The breakneck pace and cutthroat economics of residential real estate in New York City are legendary. For every new building that goes up, it seems like there's a battle to be fought, either with city agencies, community groups, preservation and historical societies, and anyone else with an opinion; which is to say, everyone else in the city.
But even with complicated zoning restrictions, spiraling development costs, and protracted bureaucratic wrangling, new development in the city continues at a rapid pace. The 2004-2005 development cycle has seen and will continue to see the city skyline punctuated with scaffolding of all descriptions and prices for both new and repurposed developments head north. Low interest rates, high prices for rentals, and the increasing desirability of nearly every neighborhood in New York City all seem to be contributing to the continuing real estate boom.
While new development happening all over the city thrills brokers eager for new properties to show their clients, a core problem remains: regardless of planned or new construction, the fact is that housing production continues to lag well behind demand, both in Manhattan and the outer boroughs.
According to Rachaele Raynoff, press secretary for the New York City Department of City Planning, "The increase in new residential construction is actually citywide. In 2004, we surpassed 25,000 residential permits. We see a steady upswing in new properties, and we see it as an enormous vote of confidence in the city after 9/11. It has not slacked off. People see New York as a great place to invest. People want to be here and they need to be housed."
They may want to live here, says Peter D. Salins, a senior fellow of the Manhattan Institute's Center for Civic Innovation, and a director of the Citizens Housing and Planning Council of New York, but as he writes in a recent report for the Institute titled New York City's Housing Gap: The Road to Recovery, they may find the housing part more and more difficult.