From left: Seth Pinksy, EDC president, Richard Anderson, president New York Building Congress
One of the city’s most influential coalitions of construction-related firms, the New York Building Congress, is questioning its own estimates of residential construction and spending that formed part of figures cited last week by the president of the city’s Economic Development Corporation, Seth Pinsky, after The Real Deal inquired about the statistics.
Building Congress statistics released Oct. 21 estimated total residential construction would fall to 6,300 units in 2009 from 31,911 units in 2008, and total spending value would decline to $3.5 billion in 2009 from $6.3 billion in 2008.
The group’s figures are considered among the most dependable in the industry for the difficult work of estimating construction activity in the city, and its report was covered by the New York Times, Crain’s and other publications. Pinsky spoke at the meeting, referencing the Building Congress report showing an overall decline in construction spending of 20 percent in 2009 compared with the prior year.
But the residential figures may be off.
A quick computation of the Building Congress data by The Real Deal revealed that the cost of a single residential unit would jump by 200 percent to $555,000 in 2009 from $185,000 in 2008, an unusually large percentage over a one-year period.
After being questioned this week about the enormous change in the cost per unit, the Building Congress’ president Richard Anderson told The Real Deal the group would review its statistics.
“It is a big increase. It could be we estimated it a little bit too high,” he said.
But some of the increase could be attributed to the augmentation of the size of apartments, Anderson said.
“[It is] clear units are going up in size because developers think they are more valuable,” he said. “Whether that is sufficient to justify the number in our report is what we are thinking about.”
He would not say if the group would revise the total estimates for spending and for the number of units created. In what he described as an imperfect science, he said the group would take a look at cost-per-unit as it puts out occasional updates.
Michael Slattery, senior vice president of the Real Estate Board of New York, was not aware of a general trend of apartments increasing in size, but noted that with increased regulations for handicapped accessibility and security features apartments may have grown.
As for annual figures on units constructed and their costs, his group did not have its own independent figures.
However, “the sense seems to be that prices seem to be coming down,” he said.
Louis Coletti, a vice chairman of the Building Congress and president and CEO of the contractor trade group the Building Trades Employers’ Association, noted how difficult it was to obtain construction-related data, but said he was skeptical of the figures because in general, construction costs are down.
“Construction costs are down 10 to 20 percent. I don’t see how they could project a higher cost,” he said, relying on Building Trades Employers’ Association statistics.