Many people often associate the concept behind New York city with big dreams and aspirations. A city so monumental that in a simple glimpse, reflects the realization of human ambition and invites you to dream big. Skyscrapers are the city´s most popular attraction and also one of its main sources of revenue. With a population of 8,405,837 people, New York City is the most populated city in the United States.
After more than 4 years fighting an economic depression, construction in New York city its at his prime. The old city icons like the Chrysler Building (1,046ft) and the Empire State Building (1,250ft) are losing their shine against new buildings like One World Trade Center (1,398ft) and 432 Park Ave (1,396ft). Some of the most ambitious projects in years are are currently under construction, most of them in Manhattan.
Certainly the average New Yorker is not a target for developers trying to sell the hundreds of units on these new apartment buildings. As a matter of fact the difference between the median household income in New York City and the high cost of these apartments leaves a gap higher than the buildings itself. Looking at the statistics the average household income is at $50, 711, while the average rent for new residential buildings is between $5,000 to $6,000, with an average selling value of 1.68 million in 2014 (17% higher than 2013). Manhattan holds the number one place in high rental value followed by Brooklyn, Queens and the Bronx being the most affordable. New York City is now in first place holding more dollar revenue in real estate investment than any other city in the world, defeating other major uppercoming cities like Tokyo and London. The main market for the city´s real estate in 2013 and 2014 has come from Eastern Europe, Asia, Brazil and Australia, aside from domestic investors.
New York City´s skyline is constantly changing, the main reason behind the urge of building taller and taller relies in the principle of supply and demand. Demand for New York city real estate is at its highest point in years, while the availability of new units in the market is very limited. This has forced developers to build much more taller, faster and cheaper.
Anyone can understand that growth comes from investment, which is something this city does not lack off. But does it only cause a counterproductive effect? Really, think about it. A saturated market with a high demand of a product and very limited supply, will lead to having a shortage. When you have a shortage of anything, prices automatically skyrocket. Even though unemployment rates are at the lowest point in years because of all this investment, the cost of living has significantly increased because of all the competition in the market. Renters trying to find an apartment in any of the surrounding neighborhoods to the city might find that prices are maybe 15-20% higher compared to the previous years.
The visual contamination caused by cranes and exposed steel structures are not the only factors directly affecting New Yorkers. In an effort to maximize their profits even more, developers have adopt the fashion of bidding out their jobs exclusively to non-union contractors, which reduces the labor cost by at least 40%. Because the nonunion sector of the construction industry is less or almost non regulated, contractors tend to hire undocumented workers. Only thirty percent of the projects going on in the city are unionised, this has increased significantly the number of undocumented workers working for cash, which naturally decreases the dollar amount collected by the city, state and federal government in income taxes.
If the cost of acquiring or renting a property keeps going up, people with low and medium income will be force to move further away from the city and New York city as we know it will not be the same. Neighborhoods like Long Island City and Jersey City are already being victims of the replacement of the old for the new and luxurious.