A boom in residential construction is leading the spending surge, but the number of units being built is not keeping pace. Residential spending to increase 60 percent in 2014 to $10.9 billion, but the number of units is only projected to grow 22 percent.
The bulk of the increase is being spent on construction of more expensive, ultra-luxury condominiums buildings in Manhattan.
Developers are routinely paying nearly $900/square-foot to build a luxury tower — more than double what they paid back in 2005.
By 2016, residential spending is forecast to hit $12.4 billion, an increase of almost 80% from 2013 levels.
“New York City is producing more than 20,000 housing units annually, which is the benchmark that the Building Congress believes is necessary to accommodate household growth, replace antiquated buildings, and maintain adequate housing options for New Yorkers of all income levels,” according to Thomas Scarangello, Chairman of the New York Building Congress.
“What is concerning, however, is that the current level of production is falling far short of the more than 30,000 units that were constructed annually between 2005 and 2008. It is good news that we getting this volume of work, but we are not providing the housing we need for moderate-income New Yorkers," said Richard Anderson, president of the congress. "This is a real issue."
This year, spending on office buildings, hotels and sports stadiums is forecasted to drop from $8 billion to $7.4 billion, due to the completion of Barclays Center. Next year, however, construction at Hudson Yards and at The World Trade Center complex is expected to push non-residential spending to $10.3 billion.
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| Click to enlarge. Credit: New York Building Congress |
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