- New York City saw more 12,800 units open in the first half of this year, with another 31,000 expected to open by 2020, according to an analysis from Localize.city.
- Nearly 60 percent of the new units are opening in the top 10 neighborhoods; more than a quarter are in just three neighborhoods: Long Island City, Williamsburg and Bushwick.
Construction cranes continue to dot the skyline across the five boroughs. But more than half of the new units expected to open by 2020 are concentrated in just 10 neighborhoods. All but one (the Lower East Side) are in Queens or Brooklyn.
The analysis from Localize.city, a real estate knowledge platform that creates dozens of insights for every address in New York City, also examines the implications new construction has on residents in these neighborhoods as well as those eyeing potential moves to these areas.
“Too often, people don’t know about planned projects, nor can they easily understand the implications of how those projects might affect their quality of life,” Localize.city President Steve Kalifowitz said.
“For house hunters actively contemplating their biggest financial decision, the impact of nearby development rarely factors into the equation because until now it has been impossible to foresee. Buyers and renters sometimes make decisions they later regret because they didn’t know what was coming: noise, poor air quality, fewer parking spots (in the short term), or a changed neighborhood character further down the road,” he continued. “On the flip side, you might be able to find better deals when there’s a glut of new units because of increased competition.”
In all, New York is expected to get 31,000 new units by 2020. This wave continues to build upon the flurry of new construction the city has seen since 2016. Since then, nearly 60,000 new rental and condo units have been added to the market, Localize.city found.
“Altogether, more than 90,000 units have been built and are projected between 2016 to 2020,” said Localize.city data scientist Israel Schwartz. “That is almost double what New York saw during the previous four years, when roughly 50,800 units were completed.”
These new buildings that are adding 90,000 units could potentially house more than entire population of Baton Rouge.
Top Neighborhoods for New Units
Although Long Island City ranked first, the recent pace of new construction there has remained fairly stable. Of the top 10, LIC is expected to see the least amount of growth of new units from the first half of this year through 2020, at just 11 percent.
Greenpoint is expected to see the biggest burst of new units by 2020, jumping from fewer than 70 units in the first half of this year to more than 2,600 percent thanks to the highly anticipated opening of parts of the Greenpoint Landing megaproject. Flatbush, which saw about 100 units open in the first half of the year, is also expected to soon see a surge of new units hitting the market, jumping nearly 1,250 percent. Williamsburg and Astoria are also expected to see large numbers of new units. Both neighborhoods are expected to see the number of units opening in the next year and a half jump by 800 percent compared to the first half of 2018.
This report draws upon the machine learning algorithms that power Localize.city. The data science team analyzed tens of thousands of current permit applications through July 1, 2018 for buildings with at least four units. Localize.city’s algorithms predict when new units will finish based on the distribution of delays between various phases in a project’s life. As many neighborhoods in New York dramatically transform, Localize.city looks at what the changes mean for the specific buildings nearby, allowing people to check the website for information about new construction, among other topics.
New construction could mean different things in different neighborhoods. In the immediate future, it could bring noise, dust and congestion to an area. In the longer term, new towers might block precious views. The character of the neighborhood also transforms, both in terms of architecture and the demographics of residents and businesses. And while transit, schools and parks might become more crowded, some areas might see new modes of transit added, schools expanded or parks renovated.
Strain on City Services and Infrastructure… But New Services Are Also Coming
It’s likely no surprise that Long Island City continues to see a wave of new apartments hitting the market. Roughly 3,000 units were completed in the first half of 2018, and another 3,300 units are expected to hit the market between now and 2020. Is the area ready? Three new schools are being built there, for example, but they may still not meet the increased demands as more families move in, according Localize.city.
Williamsburg, Greenpoint and Bushwick are expected to see nearly 8,000 new units — potentially bringing more than 20,000 additional residents — until 2020. This influx will occur at the same time the area’s transit is expected to be severely hindered by the L train shutting down between Brooklyn and Manhattan for 15 months.
And tensions between longtime residents and newcomers remain an issue in many of these neighborhoods, like Flatbush, where buildings are quickly replacing houses. The Lower East Side is expected to see an influx of new residents at the massive Essex Crossing and One Manhattan Square, the skyscraper along the East River near the Manhattan Bridge. The neighborhood is also getting ferry stop this summer at Corlears Hook and two new waterfront parks. At the same time, housing advocates are concerned the area is losing much of its affordable housing, and the area’s character, long the domain of mom & pops, is shifting, as a Trader Joe’s and Target move in.
What’s Driving the Boom?
Much of the construction now underway can be traced back to the rush of developers angling to file permits in 2015, before the state’s 421-a tax abatement expired in January 2016. After the flurry of permits were filed, the number of units under construction peaked at the start of 2016 to nearly 94,000 units.
The number of units now under construction is now waning. As these projects wrap up, however, the number of units that are hitting the market is still on the upswing.
“By the end of the first half of 2018, the number of units under construction dipped 17 percent to 78,000 units,” Schwartz said. “Meanwhile, the number of units issued temporary certificates of occupancy has risen to 5,900 units per quarter since 2016. That’s about 85 percent more than the average rate during 2012 to 2015. The average rate during that time span was 3,200.”
The Localize.city data science team aggregated, decoded and analyzed tens of thousands of building applications for residential buildings with four or more units residential from the NYC Department of Buildings’ database from 2008 to July 1, 2018.
Applications included were for new buildings, addition of units, or a change of occupancy to residential. Prediction of future units was determined by developing a predictive model that specifies the probability distributions of the delays between the various phases in a project’s life (beginning with the early stage of pre-filing), as well as the probability that a project might not conclude successfully. The buildings expected to be completed during 2018-19 have been under construction more than two years.
The model will be re-evaluated and adapted in the future in response to evolving challenges and pressures in the development process, which could change typical construction timelines.
Learn What’s Happening Near You
To find out if new construction is rising near you, simply search your address at www.Localize.city. The website provides critical details on new developments being built within a half block radius, including information about project timelines, or whether construction is booming within a 10-minute walk.
To stay up-to-date on construction projects near you, you can sign up for alerts at www.Localize.city.