NYC construction pipeline continues to peak in Q1 of this year

The city’s construction market shows signs of recovery with a growing volume of new building filings in the first three months of 2022. The size of new construction projects decreased from the previous quarter but still exceeded historical numbers. 

New buildings filings totaled 689 in the first quarter of 2022, up nearly 70 percent year-over-year, according to the quarterly construction pipeline report released by REBNY. A similar volume of new construction was last seen in Q4 of 2014. 

“We always knew that the only way New York could fully recover from the economic devastation of the pandemic was to ensure that new building and construction was made a number one priority, and this latest report is more evidence that investment in public works and development projects must remain paramount,” Gary LaBarbera, President of the Building and Construction Trades Council of Greater New York, said in the press release.

The recent increase in new building filings can be attributed to the likely-to-expire 421-a tax exemption. The program allows building owners to pay lower property taxes in exchange for including affordable housing units in their projects. The 421-a tax break is set to expire on June 15. 

The proposed construction square footage reached 23.27 million square feet in Q1 of this year, increasing 333 percent year-over-year. However, it declined 26 percent from the more successful previous quarter. REBNY suggests that this decline comes from 10 fewer filings for very large projects. 

Brooklyn accounted for the largest number of job filings for new residential buildings compared to the other boroughs. It also led the market for proposed new multifamily units. Meanwhile, Queens saw nearly 2,000 more dwelling unit filings, making it the second borough after Brooklyn with the highest number of new multiple dwelling units proposed. 

Resources:

“New REBNY Report Shows Continued Economic Progress in Q1 2022 With a Nearly 70% Increase in New Buildings Filings Year-Over-Year,” (REBNY, 2022)

“Q1 2022: New Building Construction Pipeline Report,” (REBNY, 2022)

“Construction pipeline off to a booming start in 2022,” by Eddie Small (Crain’s New York, 2022)