Economic Research & Analysis

April 2015 Economic Snapshot

Highlights

Private employment in New York City rose by 9,100 between February and March 2015.
The unemployment rate held steady at 6.6% between February and March 2015.
The Manhattan Class A office vacancy rate was 8.8% in March 2015, while the average asking rent was $76 PSF.
Hotel occupancy was 77.4% in February 2015, down from 78.3% in February 2014.
Passengers in New York City area airports totaled 8.4 million in January 2015, up 2.0% from January 2014.

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#60 Energy and the Environment in New York City

This month's economic snapshot looks at Energy and the Environment in New York City.

Employment

  • Private sector jobs in New York City rose by 9,100 in March 2015 after a gain of 3,500 jobs in February 2015.
  • Government jobs in the city fell by 200, resulting in a net overall increase of 8,900 total private and public sector jobs in March.
  • Since March 2014, private sector employment has risen by 104,200 jobs or 3.0%.
  • New York City’s unemployment rate was 6.6% in March 2015, the same as the month prior.

Energy and the Environment in New York City

  • In light of Earth Day on April 22, 2015, this month’s Economic Snapshot highlights New York City’s energy and environmental landscape. As illustrated by Superstorm Sandy, the possibility of climate change has expedited the need for coastal cities like New York City to invest in alternative energy sources, energy efficiency, and resiliency. Roughly 21% of NYCHA (New York City Housing Authority) housing units are located within the 2050 floodplain, and 59% of the city’s power generation capacity will also be susceptible to flooding by 2050.1  With rising sea levels and warming temperatures, NYC is increasingly vulnerable to extreme weather events—at ever-higher costs (see Figure I). Sandy inflicted an estimated $67 billion worth of damage across the eastern seaboard in November 2012, with damages totaling $19 billion in NYC alone.2

  • New York City’s residential energy prices remain higher than most of the country. The average price for residential electricity in NYC was 29.02 cents per kilowatt-hour(kWh) in 2014, according to preliminary estimates by the U.S. Energy Information Administration (EIA). This was nearly 2.4 times greater than the national average of 12.15 cents/kWh (see Figure II).
  • The high price of utilities exacerbates the housing cost burden in New York City, where nearly 30% of renters allocate more than 50% of their household income towards rent each month.3  To help offset some of the effects of rising utility costs, the city has launched a $100 million initiative to retrofit nearly 300 NYCHA developments with new boilers and energy-saving lightbulbs—the largest public housing energy efficiency effort to date. Even though consumption has risen just 9% over the last 10 years, NYCHA’s utility expenses are up 64% over the period, and now cost $567 million per year.4

  • The city continues to make strides towards alternative energy sources. Solar generating capacity, for example, has grown from less than one megawatt (MW) in 2006 to 35.7 MW today.The city hopes to extend solar capacity even further, with plans to develop more than 250 MW of solar energy over the next decade. To help reach this target, 47 acres of land in Staten Island has been set aside for the construction of a solar power facility which will increase the city’s renewable energy capacity by 50%—enough to power 2,000 homes.
  • According to the Solar Energy Industries Association, there are currently more than 500 solar companies operating throughout the state. In NYC, solar installation companies employ roughly 2,740 workers, and have attracted $200 million in investments in the industry.6

  • Due in part to the city’s energy efficiency efforts and the greater availability of alternative energy sources, greenhouse gas emissions have fallen steadily since 2005, most notably among multi-family residential buildings (-30%) and institutional/government buildings (-29%) (see Figure III).

1 “Our Infrastructure is Vulnerable.” Regional Planning Association. April 19, 2014.
2 Sandy Funding Tracker, NYC Office of Recovery.
3 New York City Housing and Vacancy Survey, 2011.
4 “Mayor de Blasio and HUD Secretary Castro Announce Nation’s Largest Energy Savings Program for a Public Housing Authority.” April 9, 2015.
5 NYC Solar Partnership, CUNY. As of October 28th.
6 Ibid.

Real Estate and Construction

Manhattan Office Market

  • In March 2015, the Manhattan Class A direct vacancy rate stayed constant at 8.8% while the average rental rate fell slightly to $76 PSF.
  • Direct vacancy rates fell to 12.0% for Downtown and to 4.1% for Midtown South Class A office space. Direct rental rates for all three Manhattan submarkets went unchanged between February and March 2015.
  • The Midtown Class A sublease rental rate rose to $70 PSF in March 2015—up from $66 PSF one month prior.

Construction

For the twelve months ending March 2015:

  • Building projects (including new, additions, and alterations) that started construction in NYC fell by 5.4% while infrastructure (non-building) project starts were up 5.6% from the twelve months ending March 2014.
  • Planned space for building project starts rose by 17.5% from the same period in 2014. The value associated with these projects was up 41.5% over the period.
  • 2,917 residential building projects began construction, a 3.3% decrease from the twelve months ending in March 2014. These starts contained 27,358 units, an increase of 15.4% from last year.

Transit, Travel, and Tourism

Transit Ridership

  • Total ridership on MTA subways, trains and buses in February 2015 was 199.7 million, an increase of 0.2% from February 2014.
  • Subway ridership in February 2015 was 130.7 million, up 0.7% from February 2014.

Source: Metropolitan Transportation Authority

Air Traffic

  • In January 2015, 8.4 million passengers flew into and out of the region's airports, an increase of 2.0% from January 2014.
  • Domestic air carriers accounted for 5.4 million passengers, a 1.9% increase from January 2014.
  • 3.0 million passengers traveled with international air carriers in January 2015, a 2.1% increase from January 2014.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

  • Total Broadway attendance was approximately 957,500 during the four weeks ending March 29, 2015, down 7.1% from the same period last year.
  • Broadway revenues during this period were about $95.5 million, down 5.8% from last year. 

Note: Gross revenue and attendance figures include all shows playing on Broadway during the specified period.
Source: The Broadway League

Hotel Occupancy

  • In February 2015, the average daily hotel room rate was $222, a 6.8% decrease from February 2014. 
  • Hotel occupancy was 77.4% in February 2015, down from 78.3% in February 2014. 
  • The average daily hotel room rate decreased the most in hotels charging between $300 and $375 per night.