Jesse Server is managing editor of Real Estate New York
NEW YORK CITY-Despite escalating costs, construction in the city shows no signs of slowing down, Daniel Doctoroff, New York City Deputy Mayor for economic development, told attendees at a construction industry forum here Tuesday. The event, held at the Hilton New York, revealed the findings of the New York Building Congress' New York City Construction Outlook for 2006-2008.
According to the report, an annually released forecast based on analysis of capital budgets, private-sector development plans and other indicators, total construction spending in the city will top $20 billion for the first time in 2006, and exceed $21 billion in 2007 and 2008.
"My favorite statistic is that, in one square mile south of Chambers Street, there is $37 billion under construction, or set to start construction, in the next couple of years," Doctoroff said. "There has never been more construction going on at one time in the history of New York City."
Despite the record numbers, the construction industry is only at the beginning of a historic upswing, said Richard T. Anderson, New York Building Congress president. "Given that World Trade Center construction activity won't begin to peak until 2009 and that major development projects such as Atlantic and Hudson Yards are slated to commence in that timeframe as well," he said, "it is possible that the building boom could proceed unabated well into the next decade."
Doctoroff, meanwhile, warned about the risks of rapidly rising construction costs, noting that the phenomenon is not entirely due to the rising price of commodities, but also to inefficiency on the part of both the public and private sectors. "Process requirements are important, but the process must be balanced with efficiency if we are to use the public's money wisely," he warned. "I am sick of hearing, 'This is the way it's always been done.' It's time to change the way it's been done to the way that makes sense. We need to be more nimble so the city can execute more efficiently in a rapidly-changing environment."
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