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  #1  
Old Posted Jul 27, 2015, 11:10 PM
Hamilton Hamilton is offline
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Historic Number of New Residential Permits in NYC

Highest number of new residential permits in 52 years! New numbers came out from the Census Building Permits Survey this week, and I could barely believe my eyes. All in all, about 52,553 new residential units have received building permits in the past 12 months in the 5 boroughs, and about 42,000 year-to-date! That would be the highest number of residential permits in NYC since 1963, when 49,898 units were approved for construction. It's also more than the peak number during real-estate bubble in the 2000s, which peaked at 34,000 units in 2008. Back in the 1920s, though, it was common for 100,000 units to be permitted per year.

Anyway, here are the borough-by-borough numbers:

12-month cumulative permits:
Bronx: 2,753
Brooklyn: 23,326 (WOW!)
Manhattan: 13,499
Queens: 12,330
Richmond: 645

YTD cumulative permits:
Bronx: 1,830
Brooklyn: 19,027
Manhattan: 10,914
Queens: 9,964
Richmond: 263

Source: Numbers compiled from http://censtats.census.gov/bldg/bldgprmt.shtml?

Last edited by Hamilton; Jul 27, 2015 at 11:20 PM.
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  #2  
Old Posted Jul 27, 2015, 11:13 PM
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For historical context, you can refer to page 5 of the 2015 Housing Supply Report , which lists the number of housing units permitted and granted certificates of occupancy every year since the 1960s:

http://www.nycrgb.org/downloads/rese...orts/15HSR.pdf
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  #3  
Old Posted Jul 28, 2015, 12:11 AM
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As De Blasio's plan kicks into high gear, places like the Bronx will see much higher unit numbers. Also Queens.

Even with all of these units, the supply is not enough. I'm hoping 2015 beats 2014. 5 more months can bring a lot of surprises.
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Old Posted Jul 28, 2015, 12:40 AM
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So I'm assuming when it says Richmond, it's talking about Port Richmond and Staten Island?
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  #5  
Old Posted Jul 28, 2015, 1:09 AM
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Richmond County = Staten Island.
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  #6  
Old Posted Jul 28, 2015, 3:05 AM
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Something is a little off with those numbers. I checked out SF County, Cook County and Kings County and the 5+ unit permits has an average per unit value of more than $300k for SF, $180K for Cook and $120k for Kings.

I can believe the construction costs for SF and Cook, but not for Brooklyn.
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  #7  
Old Posted Jul 28, 2015, 5:12 AM
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Maybe they're not counting the same thing. For example they're phasing their permits (foundations, structure, remainder for example) and only counting one phase. Maybe some cities don't require anything remotely realistic for permitting. Lots of reasons that might not be accurate. In my own city, I've looked up values in the permit records and sometimes the numbers are just bizarrely off.

The 50,000 figure is good, and New York keeps getting better. But that's not very high in percentage terms. Of course a big number would be tough in a city without a lot of easy sites.
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  #8  
Old Posted Jul 28, 2015, 5:20 AM
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Good news for NYC!
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  #9  
Old Posted Jul 28, 2015, 7:42 AM
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Congratulations!
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  #10  
Old Posted Jul 28, 2015, 3:15 PM
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Is it artificial?

I am now afraid that the uptick may have been largely driven by the expiration of the old 421a tax abatement program. In order to qualify under the old 421a rules, the developer had to get permits and begin "substantial work" on a project by June 15.

There's some reason to believe the boom is real, though. 421a also expired in June 2008, leading to a similar spike in permits. However, even then, at the height of the real estate boom, only 27,000 units were approved in the 6 months preceding the 421a expiration. This time, 42,000 units were approved in the 6 months preceding the expiration.

Next month's permit numbers will probably give us a better idea of how much of this permit boom is just financial/legal shenanigans.

Here's a WSJ article from last month explaining how developers were rushing to get the tax beaks. It includes a chart of permit figures through May:
Quote:
As Tax Break Sunsets, Developers Rush In
Threatened expiration of New York’s 421-a program spurred biggest surge in building permits since 2008

By JOSH BARBANEL
June 25, 2015 8:39 p.m. ET

Mayor Bill de Blasio may have lost some battles over his affordable-housing agenda in Albany, but the struggle has contributed to a boom in residential construction in New York City.

