Commercial and multi-family construction up in 2016

February 24, 2017

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A recent report by Dodge Data and Analytics shows significant increases in most of the United States’ metropolitan areas in 2016, led by New York City, Los Angeles, Chicago, Washington, D.C., and Dallas-Fort Worth.
Photo © BigStockPhoto

According to Dodge Data and Analytics, most U.S. metropolitan areas saw significant increases in commercial and multi-family construction project starts last year. This sector includes multi-family housing, office, hotel, warehouse, commercial garage, and store projects.

The 10 metropolitan areas for dollars earned in 2016 were:

Despite New York City’s high performance in terms of dollars earned, its multi-family housing project starts dropped by a significant 28 percent. In fact, were it not for this decline, the nation’s multi-family construction starts would have increased by 13 percent rather than three. As a whole, the United States saw a seven-percent increase in construction starts this year, with increases of 11 percent in commercial building.

“What stands out about 2016 is that growth for commercial and multi-family construction starts becoming broader geographically,” says Robert A. Murray, Dodge Data and Analytics’ chief economist. “Back in 2015, the New York metropolitan area led the upturn by soaring 67 percent, while the next nine markets combined grew eight percent. In 2016, the 15-percent downturn in the New York market was countered by a 33-percent hike for the next nine markets. As a result, the New York share of the U.S. total for commercial and multi-family construction starts settled back from 20 percent in 2015 to 16 percent in 2016, which was still relatively high compared to the 13-percent share during the 2010 to 2014 period.”

The totals for each area were influenced by a variety of factors.

New York City
Most likely, the New York metropolitan area’s general decline was encouraged by the expiration of the city’s 421-a program, which—until it ended last January—used tax incentives to encourage developers to provide affordable housing.

In 2016, this area experienced:

Los Angeles
Moving from the third-largest market in commercial and multi-family construction to the second-largest, Los Angeles experienced a 36-percent increase in commercial building and a 50-percent increase in multi-family housing in 2016.

This year, the area also experienced the following shifts:

Chicago
Chicago jumped from 2015’s fifth-largest market for these construction categories to third-largest last year, maintaining last year’s performance in commercial construction and seeing an 82-percent increase in multi-family housing.

In total in 2016:

Endnotes:
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