Does NYC Still Have Room for Growth? A Study on Undeveloped Land in Major US CBDs

COMMERCIALCafé conducted a study looking at the amount of vacant land in 25 major U.S. downtowns. Using combined data sets from Property Shark, Yardi Matrix and other government records, they determined the amount of undeveloped land, construction projects that were completed in the past five years and future development pipelines in the urban cores of these 25 cities. A corresponding survey also asked 1,549 respondents living and/or working in central business districts what they would like to see built in their city’s downtown, as well as what they feel the area needs most.

Despite Intense Construction Activity, NYC Has 16.5 Acres of Vacant Land Downtown, More Than LA or DC

Of the 25 cities analyzed in the study, Dallas and Las Vegas boast the most vacant land in their urban cores, 86.3 and 75 acres, respectively, while at the other end of the list, Tampa only has 6.29 acres of undeveloped land left in its CBD, and the city is already having to deal with an urban sprawl strain.

New York City has only 16.49 acres of vacant land in its CBD, following a building frenzy that has resulted in roughly 30 million square feet of property completed here between 2013 and 2017. That number includes 14.3 million square feet of housing, 3.12 million square feet of office space and 3.1 million square feet of hotels built in the past five years—the most intense construction activity among the 25 cities included in the analysis. Interestingly, NYC still has more room in its CBD than cities like Los Angeles, Houston, Washington, D.C. or Miami, as it ranks somewhere in the middle of our list when it comes to land availability in the urban core.

More Than 50% of Survey Respondents Say NYC Has a Housing Problem

COMMERCIALCafé asked Americans in these 25 cities about how they think the urban landscape in their area should evolve. The gap between wants and needs on this issue has turned out to be rather narrow, as most respondents agreed that housing should be the number one priority right now. At the national level, 72% of those surveyed said they wanted to see more housing and homeless shelters built in their CBDs. That number went up to 83% when asked about what they felt the urban core needed most.

Zooming in to the local level, 51% of New York respondents wanted more housing, 45% opted for more parks, and 27% wished there were more medical facilities downtown. Switching to the needs of New Yorkers, there are only slight changes: 58% of those surveyed felt the city needed more residential units, 38% said the CBD could benefit from having more parks, and 36% thought homeless shelters were necessary.

These answers are driven by a serious shortage of affordable residential units. Although construction companies are busy delivering much needed housing solutions, very few of these new projects end up being affordable. More than half of New York renters are rent-burdened, devoting over 30% of their income to paying for the roof above their heads, while a third of them end up giving away half of their earnings each month on rent and utilities. Among the various age groups, Millennials are hit hardest, spending $93,000 on rent by the time they reach their 30s, around 45% of their incomes. With home ownership still out of reach for most Millennials, future trends indicate continuously rising rent costs, a problem which, if left unaddressed, is bound to go on to effect the incoming Generation Z.

The unifying theme of the survey answers is a wish for a more convergent, caring and sustainable community that deals with issues that affect an increasing number of people as more cities experience sustained growth.

For more about the results of this survey and details about the methodology, read the full study on the COMMERCIALCafé blog.

Diana Sabau

Diana Sabau

With years of intense research on the U.S. commercial real estate market at Yardi Matrix, Diana is currently putting her experience to use by writing for several Yardi blogs. She covers CRE investment, job market trends and tech. Her work has been featured in the New York Times, GlobeSt, The Real Deal, NAIOP, MSN and Bisnow.

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