Bigger. Better. Bolder. Inman Connect is heading to San Diego. Join thousands of real estate pros, connect with the Inman Community and gain insights from hundreds of leading minds shaping the industry. If you’re ready to grow your business and invest in yourself, this is where you need to be. Go BIG in San Diego!
New York City’s real estate industry — especially the commercial sector — continues to be the backbone of the city’s economy, driving record-breaking tax revenues in 2024.
According to the latest Invisible Engine report from the Real Estate Board of New York (REBNY), real estate-related taxes soared to an all-time high of $37 billion last year. That figure is expected to climb even higher to $40 billion in 2025.
TAKE THE INMAN INTEL INDEX SURVEY FOR MARCH
Despite ongoing challenges in the office market stemming from pandemic-era shifts, the commercial sector has remained resilient, contributing $13.1 billion in revenue and accounting for more than 82 percent of total property taxes.
The commercial sector faced increasing financial distress over the past year, with the MSCI’s Capital Trends July report recording that portfolios of foreclosed and seized office buildings, apartments and other commercial properties totaled $20.5 billion.
James Whelan | REBNY President
“Through the pandemic, changing workplace trends and volatile macroeconomic pressures on sales and development activity, the real estate sector continues to be the backbone of New York City’s economic revenue base,” REBNY President James Whelan said in a statement.
Real estate taxes have consistently been the largest contributor to New York City’s revenue, making up 51 percent of locally collected taxes since 2010 and totaling $429 billion over that period. However, in 2024, that share dipped below 50 percent for the first time since 2019 due to higher-than-expected revenues and contributions to the pass-through-entity tax.
Forecasts suggest that real estate tax contributions will once again exceed 50 percent of local tax revenues in 2025. Meanwhile, New York City’s budget has skyrocketed to $110 billion — an 89 percent increase since 2010.
While tax revenues continue to climb, the impact on jobs tells a different story.
The real estate and construction industries employ nearly 300,000 people — roughly 6 percent of NYC’s 4.8 million workers — and have long provided stable middle-class jobs. However, job opportunities in the sector are shrinking; with new housing construction at historic lows and an oversupply of underutilized Class B and C office space, construction jobs have declined significantly.
According to the U.S. Census Bureau’s latest New Residential Construction report, privately-owned housing construction starts were 2.9 percent below the February 2024 rate, while housing completions were down 4 percent from the same time period. With declining job opportunities, builder uncertainty and challenging conditions, new developments are stalling.
