NYC residential construction increase part of national central-city boom

New York City’s residential construction boom—the largest in three decades—is part of a national revival in central-city construction, according to Economic Notes, a quarterly publication released by Comptroller Thompson.

Thompson found that the City issued building permits for 62,526 new housing units in 2005 and 2006, which is the highest two-year total since 1971 and 1972.

The analysis suggests that housing development in the nation’s largest central cities has exhibited a resurgence during this decade and that New York has had one of the strongest revivals. The 25 largest American cities have increased their share of national housing permits from 6.5 percent in 1997 to 9.8 percent in 2006.

This construction boom has been most pronounced in the oldest and densest of these cities. Fourteen cities which were among the 25 largest in 1940 increased their share of large-city housing permits from 41 percent in 1997 to 56 percent in 2006.

New York City has not only outperformed the national trend, but also that of the large-city group. In 1997, New York accounted for 9.6 percent of the new residential units authorized in the 25 largest cities. By 2006, its share had grown to 17.2 percent.

The report additionally analyzes the City’s economy, and shows that Real Gross City Product (GCP), a measure of the overall City economy, grew 3.6 percent for the full year of 2006, the third consecutive year of solid growth for the City’s economy. Economic growth, however, decelerated during the course of the year. The City’s GCP estimated growth was 1.9 percent for 4Q06, the weakest quarter of 2006.

Thompson calls for Wal-Mart investigation

Comptroller Thompson has asked the U.S. Attorney General and the Securities and Exchange Commission to investigate if Wal-Mart illegally performed surveillance operations on the Comptroller’s Office.

Responding to a story  in The Wall Street Journal in early April, Thompson wrote both offices and Wal-Mart, citing reports of the retailer’s “ill-considered and possibly illegal surveillance operations directed at my office and numerous other shareholders; particularly those…who were introducing resolutions that your company was seeking to thwart.”

Thompson called Wal-Mart’s reported activities “chilling and truly outrageous,” and said the act “reflects breathtakingly flawed judgment and raises significant questions regarding Wal-Mart’s commitment to its shareholders and the public markets.”

His office, among others, reportedly was subject by Wal-Mart to surveillance and “threat assessments” related to shareholder proposals. The City pension funds, which hold about 8 million shares of Wal-Mart valued at nearly $400 million, have submitted a series of proposals asking the firm to disclose political contributions, comply with the MacBride Principles, and inform shareholders about its labor practices.

“I strongly urge your office to thoroughly investigate this matter and compel Wal-Mart to fully disclose the nature and extent of this apparently longstanding practice,” said one letter.

Thompson audit: HPD needs better administration of J-51 tax program

Comptroller Thompson issued an audit finding that the City Department of Housing Preservation and Development (HPD) has deficiencies in its administration of the J-51 Tax Incentive Program.

“All City agencies need to be vigilant in carefully administering their programs and resources, and in this case, HPD fell short, which may impact tax benefits,” Thompson said.

Under the J-51 program it administers, HPD provides tax exemption and abatement benefits to residential property owners who rehabilitate their buildings and owners of non-residential buildings who convert buildings for residential use. HPD  verifies eligibility, determines if work costs are supported, calculates a “certified reasonable cost,” and issues certificates of eligibility.

Auditors found that HPD did not ensure all documentation was submitted and applications for final benefits and subsequent submissions were made on time. As a result, it improperly certified reasonable costs totaling $2.5 million and improperly awarded certificates of eligibility to nearly half the sampled properties. HPD also did not ensure required inspections of J-51 work were adequately conducted. An inspection of a Queens site found that 1,695 new windows had been installed that  leaked excessive air through window seals, yet HPD’s inspector validated the work.

Among his recommendations, Thompson advised that HPD ensure staff are instructed in program policies and rules, and adhere to procedures for approving certificates of eligibility; process applications and award certificates of eligibility within the five-month time frame; and ensure inspections are conducted promptly once applicants submit all required paperwork.