Project filings slowed in winter, plunged in March

Before New York halted most types of construction last week, 2020 was already off to a slow start.

The number of new building filings in January and February dropped 28 percent and 23 percent, respectively, from a year ago, according to an analysis of Department of Building filings by The Real Deal.

As the coronavirus pandemic gripped the city in March with sweeping shutdowns beginning halfway through the month, permit filings plunged further — down 37 percent from March 1 through March 28. As of Wednesday morning, only three new building permit applications had been filed this week. The average last March was nearly nine per weekday.

The largest new building project filed in the first four weeks of March was for the Gotham Organization’s 60 Norfolk Street, part of a two-building apartment complex planned for the Lower East Side that the company is co-developing with the Chinese-American Planning Council. The project is expected to have nearly 500 units, 20 percent of which will be affordable through the city’s Mandatory Inclusionary Housing program. Another 24 percent will be set aside for senior residents. Given its affordable housing component, the project would be exempt from the restrictions on construction throughout New York.

Under the state’s order issued last week, only essential constructruction can continue as officials grapple with the continued spread of Covid-19. Essential is defined by the state as utilities work, transit projects, work on healthcare facilities and affordable housing.

The Department of Buildings issued guidance on Monday clarifying that it will allow projects where at least 30 percent of the apartments are set aside for income-restricted tenants or that have a mandatory or voluntary inclusionary housing agreement.

Owners can apply to have their projects exempted from the ban on non-essential construction. Violators face fines of up to $10,000.

The halt in projects applies to those already under construction, but the agency is still processing applications. Gotham’s David Picket noted that it takes several months for a project to receive Department of Buildings approvals to get off the ground. He hopes construction on the project will commence in August.

“If construction is still shut down at that point, I think we will have a lot more to deal with than just a cessation in construction,” he said.

The second-largest project filed in March was for a 300-plus unit rental building at 312 West 43rd Street. In 2018 a joint venture between Taconic Investment Partners and National Real Estate Advisors finalized a 99-year ground lease for the site, which was formerly the Times Square headquarters for health care workers union 1199SEIU. Taconic was not immediately able to discuss the project.

The pandemic does not appear to have affected the mix of small and large projects. More than half of the 115 new building applications in March were for projects spanning less than 10,000 square feet (projects smaller than 1,000 square feet were excluded from this analysis). The same was true for the 182 new building filings in March 2019, as well as for January and February of this year and last year.

Source note: Data includes all pre-filed applications for the months of January 2019, February 2019, March 2019, January 2020 and February 2020, and through March 28, 2020. Analysis excluded anything with a total floor construction area less than 1,000 square feet.

Write to Kathryn Brenzel at kathryn@therealdeal.com