According to data released by the New York Building Congress (NYBC), there were more new residential building permits issued in New York City in the first quarter of 2017 than any other quarter in the past decade.
The report released on Thursday, May 11 showed that the New York City Department of Buildings approved 6,343 construction permits for apartments in the city, almost three times as many as they did in the first three months of 2016. According to construction trade group reports, this was the best first quarter for construction since 2007 when 7,264 construction permits were issued following a construction boom.
The recent increase in permits occurred while legislators were working out the details of the 421a tax break program recently resurrected as “Affordable New York”, a program that provides developers with a tax break when they include affordable housing in their projects. The NYBC stated that this spike in permits is tied to increased confidence in rental development, something that heavily relies on this tax break, but a number of the recently approved buildings first entered the development pipeline as much as two years ago.
2016, with 16,269 units, saw the lowest total of authorizations since 2012 when the Recession had a chokehold on new developments with only 10,599 units. 2015 saw a massive spike in permit filings when the Department of Buildings approved construction starts for 56,183 units across the city.
“The numbers seem to confirm that the drop in 2016 was largely the market taking a breather after the surge in applications prior to the expiration of 421-a,” NYBC President Carlo Scissura said in prepared remarks. “We now seem to be in a period of renewed vigor and investor confidence given the relative strength of the overall economy and the recent agreement on Affordable New York, the successor program to 421a.”