Doom-and-gloom credit crisis notwithstanding, developers requested city approval to build substantially more new buildings in the first four months of this year than in the same period last year, according to Department of Buildings statistics.
We know. It’s a little startling, given the Bear Stearns bailout, rising construction costs and the difficulty in getting credit.
Yet during the first four months of 2008, there were 98 applications for new Manhattan building permits, a 46 percent increase over the same period in 2007, when there were 67.
Breaking down the numbers further, in Community Board 4, which encompasses Chelsea and Hell’s Kitchen, developers requested 16 new building permits, in contrast to just five in the same period last year. In Community Board 5, also known as midtown, there were 10 new building permits requested this year, in contrast to five in the same period last year.
What’s going on?
Séamus Henchy, president of Séamus Henchy and Associates Inc., a project management firm that is handling the renovation and expansion of Juilliard, said he’s seen an “unusual” spike in business this year, and he thinks he knows why.
In addition to the commonly cited reasons—international money and the abysmal exchange rate—Mr. Henchy cited some less obvious factors, including, counterintuitively, the financial crisis itself.
“The developers that are concerned about the financial crisis are probably trying to secure and finalize any deals that they can, before things get even worse,” he said.
In other words, maybe this is a last gasp. Frightening thought, no?
And then, of course, there’s the impending sunset of the 421-a tax exemption for developers; a recent rezoning in Harlem; and a pending rezoning in Chelsea.
“It could be the rush to get the buildings under way prior to the expiration of the 421-a,” said Richard Anderson, president of the New York Building Congress.
But perhaps most intriguing is Mr. Henchy’s suggestion that some builders are trying to get permits approved before New York adopts the international building code, which should happen this year.
“It’s the fear of the unknown, probably,” said Mr. Henchy.