The threatened expiration of the developers’ property-tax break known as 421-a triggered a rush to beat the deadline, creating the city’s biggest surge in building permits in seven years, according to data compiled by the U.S. Census Bureau.

“You are seeing a lot of good come out of it,” said Gene Kaufman, an architect [NOTE: The worst "architect" in NYC], of the rush by developers to meet the deadline. Mr. Kaufman said he shepherded three projects through the city’s Department of Buildings in time to meet the deadline. He said city developers had purchased land on the assumption that they would qualify for the tax program, and needed it to make their financial projections work.

The tax abatement expired on June 15, but the state Legislature was expected to renew it for four years with only limited changes. It was designed to spur housing development, but opponents say it costs too much—more than $1 billion a year in lost tax revenue. To qualify under the old rules, developers were required to have approved building plans and to have begun at least some construction on the project before the deadline. Permits for 5,546 apartments and houses were filed in April, the most for any month in at least four years. In May, permit activity rose further: New census data show an additional 12,555 permits were approved by the buildings department. The permits for residential units approved in those two months exceeded the total for all of 2013. ]In the first five months of 2015, more permits were issued than in any full year since 2008, when 33,170 permits were issued during the final months of the real-estate boom before the financial crisis.
[/B]

Stephen G. Kliegerman, president of Halstead Property Development Marketing, said while the market has been strong there was no other change in industry fundamentals to explain the uptick. “It is mostly a rush for the 421-a deadline,” he said. He said many last-minute projects were in traditionally weaker housing markets outside Manhattan, where developers who met the rules had been entitled to the abatement without conditions.

In May, Mr. de Blasio proposed requiring rental developers to set aside up to 30% of a building for affordable housing in exchange for a tax abatement, while eliminating benefits for condominiums.



The last time there was a similar surge in building permits was in 2008, just before tightening of rules in a generous version of the 421-a tax abatement was to take effect. In June of that year, when the earlier round of benefits expired, permits were issued for 17,128 residential units, more than half the total for the entire year. More permits were issued that year than in any year since the early 1970s. But after the downturn, many of those projects stalled, and some faced foreclosure. Jamie McShane, a spokesman for the Real Estate Board of New York, an industry group, said the surge in permit activity when 421-a benefits are threatened “proves the importance of the program.”

In April, many of the permits were for residential units in larger projects in Brooklyn and Manhattan. In May, many small projects won permits. Projects in Queens made up 38% of the total, followed by Brooklyn at 37% and Manhattan at 25%. Buildings-department data show that at least 25 projects were scheduled to start work under new building permits on June 15, the day the old 421-a program expired.
http://therealdeal.com/blog/2015/06/...ction-permits/

Last edited by Hamilton; Jul 28, 2015 at 3:35 PM.
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  #11  
Old Posted Jul 28, 2015, 3:17 PM
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People have to go somewhere. The city is on a roll. I always say we haven't seen the best New York yet.
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  #12  
Old Posted Jul 28, 2015, 7:04 PM
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How does the city have space for all of these new units? Regardless, it's impressive. Atlanta currently only has about 21k or so units under construction or proposed at this moment and it has a lot more space to build than NYC.
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  #13  
Old Posted Jul 28, 2015, 8:33 PM
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^Just guessing here, but it's not usually a matter of space and more a matter of citizens' attitude to new development, and therefore the ease of adding new housing units.

A city where everyone lives in an apartment and rents is probably much less likely to oppose new apartment developments than a city where most people live in a single family home and own.
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  #14  
Old Posted Jul 28, 2015, 8:35 PM
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Quote:
Originally Posted by Ant131531 View Post
How does the city have space for all of these new units? Regardless, it's impressive. Atlanta currently only has about 21k or so units under construction or proposed at this moment and it has a lot more space to build than NYC.
Many of these units are in the outer boroughs, and what happens is 3-4 story structures get bought, and develop many times their size. 1000's of units as it starts to add up. Problem is documenting all of them, but they are out there. A ride around town, just off the beaten track can reveal much contruction. Skyscrapers are one thing, but a lot of NYC construction depending on the borough is usually an average of 6-9 floors. Although the amount of high rises in the pipeline is staggering.

