(Bloomberg)—The pandemic’s slowdown in real estate deals has cost New York City $1.2 billion in lost revenue so far this year.
Sales of commercial and residential properties -- everything from office buildings to hotels and condo units -- are down 49% this year through November, according to a report Thursday by the Real Estate Board of New York.
That’s led to a 42% decline in city tax revenue, compared with the same 11-month period in 2019, the trade group said. The money comes from a long list of levies that each transaction generates. A dearth of deals means fewer collections of transfer and mansion taxes, and less income from newly recorded mortgages.
Real estate investors are taking a pause amid a pandemic that’s reordered how and where New Yorkers live and work -- and, in turn, undermined property values. The pullback has dealt a crippling blow to the city’s economy, which relied on the real estate industry for 53% of its annual tax revenue in the last fiscal year, the real estate group said.
While vaccines offer some optimism, “New York’s economic crisis grows,” James Whelan, the group’s president, said in a statement. “From rental assistance and unemployment benefits to state and local aid, New York needs federal relief.”
New York City’s overall budget is about $92 billion. In the first four months of the fiscal year, property tax collections increased 4% to $16.6 billion.
--With assistance from Martin Z. Braun.
© 2020 Bloomberg L.P.
