New York Construction Permits Break 50-Year Record

"New York City is entering what could be the biggest building boom in a generation, census figures show, as work gets under way on hundreds of residential projects in neighborhoods across the city," reports Josh Barbanel.

"In the first six months of the year, developers received new residential building permits for 42,088 apartments and houses in the city, according to the U.S. Census Bureau, already more than in any full year since 1963, when nearly 50,000 permits were issued," adds Barbanel.

Barbanel credits the surge in construction permits to a financial incentive in the form of an expiring tax break: "The surge in permits this year followed a rush by developers to start foundation work on many residential projects by June 15, in time to qualify for a valuable property-tax abatement that was scheduled to expire."

The article goes on to provide more details about the 421-a tax abatement program that led to the surge in construction. Barbanel also notes a cautionary tale to be invoked by the mention of the program: "In June of [2008], when permits also surged, benefits of an earlier version of the 421-a tax abatement were expiring. Developers rushed to begin construction, even before obtaining financing. When the financial crisis hit that fall, many projects simply stopped."