cerullo, III, President and CEO of the Grand Central Partnership, Inc. and former Commissioner of New York City’s Department of Finance.
“The real estate industry is a major driver of our city’s economy and generates hundreds of thousands of jobs. The sector continues to grow and responsible development provides a path to the middle class, creating family-sustaining jobs that are good for the economy and good for New York City. We look forward to working with REBNY and educating the public about how the real estate industry can help build a better city for all,” said Hector Figueroa, President of 32BJ SEIU.
“Real estate development has always been a driving force for New York City’s economy through the creation of quality private sector jobs in construction, as well as generating significant revenue needed for essential public services and investments in our infrastructure that are fundamental to growing our economy and middle class opportunities,” said Gary LaBarbera, President of the 100,000 member Building and Construction Trades Council of Greater New York. “Most importantly, the real estate industry is a vital component to keeping our city an attractive and competitive place to live, work and visit.”
“Inventing and reinventing buildings, whether for work, play or living, is what makes New York different from all other cities. Some cities make automobiles, some cities make sneakers, and others make airplanes. New York puts land to use in new and creative ways. The real estate industry in New York is the key to our capacity to innovate and compete,” said Mitchell L. Moss, Henry Hart Rice Professor of Urban Policy and Planning at New York University.
“A vibrant real estate industry is foundational to the health of the New York City and regional economies, not just in terms of tax revenues that fund a large share of the city's public services, but driven by the properties that house our businesses, residents, and visitors to the city who support the world's most powerful urban agglomeration,” said Sam Chandan, Larry and Klara Silverstein Chair and associate dean for NYU School of Professional Studies Schack Institute of Real Estate.
“New York City is in the midst of an unprecedented building boom, which has been fueled in large part by forward-looking, private sector developers and real estate owners across the five boroughs. Their investments are creating hundreds of thousands of well-paying jobs and helping to generate the tax revenues necessary to fund the critical City services that every New Yorker deserves and expects,” said New York Building Congress President & CEO Carlo A. Scissura.
In 2014, REBNY released a comprehensive economic impact study titled, “The Invisible Engine: The Economic Impact of New York City’s Real Estate Industry.”
REBNY’s 2016 update includes the following comparisons between Fiscal Year 2013 and Fiscal Year 2016:
TOTAL ECONOMIC IMPACT OF NYC’S REAL ESTATE INDUSTRY
- $139.4 billion in total economic output in 2015, a 20.1% increase from 2013
- Approximately 12.5% of Gross City Product (GCP), which is a 0.5 percentage point increase from 2013
- 606,600 total jobs, a 9.5% increase from 2013
- 15.3% = the increase in direct employment in the construction industry compared with 2013
- $45.8 billion in total wages and benefits, a 28.7% increase from 2013
- 16.6% = the increase in direct wages in the construction industry compared with 2013
- $75,700 = the average salary and benefits for a worker directly employed in the real estate industry, a 21.1% increase compared with 2013