New York City’s education sector has become an increasingly important market for the construction industry, according to the New York Building Congress, a nonprofit group that represents the construction industry.
Elementary and secondary schools, as well as higher education institutions, accounted for 56% of the value of all institutional construction starts between May 2008 and April of this year, according to a report released by the group Monday.
The Building Congress points out that much of the surge is due to the work of the New York City School Construction Authority, which initiated $3.1 billion in public school projects over this period, compared with $174 million in starts by private elementary and secondary schools.
Private colleges and universities were responsible for $744 million in starts, while publicly-owned institutions of higher education, such as City University of New York, accounted for $540 million in starts.
Construction of new education facilities totaled $2.3 billion in value. This stands in direct contrast with the office sector, which has seen very little ground-up construction outside the World Trade Center in recent years. Recent major construction starts include CUNY’s $381 million Advanced Research Center and $210 million Fiterman Hall, as well as Mount Sinai School of Medicine’s $225 million research building.
New York City’s private and public institutions initiated $8.1 billion in total construction projects over a two year period ending in April 2010. The public sector was responsible for $4.87 billion, or 60%, of the value of these projects, while private sector owners accounted for $3.28 billion in project starts.
“These figures indicate the importance of government spending during a recession,” says Leonard Steinberg, head of the LUXURYLOFT team and a managing director of Prudential Douglas Elliman. “Without this spending, one could be certain the construction industry would be virtually wiped out. My concern is what happens once this construction ends: hopefully by then the private sector has recovered. The reality is the private sector is paying for all of this, regardless: while government spending may be huge, it is taxpayers money paying for this after all.”