Economic Research & Analysis

August 2015 Economic Snapshot

Highlights

Private employment in New York City rose by 9,700 between June and July 2015.
The unemployment rate fell to 5.7% between June and July 2015.
The Manhattan Class A office vacancy rate was 8.4% in July 2015, while the average asking rent was $76 PSF.
Hotel occupancy was 93.0% in June 2015, up from 92.3% in June 2014.
Passengers in New York City area airports totaled 10.8 million in May 2015, up 5.1% from May 2014.

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#64 Ferry Transit in New York City

This month's podcast explores Ferry Transit in New York City.

Employment

  • Private sector jobs in New York City rose by 9,700 in July 2015 after a gain of 23,100 jobs in June 2015.
  • Government jobs in the city rose by 600, resulting in a net overall increase of 10,300 jobs between June and July 2015.
  • Since July 2014, private sector employment has risen by 107,800 jobs or 3.0%.
  • New York City’s unemployment rate was 5.7% in July 2015, down from 6.1% one month prior. This 0.4 percentage point drop in the unemployment rate constitutes the largest month-to-month decline on record.

Ferry Transit in New York City

  • Though ferry crossings along the East River date back to the 1630s, Robert Fulton introduced the first regularly scheduled service between Brooklyn and Manhattan in 1814. By 1870, the ferry system was handling 50 million passengers per year.1 The completion of the Brooklyn Bridge in 1883, however, and subsequent construction of other bridges and subway lines eroded ferry traffic. The Fulton Ferry ceased operations in 1924. Manhattan-bound ferry service returned to the Fulton Ferry Landing in 2006.

  • One reason for the recent revival of ferries in NYC is redevelopment along the waterfront. Another is the relatively low cost of infrastructure. The East River Ferry’s (ERF) capital costs ran an estimated $8 million per mile served,2 whereas the extension of the 2nd Ave subway line is costing the City upwards of $2 billion/mile. Though the latter is expected to serve 200,000 riders per day3 —about 60X the average number of weekday riders aboard the ERF—it is costing the City 250X as much to construct.
  • The Staten Island Ferry carried 22 million passengers in 2014, up 6.8% over the previous year,4 while NY Waterways, which serves the East and Hudson Rivers, had over 8.5 million passengers last year. All told, NYC’s ferry operators transported some 32 million passengers in 2014. The five new routes scheduled to open in 2017/2018 as part of the Citywide Ferry Service are expected to raise that figure to more than 36 million once fully operational. While constituting a mere 0.5% of total commuters in NYC (see Fig I), the city’s waterways handled more passengers than LaGuardia in 2014 (27 million).5

  • A 2013 Citywide Ferry Study comparing development near ferry landings found a positive and statistically significant link between ferry service and new construction. The impacts were largest among residential developments, where the study attributes the construction of nearly 350 additional residential units and 487,238 residential square feet to their proximity to the ERF.6
  • Men make up the dominant share (59.7%) of ferry riders commuting to NYC for work (see Fig II). They also account for a disproportionate share of bicycle (77.2%) , automobile (60.9%), train (60.3%), and taxi/motorcycle/other (58.6%) commuters. Women, on the other hand, are overrepresented amongst bus riders (57.2%) and walkers (50.4%) relative to their proportion of the NYC workforce overall (46.6%).

Average Weekday Ridership in NYC

  • ERF ridership is more sensitive to weather conditions than Staten Island Ferry ridership (see Fig III), though such sensitivity has been shown to be greater among weekend users of the ERF than among weekday users, suggesting that a sufficient share of commuters rely on the service to get to work. Subway and bus ridership in NYC are also seasonal, with dips in the average number of weekday riders occurring in both the winter and summer months.

1 Kenneth T. Jackson, Lisa Keller, Nancy Flood, The Encyclopedia of New York City: Second Edition, Yale University Press, Dec. 1, 2010
2 NYCEDC, Ferry Policy & Planning in New York City
3 J. De Avila, “New Subway Line is Chugging Along,” WSJ, May 21, 2015 
4 American Public Transportation Association, Q4 2014 Ridership Report
5 PANYNJ, 2014 Air Traffic Report
6 NYCEDC, Citywide Ferry Study 2013
7 This gender gap is consistent with the Rudin Center’s study of Citi Bike usage, in which 77.7% of rides were found to have been taken by men.

Real Estate and Construction

Real Estate

  • In July 2015, the Manhattan Class A direct vacancy rate rose to 8.4% from 8.3% one month prior, while the average rental rate fell from $77 to $76 PSF.
  • Direct vacancy rates rose by 0.1 percentage points in Midtown and Downtown, but were down 0.3 percentage points in Midtown South. Direct rental rates in Midtown and Downtown were both down $1 PSF over the period, while Midtown South held steady at $79 PSF.
  • The Manhattan sublease vacancy rate rose to 1.6% in July 2015, with the corresponding rental rate rising to $65 PSF.

Construction

For the 12 months ending July 2015:

  • The number of building projects (including new, additions, and alterations) that started construction in New York City was up 1.6% relative to the twelve month period ending July 2014. Planned space for such projects was 87.0% higher than the same period in 2014, suggesting that building projects have become larger. The value associated with these projects was up 93.3% over the period.
  • 3,430 residential building projects began construction, a 6.2% increase from the twelve months ending in July 2014. These starts contained 47,150 units, an increase of 81.1% from last year.

Transit, Travel, and Tourism

Transit Ridership

  • Total ridership on MTA subways, trains, and buses in June 2015 was 233.1 million, an increase of 1.4% from June 2014.
  • Subway ridership in June 2015 was 151.9 million, up 2.7% from June 2014.

Source: Metropolitan Transportation Authority

Air Traffic

  • In May 2015, 10.8 million passengers flew into and out of the region's airports, an increase of 5.1% from May 2014.
  • Domestic air carriers accounted for 7.0 million passengers, a 6.3% increase from May 2014.
  • 3.8 million passengers traveled with international air carriers in May 2015, a 3.1% increase from May 2014.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

  • Total Broadway attendance was approximately 1,277,070 during the five weeks ending August 2, 2015, up 2.6% from the same period last year.
  • Broadway revenues during this period were about $137.6 million, up 4.2% 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 June 2015, the average daily hotel room rate was $307, a 1.0% increase from June 2014. 
  • Hotel occupancy was 93.0% in June 2015, up from 92.3% in June 2014. 
  • The average occupancy rate increased the most in hotels charging $245 or less per night.