Bronx Leads the Boroughs in First Half of 2016
The number of residential permits issued by the New York City Department of Buildings (DOB) dropped by more than half in the 12 months after the demise of the 421-a program but remained roughly on par with the annual numbers experienced over the course of the past decade, according to a New York Building Congress analysis of U.S. Census data.
During the 12-month period running from the anticipated expiration of the program on July 1, 2015 through June 30 of this year, the DOB authorized construction of 20,144 new units of housing in the five boroughs, a drop of 62 percent from the 52,618 residential permits that were issued between July 1, 2014 and June 30, 2015.
That said, the 20,144 permitted units over that 12-month span is right in line with the average of 19,928 residential permits that were authorized annually between 2005 and 2014.
“New York City’s residential sector essentially experienced a perfect storm of circumstances between late 2014 through the middle of last year,” said New York Building Congress President Richard T. Anderson. “In addition to the investment community’s continued and seemingly insatiable appetite for residential projects, local developers were working furiously to get their projects fully permitted in advance of anticipated changes to the 421-a program. All of this produced an unprecedented, one-time surge in permits.”
Mr. Anderson added, “While many observers had expected the number of permits issued post-421-a to plummet in the face of the expired benefits and as new development was absorbed, judging from the numbers, it appears that the market merely paused to catch its breath. Of course, the residential sector is cyclical, so the big question is what happens when the market cools, especially if an agreement can’t be reached on a successor to 421-a.”
Through the first six months of 2016, the Bronx led all boroughs with 1,926 DOB-authorized units, followed by Brooklyn with 1,394 units, Queens with 1,222 units, Manhattan with 821 units, and Staten Island with 621 units. Both the Bronx and Staten Island saw an increase in the number of permitted units during the first half of the year compared to the same period in 2015, while Brooklyn, Manhattan, and Queens experienced considerable declines.
Overall, the Bronx has accounted for nearly 32 percent of all permitted units in 2016, after averaging just 11 percent of all authorized units between 2011 and 2015. If this pace were to hold through the rest of the year, the Bronx would take the top spot for the first time since 2009 and just the second time since at least 2000.
Brooklyn had led the City with the most units authorized for construction for the past four consecutive years. In 2015, the DOB permitted the construction of 26,026 units in Brooklyn, followed by 12,667 in Queens, 12,267 in Manhattan, 4,682 in the Bronx, and 541 in Staten Island.
“Brooklyn has been on an epic run over the last few years with Manhattan and Queens right behind it. But as of now, 2016 is shaping up to be the year that the development community finally rediscovered the Bronx,” noted Mr. Anderson.