I had hoped to keep the blog up to date – but the time zone has got the better of me! Yesterday was my first day proper on this study tour.
Our day started at the NYU Schack Institute of Real Estate where we had a discussion with two of the teaching professors – Hugh Kelly and Emily Youssof. Both provided an interesting introduction to the New York property market. In a couple of hours they confirmed some things, some of which I already knew:
1. New York does not need to ‘compete on cost’ – it is sufficiently strong to rise above a race to the bottom.
2. It is City of incredibly high productivity – partly due to it’s badge as a 24 hour city.
3. There are nearly 8.4m people – but it remains a relatively safe city.
4. Residential capital values are now between $1,500 and $3,000 per square foot. (In context a 500 ft studio will cost you a minimum of $750,000 – c.£467,000)
5. There is no obligation to provide affordable Housing – although doing so will earn tax breaks (the UK Planning system will impose a requirement to provide Affordable Housing of 20-30%)
6. Close proximity to a subway line has a positive impact on values – typically an uplift of 15% within 500m of a station
7. Studies suggest that 750,000 new homes are needed in New York – with a pledge of 200,000 to be ‘affordable’. There is not a square inch more land – so density and height are the only place to go.
8. Rents in NYC have increased by 23% since 2010. The average rent in New York is now $3153 per month ( c.£2,500)
9. There are 3,083,393 households – only 32.3% are owned – this is a city of renters.
10. Although Banking and Finance still remain key employers – the ‘Eds and Meds’ are starting to have a major influence – there are 500,000 people in the ‘health sector’ – 127 Nobel Prize winners work in the City.
This was the supposed good news story – growth, success and vibrancy. But you will see s story emerge about those who haven’t. More on that in the next post!