Industry players who constantly refer to New York City as a market with a high barrier to entry may want to refresh their talking points. Sure, the high cost of land will continue to weed out some of the competition, but when it comes to the regulatory environment, the Big Apple is actually pretty pro-development.
New York City earned a score of 5 out of 10 in A New Report By Green Street Advisors looking at the barriers to commercial real estate supply in the nation’s top markets, the Wall Street Journal reported.
New York scored better than West Los Angeles – which earned a score of 10 – as well as San Francisco, Washington, D.C., Boston and downtown L.A. The report credits policy changes enacted during Mayor Michael Bloomberg’s administration such as rezonings and economic incentives for a swell of new supply across different property types.
The growth in hotels, apartments and self-storage are indicative of the effect those pro-growth policies had on new supply.
“Even self-storage, which has long benefited from NIMBYism, is experiencing an explosion of new supply,” the report read. “Self-storage inventory in Brooklyn, Bronx, and Queens is expected to grow at an outsized annual rate of 5-7% through the end of the decade.”
The report noted that proposals from Mayor Bill de Blasio to limit new hotel and self-storage development could impact the city’s score. [WSJ] – Rich Bockmann