Housing Development Increases Sharply in Bronx, Queens
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Residential construction is surging in the Bronx and Queens this year, as low interest rates and funding from the city government has spurred development, say real estate experts.
For the nine months ending in September, the total value of residential construction permits in the Bronx has increased 69% to $259 million and in Queens has jumped 57% to $413 million over last year, according to data released by the U.S. Census Bureau. Manhattan and Brooklyn saw a dip in their construction totals, while Staten Island has seen a modest increase.
In the Bronx, much of the growth has focused on multifamily structures. From 2001 to 2004, there was a gain of 2,076 units, and of these, 586 were from three- and four-family housing, while 1,381 were from five-plus family structures.
The majority of growth in the Bronx may be centered on multifamily housing because government programs are focused on these housing types. In the last year, the city has generated 1,100 new units in the Bronx with another 700 scheduled to close by December, according to the city’s Housing Development Corporation, which finances subsidized housing programs in the five boroughs. Since 1997, the corporation has created 3,500 units through various programs in the Bronx.
“As one of the largest housing development corporations, we feel responsible for making anchor investments in neighborhoods like these throughout the city,” said the president of the Housing Development Corporation, Emily Youssouf. “This is the second year of the mayor’s housing plan, and the stars are all aligned: Interest rates are still low, and we have a lot of liquidity. I don’t believe we said no to one credible development project yet,” she added.
In Queens, nearly all the different housing types, from single family to five-plus multifamily housing, have doubled in volume from 2001 to 2004.This may be because while the Bronx is amenable to apartment dwellings, Queens favors diverse housing, a survey statistician with the U.S. Census Bureau, Steven Berman, said.
While the jump in residential housing construction is dramatic, Mr. Berman said these numbers could be misleading.
“When you have small base figures, like we do here with residential construction in the boroughs, and these numbers increase, the percentage they go up seems much larger than it is, the scale is out of whack,” he said. “Still, these numbers are noteworthy because while the figures have been increasing since 2001, they have shown a real surge in the past year.”
Interest rates are on the rise, but this does not mean the end to the upward trend in residential home construction in the Bronx and Queens, Mr. Berman said. “Interest rates do matter, but the unemployment pictures also play a part,” he said. If the economy strengthens and there are more jobs paying higher salaries, and these salaries grow more than inflation, it will help offset higher rates.
Also helping higher rates is the existence of variable rate loans, under which buyers can use these loans and refinance later when interest rates fall.