According to a report by the New York Building Congress (NYBC), residential construction spending in New York City is expected to see a slight increase in 2023, despite a decline in new building permits. The NYBC predicts that approximately $26.4 billion will be spent on residential construction, with renovations, rehabilitations, and conversions being the primary areas of focus.
Ground-up apartment buildings and homes make up only 23% of current residential projects under construction this year. The remaining 49% consists of renovations and additions. This shift can be attributed to factors such as the expiration of the 421a tax exemption and higher interest rates.
To combat this decline in development activity, NYBC recommends supporting transit-oriented development initiatives and rolling back city-specific caps on new floor area for residential projects. On the other hand, nonresidential project spending is expected to rise significantly next year at an estimated rate of 42%. Additionally, government-funded projects are set to reach $22 billion with allocations for schools infrastructure improvements , city office buildings , transit systems upgrades ,and road developments .
The article “NY Resi Construction Spending To Hit $26B” was originally published by Connect CRE .
