Economic Research & Analysis

May 2015 Economic Snapshot

Inside this Volume

Private employment in New York City fell by 1,100 between March and April 2015.
The unemployment rate fell to 6.5% between March and April 2015.
The Manhattan Class A office vacancy rate was 8.6% in April 2015, while the average asking rent was $76 PSF.
Hotel occupancy was 87.3% in March 2015, up from 85.5% in March 2014.
Passengers in New York City area airports totaled 7.9 million in February 2015, up 8.8% from February 2014.

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#61 Housing and Residential Construction in New York City

This month's economic snapshot looks at Housing and Residential Construction in New York City.

Employment

  • Private sector jobs in New York City fell by 1,100 in April 2015 after a gain of 6,900 jobs in March 2015.
  • Government jobs in the city rose by 700, resulting in a net overall decrease of 400 total private and public sector jobs in April.
  • Since April 2014, private sector employment has risen by 93,900 jobs or 2.7%.
  • New York City’s unemployment rate was 6.5% in April 2015, down from 6.6% one month prior.

Housing and Residential Construction in New York City

  • On the first anniversary of Mayor de Blasio’s Housing New York plan, this month’s Economic Snapshot looks at housing and residential construction in New York City using preliminary data from the 2014 New York City Housing And Vacancy Survey (NYCHVS).
  • According to the 2014 NYCHVS, 30% of housing units are located in Brooklyn, 25% in both Manhattan and Queens, 15% in the Bronx, and 5% in Staten Island. Of those, 64% were rental units.

  • Rents in New York City are rising modestly. Between 2006 and 2013, the median rent in the city rose from $1,098 to $1,228 (adjusted for inflation), an average annual increase of 1.7%. The percent of renters paying less than $1,000 per month went from 57% of all renters to 35% over the same period.1 
  • The rent-to-income ratio increased from 32% to 36% for New Yorkers in rent-controlled apartments between 2011 and 2014, but remained constant at 33.8% for all households.

  • Vacancy rates for all rental units rose from 3.12% in 2011 to 3.45% in 2014. Vacancy levels rose for every rent level except units priced between $1,000 and $1,999 over this period. In general, vacancy rates rise with price. Vacancy rates in 2014 were lowest for apartments priced less than $800 (1.80%) and highest for units priced over $2,500 (7.32%).
  • More than half of New York City residents spend over 30% of their income on rent, a figure that has remained consistent over the last 10 years. 30% of households pay 50% or more of their income in rent , a figure that remained unchanged since 2011.

  • The New York City residential construction market was hit hard by the Great Recession, dropping from a pre-recession peak of 3,668 residential construction projects and 32,173 dwelling units in 2008 to 2,213 residential projects and just 10,810 units in 2010. The market has since recovered to almost pre-crisis levels with 3,185 residential construction projects and 25,726 units built in 2014. The Bronx witnessed the fastest growth in housing units, adding 1.24% units between 2009 and 2014, relative to 0.82% for the city overall.
  • Housing units have not kept pace with population growth in New York City. The population grew 4.4% between 2009 and 2014, for example, while the number of housing units increased just 2.0% over the period.

1 American Community Survey 1-year estimates, 2005-2013 
2 New York City Housing And Vacancy Survey 2014

Real Estate and Construction

Manhattan Office Market

  • In April 2015, the Manhattan Class A direct vacancy rate fell to 8.6% from 8.8% one-month prior, while the average rental rate held steady at $76 PSF. 
  • Direct vacancy rates fell to 8.1% for Midtown and to 3.9% for Midtown South Class A office space. Direct rental rates for these two submarkets went unchanged between March and April 2015.
  • The Midtown Class A sublease rental rate fell to $65 PSF in April 2015—down from $70 PSF one-month prior.

Construction

For the twelve months ending April 2015:

  • Building projects (including new, additions, and alterations) that started construction in NYC fell by 6.0% while infrastructure (non-building) project starts were up 7.6% from the twelve months ending April 2014.
  • Planned space for building project starts rose by 27.7% from the same period in 2014. The value associated with these projects was up 55.4% over the period.
  • 2,967 residential building projects began construction, a 3.3% decrease from the twelve months ending in April 2014. These starts contained 29,646 units, an increase of 19.2% from last year.

Transit, Travel, and Tourism

Transit Ridership

  • Total ridership on MTA subways, trains, and buses in March 2015 was 236.2 million, an increase of 1.6% from March 2014.
  • Subway ridership in March 2015 was 153.0 million, up 3.1% from March 2014.

Source: Metropolitan Transportation Authority

Air Traffic

  • In February 2015, 7.9 million passengers flew into and out of the region's airports, an increase of 8.8% from February 2014.
  • Domestic air carriers accounted for 5.3 million passengers, a 10.6% increase from February 2014.
  • 2.6 million passengers traveled with international air carriers in February 2015, a 5.3% increase from February 2014.

Source: Port Authority of New York and New Jersey

Broadway Ticket Sales

  • Total Broadway attendance was approximately 1,149,800 during the four weeks ending April 26, 2015, down 4.4% from the same period last year.
  • Broadway revenues during this period were about $112.6 million, down 8.1% 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 March 2015, the average daily hotel room rate was $252, a 1.1% decrease from March 2014. 
  • Hotel occupancy was 87.3% in March 2015, up from 85.5% in March 2014. 
  • The average daily hotel room rate decreased the most in hotels charging over $500 per night.

Source: PKF Consulting