New york city residential building permits rose by 33 percent in 2011 but remain 74 percent below 2008 peak
A New York Building Congress analysis of U.S. Census data found that the New York City Department of Buildings (DOB) issued residential permits for 8,936 units in 997 buildings in 2011, a 33 percent increase from 2010, when permits were authorized for 6,727 units in 1,074 buildings. The number of permits issued in 2011, however, remains 74 percent below the 2008 peak of 33,911 units in 2,434 buildings.
This was the third consecutive year in which the DOB issued less than 9,000 residential permits (6,057 permits were issued in 2009). By comparison, the DOB issued more than 30,000 residential permits annually between 2005 and 2008. Between 15,000 and 25,000 permits were issued annually from 2000 through 2004.
Queens has led the five boroughs in the total number of residential permits issued since the start of the economic downturn in late 2008. Between 2009 through 2011, 7,014 units were authorized for construction in Queens, representing 32 percent of the Citywide total. Manhattan was next with 4,801 authorized units (22 percent), followed by Brooklyn (4,618 units/21 percent). During the same three-year period, the DOB authorized construction of 3,723 Bronx units (17 percent) and 1,659 units (8 percent) in Staten Island.
Cost Per Unit Declines
The estimated cost of construction per unit fell to $97,000 in 2011, down from $119,000 per unit in 2010, a decline of 18 percent. This marks just the second time since 2000 that the anticipated construction cost per unit dipped below $110,000.
While the Building Congress is not able to precisely pinpoint the factors that led to last year's drop in unit cost, it was not due to a decline in overall construction costs, given that the price of materials and labor has risen slightly in recent years. Rather, the drop is likely the result of a general shift away from the types of high-end, luxury units that typically drive up unit costs.
Slow But Steady Rebound
The recent uptick in new residential permits serves as yet another sign that the residential construction sector is in the midst of a slow but steady rebound. As reported in January by the Building Congress, residential construction starts, which encompasses new construction and interior renovations, increased 23 percent by value in 2011. In addition, the City's list of stalled construction sites, which recently fell below 600 for the first time since May 2010, has been in gradual decline over the past 15 months. Recent reports also indicate that apartment vacancy rates are dropping while prices have risen in the City, suggesting greater demand for new housing.
"While it is far too early to pop the bubbly, recent data point to a very gradual yet nonetheless encouraging rebound in residential construction," said New York Building Congress President Richard T. Anderson. "Our optimism must be tempered, however, by the recognition that we still have a long way to go. The Building Congress has consistently held that New York City must produce an average of 20,000 new housing units annually simply to keep pace with population growth and to replace aging or lost housing stock."
Mr. Anderson added, "Given the precarious nature of the recovery, it is important that the City aggressively pursue a program of tax incentives, zoning adjustments and other steps, such as adaptive re-use of vacant sites and the elimination of inefficient public regulations, in order to further stimulate new residential construction."
Charts and Diagrams
Source: US Bureau of the Census
Source: US Bureau of the Census
Source: US Bureau of the Census
Raw Data
