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End of an era? Construction permits declined in 2018

End of an era? Construction permits declined in 2018

Construction activity declined in 2018 for the first time in nearly a decade, officials announced Tuesday. The drop could signal the end of a historic run that transformed the skyline and altered entire neighborhoods—even as the city struggled with an increasingly acute housing shortage.

Contractors and developers filed for nearly 166,000 permits last year, according to the Department of Buildings. While that is only a slight dip from a record-setting 2017, it was the first decline since 2009.

“While construction activity remains strong, the building boom may have finally hit its peak,” Rick Chandler, the department’s commissioner, said in a statement announcing the numbers.

Nearly half of last year’s activity occurred in Manhattan, which sprouted some of the most high-profile projects of the boom.

Developers completed 1 World Trade Center, raised the first portion of Hudson Yards and built super-tall luxury condo towers such as One 57 and 432 Park that polarized the city’s residents.

Brooklyn notched the most new building permits last year, with 414. New construction there was especially concentrated along the L train corridor in Williamsburg and other areas that have seen a tremendous amount of development over the past decade. In fact, since 2004 Brooklyn and Queens have far outpaced the rest of the five boroughs in new building permits. And some neighborhoods such as Long Island City and Downtown Brooklyn have been transformed by a spurt of new apartment towers.


The greatest year-to-year increase in total number of permits issued occurred from 2003 to 2004 where New Building permits increased by 20% and Demolitions increased by 27%. This upward surge continued through 2005, but was followed by a six year period of decline. However, since 2013, New Building and Demolition permits have again steadily increased. While in 2018 there was a slight decrease in New Building and Demolition permits since the previous year, there has been a 44% increase in these type of permits since 2013.

Construction employment declined from a peak in 2017, dropping by 500 workers to 45,500 last year, according to estimates from the U.S. Department of Labor.

However, Carlo Scissura, head of the New York Building Congress, a trade group, dismissed the dip as insignificant and said the industry will be busy for years to come with big projects such as Amazon’s headquarters in Queens, JPMorgan Chase’s office tower on Park Avenue and the skyscraper Harry Macklowe is planning in Midtown. The Port Authority of New York and New Jersey and the Metropolitan Transportation Authority also will be undertaking major initiatives.

“The work planned in the next couple of years is astonishing, and let’s not forget about [John F. Kennedy International Airport] and all the infrastructure projects from the Port [Authority] and MTA,” he said. “To me, this [decline] is a non-issue.”

The organization, which advocates for the industry, predicted in October that spending on construction would increase to a record $61.8 billion in 2018 before falling back to $56.4 billion in 2020.

Even with all of the construction activity over the last decade, demand for housing still far outpaced supply, putting tremendous financial pressure on the city’s low-income, working-class and middle-class households. The adult population of the city grew by 11% between 2000 and 2016, according to a report released last year by the NYU Furman Center, while the supply of housing grew by only 8%.

Source: crainsnewyork.com

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