Building permits: 2000 - 2009 | New York Building Congress

STEEP DROP IN BUILDING PERMITS SIGNALS AN END
TO
NEW YORK CITY RESIDENTIAL BUILDING BOOM

Permits Issued for Just 576 Residential Units in Five Boroughs in
January and February;
Three Building Permits for 38 Units Issued for Borough of Manhattan at
Start of 2009

The New York City Department of Buildings issued building permits for 576 residential units in 133 buildings citywide in January and February of 2009, which is a steep decline from the same period in 2007 and 2008. While some of the drop is explained by seasonal factors, regulatory changes and unique financial circumstances, the numbers also signal the end of a virtually unprecedented residential building boom in New York City.

At 576 units, the number of permits issued in January and February of 2009 is just 20 percent of the total reached for the same period in 2008, when permits were issued for 2,878 units in 344 buildings.

Further, the initial 2009 numbers represent just 13 percent of the units that were permitted in January and February of 2007, when permits were issued for 4,476 units in 621 buildings throughout the five boroughs.

The Bronx and Queens were the most active boroughs for residential development to start the year. In Queens, permits were issued for 243 units in 56 buildings, while permits were issued for 153 units in 32 buildings in The Bronx. In Staten Island, where one to two-family homes predominate, 59 units were approved for construction in 28 separate buildings.

By far the steepest
declines in potential
housing starts were
experienced in Manhattan
and Brooklyn. In
January and February,
permits were issued
for 38 units in three
Manhattan buildings,
compared to 1220
units/22 buildings
in 2007 and 272 units/9
buildings in 2008.

In Brooklyn, permits
were issued during
the first two months
of the year for 14
buildings totaling
83 units. That is
substantially down
from 1,309 units
in 99 buildings for
the same period in
2008 and 886 units/156
buildings in the
first two months
of 2007.

These numbers could
represent a significant
geographic shift
in residential construction
given that Manhattan
and Brooklyn ranked
number one and two
in annual residential
building permits
in all but one year
since 2002.

“While
the initial numbers
for 2009 are alarming,
it must be noted
that this is a small
sample size and the
numbers can fluctuate
considerably from
month to month,” said
New York Building
Congress President
Richard T. Anderson. “The
winter months are
not traditionally
the peak months for
new permits, and
we may still be feeling
the effects of last
year’s rush
to accelerate projects
prior to changes
in the 421(a) tax
incentive program.
There also are signs
that the credit squeeze
is loosening, which
could spur increased
development in this
low-interest rate
environment.”

Added Anderson, “But even after taking these factors into account, the numbers do not bode well for the coming years. If the current trend holds, annual construction could fall below 20,000 units for the first time since 2002 – a more than 40 percent drop from last year. In a worst case scenario, we could potentially slip to under 15,000 new units in 2009, which is a level we have not seen since the mid-1990s.”

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