Places like the Bronx will be hotbeds the next couple of years. Also, and be prepared, but Staten Island. It will increase in its units.... just watch and see.

At 302 sq-miles, plenty to build and redevelop.
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Old Posted Jul 28, 2015, 8:43 PM
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^^^Seconded. I'm pro-development, but in my neighborhood (Sunset Park, Brooklyn) the development is taking the form of very hideous, tacky, cheaply-built 6-story buildings replacing rows of leafy 1890s 2-story row houses. This sort of block-busting really took off in the past 12 months, especially on the eastern, more Chinese edge of the neighborhood. Oh well. I wish they would expand these houses rather than destroying them.

As for the very largest developments, a lot of them are taking place on land rezoned from industrial to residential (e.g., Domino, Hallets Point, Murray Hill ConEd site, Greenpoint Landing, Hunters Point South, etc) or reclaimed from railroad tracks (Atlantic Yards, Hudson Yards.
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  #16  
Old Posted Jul 28, 2015, 8:50 PM
Hamilton Hamilton is offline
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Quote:
Originally Posted by hipster duck View Post
^Just guessing here, but it's not usually a matter of space and more a matter of citizens' attitude to new development, and therefore the ease of adding new housing units.

A city where everyone lives in an apartment and rents is probably much less likely to oppose new apartment developments than a city where most people live in a single family home and own.

You would think so, but NYC is almost as NIMBY as your typical suburban bedroom community. That's why NYC actually lags cities like Houston, Phoenix, even Seattle and DC in terms of new building permits per unit of existing population. Given the atronomical levels of demand for housing in this city, we should probably be building 3 times as many new units.

http://www.yimbynews.com/2015/03/com...as-cities.html

http://www.yimbynews.com/2014/08/new...-big-city.html


Last edited by Hamilton; Jul 28, 2015 at 9:01 PM.
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  #17  
Old Posted Jul 28, 2015, 8:54 PM
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Quote:
Originally Posted by Hamilton View Post
You would think so, but NYC is almost as NIMBY as your typical suburban bedroom community. That's why NYC actually lags cities like Houston, Phoenix, even Seattle and DC in terms of new building permits per unit of existing population. Given the atronomical levels of demand for housing in this city, we should probably be building 3 times as many new units.

http://www.yimbynews.com/2015/03/com...as-cities.html

http://www.yimbynews.com/2014/08/new...-big-city.html
OK, Seattle and DC are fair comparisons, but not Houston and Phoenix because those two cities - especially Phoenix - basically just annex unincorporated land and build out.
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  #18  
Old Posted Jul 28, 2015, 8:59 PM
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80,000 units should be the aim. Places like Hong Kong and London are seeing those figures. Even in terms of affordable housing, the numbers are way behind other Alpha + and - cities.
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  #19  
Old Posted Jul 29, 2015, 12:50 AM
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Originally Posted by chris08876 View Post
80,000 units should be the aim. Places like Hong Kong and London are seeing those figures. Even in terms of affordable housing, the numbers are way behind other Alpha + and - cities.
While the criticism may be valid, keep in mind that London is double the size of NYC in land area...

The Seattle and DC per capita construction comparisons are silly, those are very small cities compared to NYC, the size of just several NYC neighborhoods population wise.
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  #20  
Old Posted Jul 29, 2015, 3:11 AM
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Originally Posted by chris08876 View Post
80,000 units should be the aim. Places like Hong Kong and London are seeing those figures. Even in terms of affordable housing, the numbers are way behind other Alpha + and - cities.
Agreed, but I would push it higher -- 100,000 or 120,000 units (as were being permitted in the 1920s). New York housing prices are astronomical in part because supply is so limited relative to demand.
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