NEW YORK CITY—New York City's real estate industry generated $15.4 billion in taxes in 2012, which represents 38% of the city's tax revenue, according to a new report commissioned by the Real Estate Board of New York and completed by AKRF. In total, the economic impact of the real estate industry's activities was an astounding $106.2 billion in jobs, wages and output—comprising approximately 13% of the gross city product.
The comprehensive economic impact study titled, “The Invisible Engine: the Economic Impact of New York City's Real Estate Industry,” reveals that over the course of 2012, revenue-generating properties provided enough tax revenue to pay the City's entire share of $13.1 billion in payroll expenses for teachers, police officers, fire fighters, sanitation workers and correction officers with $2.3 billion left over to fund other city services. These numbers factor in taxes from properties such as office and residential rental buildings, hotels, retail stores and utility properties and do not include one- and two-family homes, cooperatives, condominiums, schools, hospitals and other publicly-funded structures.
"This report demonstrates there's a lot more to New York City's real estate industry than meets the eye,” says Steven Spinola, REBNY president, 'The Invisible Engine' is proof that New York City's real estate industry is not only a major economic engine but it also provides the tax base the city needs to fund the salaries of every single school teacher, police officer, fire fighter and a lot more city services. The report makes it clear that we must continue to build revenue-generating properties throughout the five boroughs and keep the 'Invisible Engine' running.”
Excluding property taxes, the real estate industry generated $1.6 billion in additional tax revenue for the city in 2012, including nearly $700 million from the construction industry and approximately $920 million from non-construction services such as real estate agents and brokers, property managers, real estate appraisers, property and title insurance and others.
As one of the major job generators in the city, the real estate industry supported nearly 519,000 jobs—which represented 11% of the jobs in the city and $33 billion in annual wages.
Non-construction real estate activities supported 322,700 jobs, or seven percent of the city's total, with an average wage of $51,780 in 2012. The construction industry supported 196,200 jobs with an average salary of $79,175.
“The report demonstrates the enormous contribution of the real estate industry to the city's economy and to the city budget. The revenues generated from the real estate industry fund services vital to a thriving and vibrant city,” adds John Neill, VP, AKRF.
“We're glad to see a report telling the story of how much of an economic engine the real estate industry is for New York City. Responsible development that provides a path to the middle class and creates family-sustaining jobs is good for the economy and good for the city. We look forward to educating the public about how the real estate industry can have a broader impact, and hope to work closely with REBNY on building a better city for all,” asserts Hector Figueroa, president, 32BJ SEIU.
Says Gary LaBarbera, president of the 100,000 member Building and Construction Trades Council of Greater New York, “Real estate development in New York City has for a long time created good private sector jobs in construction and generated the revenue needed for essential public services and investments in our infrastructure that are fundamental to growing our economy and middle class opportunity,” adds must keep our city an attractive place in which to live, do business and visit so that we can continue to promote responsible development.”
Notes Mitchell Moss, Henry Hart Rice professor of urban planning and policy, NYU, “NYC depends on the intelligent and creative use of land to make this city work in all five boroughs. We cannot create more land but the real estate industry produces the space we need to live and work. This thoughtful report highlights the vital role that the real estate sector plays in the life of our city and as a fundamental revenue source for the city and state government,” said
See the full report here, along with "Faces Behind The Numbers," which includes examples of people working in the real estate industry.
Want to continue reading?
Become a Free ALM Digital Reader.
Once you are an ALM Digital Member, you’ll receive:
- Breaking commercial real estate news and analysis, on-site and via our newsletters and custom alerts
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the property casualty insurance and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
Rayna Katz
Rayna Katz is a seasoned business journalist whose extensive experience includes coverage of the lodging sector, travel and the culinary space. She was most recently content director for a business-to-business publisher, overseeing four publications. While at Meeting News, a travel trade publication, she received a Best Reporting award for a story on meeting cancellations in New Orleans during Hurricane Katrina.
