New York’s real estate sector is a critical component in funding the city’s budget, driving its transportation initiatives and providing employment opportunities,according to a new report from the Real Estate Board of New York (REBNY).
“Despite the economic trauma wrought by the pandemic, real estate is still the financial bedrock of the city's economy,” the report said.
The real estate sector generates $37 billion in tax revenue for the city at a time when its budget has nearly doubled from $59 billion in 2010 to $112.4 billion in 2025. Real estate-related taxes (RERT) provide more than one-third of New York City’s tax collection and about half of its locally gathered tax revenue. RERT includes property assessment levies, mortgage and recording taxes, and permitting and filing fines and fees.
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REBNY illustrated the impact of real estate revenues on city operations by noting RERT collections cover the annual city government wages and salaries for 280,000 workers with $5 billion left to spare. RERT is expected to exceed $40 billion in fiscal year 2025.
Commercial real estate accounts for 83% of property taxes in the city, with Class 4 properties, including office, retail, hotels and factories, accounting for $13.1 billion in billable tax revenue. Class 2 multifamily housing is also a key component of the city’s tax base, contributing $13 billion in tax revenue. Together, these two sectors accounted for 76% of the city’s property tax levy from 2019 to 2024.
Fees and fines collected from the real estate industry totaled over $650 million in New York. One of the largest single sources of these is construction permit fees, but collections from permit filings and fines account for two-thirds of the total amount, said the report.
The real estate sector in the Big Apple also provides access to important career pathways for multiple income levels, including high-paying jobs that do not require a college degree, the REBNY report said. Almost 300,000 New Yorkers work in real estate.
Construction employment is at its lowest level since 2016, down 19%, as overall housing construction has declined and underutilized Class B and Class C office space has increased. However, six of the 10 highest-paying careers for non-college-educated workers are in the real estate sector. They include elevator installation and repair; real estate sales agents, control and valve installers, property, real estate, and community association managers, structural iron and steel and construction trade supervisors. All of these careers have a median annual salary of more than $91,500, according to REBNY.
The report also noted that real estate is an important driver of New York’s Metropolitan Transportation Authority (MTA). RERT is supplied to the operating budget in the form of the Real Property Transfer Tax, which provided $213 million to Urban Taxes in 2024. That consists of the Mortgage Recording Tax (MRT) and the Real Property Transfer Tax (RPTT), said REBNY. RERT also supports the MTA’s capital spending. In the city’s 2020 Capital Plan, $5 billion in real estate transfer taxes were dedicated to the MTA’s Capital Lockbox. These funds provide vital support that is needed to help the system remain in good repair and expand, said REBNY.
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Kristen Smithberg
Kristen Smithberg is a Colorado-based freelance writer who covers commercial real estate, insurance, benefits and retirement topics for BenefitsPRO and other industry publications.
