Building permits in Manhattan have increased 169% in the first four months of 2012, according to the New York City buildings department. So far, 35 new permits have been issued for construction of hotels, apartment buildings, an “affordable housing” development and an art gallery. This is 13 more than in the first four months of 2011.
While still below 2008 levels, when 42 permits issued in the first four months, this increase seems to reflect a growing confidence by developers in certain sectors, especially rental housing and hotels. Some developers getting permits this year have even been able to obtain financing and have broken ground. These include a new condominium project on 79th Street by the Brodsky Organization, and two new hotels in Hudson Square being built by Barone Management.
Hudson Yards appears to be the most popular location for construction and development, with six building permits being issued on the far West Side in the 20s and 30s. The new activity could be the result of the opening of the second phase of the High Line elevated park, the extension of the Number 7 subway line and the planned office development to be located on the former rail yards west of 10th Avenue between 30th and 33rd streets. High end retailer Coach Inc. sees the Hudson Yards development as an important new address in Manhattan and has agreed to be the anchor tenant in a new building starting later this year.
The number of new projects might be surprising coming at a time of economic uncertainty, with the fall presidential elections, the economic turmoil in Europe and the general malaise in the financial services industry. But developers say they are starting to build again because the lack of construction activity over the past three years has created a significant demand for housing. “We feel that the market is very good right now and ripe for new condominium projects,” said Michael Namer, chief executive of Alfa Development. Alfa has broken ground of a 51-unit condominium project on 21st Street between Sixth and Seventh Avenues. Other new condos in the area have had strong sales, including one at 422 W. 20th Street and another new condo building on 23rd Street. Michael Slattery, a senior vice president at the Real Estate Board of New York, a real-estate industry association and lobbying group said “There’s been so little production [on the housing side] that demand is starting to press people to build again.”
Louis Coletti, president of the Building Trades Employers’ Association said that “It’s been a dramatic increase from what has occurred over the last year or two. The private sector is beginning to get out of the doldrums, at a time when city and state agencies don’t have enough money.” Also, the increase in building permits is only an indication of an intention to build, as many banks are still reluctant to finance large construction loans on new projects, and it may months before any of the permitted projects can get the financing to start.
Another indication that development will continue to pick up in Manhattan is that the city has issued a significantly higher number of demolition permits this year, from a low of 35 in 2010 to 74 already this year.
For additional information, and to see a map of the permitted projects, see Laura Kusisto, “Permits Climb as Developers Up Their Bets”, The Wall Street Journal, May 4, 2012.
Leave a Reply
You must be logged in to post a comment.