New York City construction starts vaulted to $26.1 billion in 2014, a 31 percent increase from 2013, easily marking the best year for new projects since the 2008 recession.
Fueled by luxury high-rise developments, housing starts rose a whopping 73 percent year-over-year, from $6.9 billion in 2013 to $11.9 billion in 2014, according to a New York Building Congress report released today. Last year’s residential construction starts were 350 percent higher than 2010’s post-crisis low of $2.6 billion.
The analysis, using construction data from Dodge Data & Analytics, encompasses all project starts between 2009 and 2014, including new construction as well as conversions and renovations of existing buildings. The figures show the total estimated value of each commenced project through the entire construction phase.
Last year, new apartment buildings were eight of the top ten projects by construction costs, according to the report. Fifteen residential projects cost at least $175 million in construction expenses, for a combined construction value of $5.8 billion — that’s 58 percent of all new, ground-up housing projects in 2014.
“The fact that eight of the top ten projects by value are multi-family apartment buildings is nothing short of amazing, especially when you consider the strength of the overall market,” Building Congress President Richard T. Anderson said in a statement. “Even in 2012 and 2013, which were strong years for residential, just four of the top ten were residential projects.”
Don’t expect a surfeit of new apartments in the market anytime soon; although the value of new residential projects jumped by 73 percent, the total new square footage added by those projects increased by just 17 percent. This is partially a function of ballooning construction costs, the report notes, but also a result of developers erecting luxury projects that are more expensive to build.
New, ground-up construction was 87 percent of residential starts, while renovations and alterations of existing buildings made up 13 percent.
The most expensive construction project that broke ground in 2014 was 53W53, the Jean Nouvel-designed hotel and residential tower adjacent to MoMA. NYU Langone’s Kimmel Center and New York-Presbyterian’s David Koch Center — both in the healthcare sector — took the No. 2 and 3 spots. Extell Development’s Nordstrom Tower on West 57th Street seized the fourth spot.
The non-residential sector, which includes offices, hotels, schools, hospitals, transit stations, power plants and other institutional buildings, had a modest comeback; construction starts climbed 26 percent, from $8.3 billion in 2013 to $10.5 billion in 2014. This reversed a three-year streak of declines in non-residential starts. Commercial buildings represented $5 billion in new projects, while institutional structures accounted for $4.8 billion.
“We are not even two full months into the New Year, and already we have seen the resumption of full-scale construction at 3 World Trade Center and the start of 55 Hudson Yards,” Anderson said. “With the addition of 30 Hudson Yards, which is expected to begin later this year, we are looking at nearly 6.5 million square feet of new office space in those three projects alone.”
Public works projects accounted for $3.7 billion in starts in 2014, a 21 percent year-over-year decrease. However, 2013’s $4.7 billion figure was boosted by the start of three huge bridge renovation projects — the Goethals, Bayonne and Verrazano.