Insights from the Top
Richard T. Anderson is a highly-regarded advocate of strategic infrastructure investment and economic development. He served as president of the New York Building Congress for 22 years, and here shares his views for New York City’s construction market outlook.
What is the outlook for NYC construction and real estate?
There’s never been a better time for NYC. It’s a $43 billion marketplace and the outlook is for continued growth. Each major sector—infrastructure, residential, higher education and commercial—is booming.
It really is a remarkable period, because the city is firing on all its economic cylinders. If you’re on the board of a major institution and you don’t have a robust investment plan, there is something wrong. The city’s educational institutions, hospitals and cultural institutions are all embarked on significant investments.
What are the biggest challenges facing NYC?
The challenges facing our industry are also the problems of success: there’s a shortage of project managers, consulting engineers, architects and trade labor. We’re also experiencing cost escalation; prices are going up and there’s not enough supply.
The pie is increasing in size. The challenge is how we will take advantage of the opportunities, and of NYC as a five-borough city. There are more building permits being issued in the Bronx than any other borough right now. There are no parts of the city that’re oﬀ limits.
In Manhattan, there are very few pieces of undeveloped sites. East Midtown will be the next major area for redevelopment. The rezoning proposal around Grand Central will pass, although it will take another 10 years for development, and Hudson Yards will take 25 years to build out.
What will dampen the city’s growth?
There will be an economic downturn, as there always is. But the biggest uncertainty in the foreseeable future is public safety. Events like a terrorist act would pause or halt investments. But failing that kind of event, there isn’t likely to be a downturn for a number of years.
What will dampen NYC’s growth is lack of infrastructure and adequate transportation. The subways, tunnels under the Hudson, and airports are operating at or beyond capacity. This could slow the growth. We’re going to put up with aging infrastructure, while hopefully it is improved.
How does the city tap P3, design–build and alternative delivery methods as sources of investment going forward?
Private investment is essential to our long-term development. We must have enabling legislation in New York State. Today, we don’t have design-build authorization. Albany is a huge problem. We must also continue to work through industry associations, such as the ACEC and the Real Estate Board, to help Albany unleash the power of private investment.
What do companies need to consider in their planning?
Companies need to be aware of what the government is doing—or not doing. It’s important to understand and respect each other. To be familiar with, for instance, the MTA capital program and the Port Authority capital plan, and adjust their private plans accordingly. The number 7 subway line encouraged Related
to secured their designation for Hudson Yards.
Click here to download a PDF of the article, which appears in our 2017 Connections Summer magazine.