February 16, 2023
While New Filings Increased Compared to Prior Quarter, Production Is Still Not High Enough to Address the Housing Crisis and Recent Analysis Indicates Many Proposed Projects are Struggling to Move Forward
NEW YORK, NY –The Real Estate Board of New York (REBNY) today released its Quarterly New Building Construction Pipeline Report for Q4 2022. This report dissects public information on new building projects to draw historical comparisons and review the current development pipeline in New York City. This latest Construction Pipeline report should be read in context with REBNY’s separate monthly report on foundation permit applications, which demonstrates many proposed projects may not actually advance to actual construction, particularly given the expiration of the 421-a tax abatement.
The full Q4 2022 Construction Pipeline report can be downloaded here.
According to the report, there were 388 new building filings in Q4 2022 representing 12.6 million square feet. The number of projects is a 11% increase, and the proposed square footage is a 95% increase from the previous quarter.
However, it is important to note that Q3 2022 had among the lowest levels of new building proposals of any quarter in recent years. With that in mind, the volume of filings in Q4 2022 were low compared to historical data, as new building filings were 20% below the overall median and 22% lower than the quarterly average since Q1 2008.
The total number of proposed rental housing units was 7,886 in Q4 2022. This represents a 136% increase from the previous quarter, which was one of the lowest quarters on record for proposed multifamily housing projects. While any increase in proposed housing units is positive, it is also important to view this Q4 data alongside REBNY’s analysis of December 2022 foundation permit data, which showed that only 590 planned housing units were actually proceeding to the construction phase at that time.
Based on this data, it is clear that the housing pipeline is still far behind where it needs to be to address the City’s long-term needs. Experts have estimated the City must build approximately 560,000 new units of rental housing by 2030 just to keep pace with projected growth.
“New Yorkers need much more aggressive policy solutions to help spur residential construction if we are to escape from the housing supply crisis we face today,” said REBNY Senior Vice President of Policy Zachary Steinberg. “Without an abundance of quality housing, New York will see its appeal for business diminish and fail to meet its responsibilities to current residents. The stronger fourth quarter numbers are helpful, but do not put us on the path to creating the housing we need.”
“While the positive trend in new construction activity in New York shows some welcome momentum, it is still clear that continued investment must be made in critical development projects that are centered around the creation of housing, economic stimulus and good paying union jobs for hard working New Yorkers,” said Gary LaBarbera, President of the Building and Construction Trades Council of Greater New York. “Although this overall lag in development and new construction certainly challenges our collective efforts to fully revitalize our economy, we are confident that city and state leadership will identify solutions and adopt commonsense policy to reverse this trend and remain committed to collaborating with them and other key stakeholders to address the obstacles we are currently facing. Our dedicated and skilled tradesmen and tradeswomen stand at the ready to drive forward the necessary development that will not only address housing shortages but provide more New Yorkers with a clear path to the middle class.”
“Slight upticks show signs for an improved construction business environment with good paying jobs. Real estate and construction represent 10 percent of NYC’s GDP and is critical to its economic and social infrastructure,” added Lou Coletti, President and CEO of the Building Trades Employers Association (BTEA). “We are happy to see some ground gained back in the fourth quarter but know this will only be temporary without further public support for new residential production.”
“It’s a relief to see an uptick in the number of new building filings and total proposed construction square footage to close out 2022, but we still have a lot of work to do to solve our housing crisis,” said Carlo A. Scissura, Esq., President and CEO of the New York Building Congress. “New York is still significantly behind historic trends, especially with proposed residential and multi-family construction, at a time when the New Yorkers desperately need new housing. We need to buckle down and incentivize the industry so that we can increase our housing stock, create good-paying jobs, and grow the economy. It’s time to get to work and build.”
For more information about REBNY research reports, visit go.rebny.com/Reports.
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ABOUT THE REAL ESTATE BOARD OF NEW YORK
The Real Estate Board of New York (REBNY) is the City’s leading real estate trade association. Founded in 1896, REBNY represents commercial, residential, and institutional property owners, builders, managers, investors, brokers, and salespeople; banks, financial service companies, utilities, attorneys, architects, and contractors; corporations, co-partnerships, and individuals professionally interested in New York City real estate. REBNY conducts research on various civic matters including tax policy, city planning and zoning, rental conditions, land use policy, building codes, and other city, state, and federal legislation. REBNY regularly publishes market data, policy reports, and broker surveys. In addition, REBNY provides for its members: informational, technical, and technological resources; networking and charitable service opportunities; qualifying and continuing education courses; professional education programs, seminars, and designations; career-changing awards; legal advice; and a wide range of additional member benefits. For more information, please visit www.rebny.com.