According to a June 8 press release from The Real Estate Board of New York (REBNY), tax revenue generated from investment and residential sales in New York City and New York State decreased by 76% from May 2019 to May 2020, and 40% from April 2020 to May 2020.
This represents a $145 million revenue shortfall for the City and State year over year, and a $31 million decrease from month to month. Since the arrival of the coronavirus pandemic in March, there has been a decline of more than $160 million in tax revenue.
According to REBNY President James Whelan, “This data confirms the unprecedented economic crisis facing our City and State. Our local economy must reopen in a healthy way. We also need our public officials to put in place policies that will restart such economic activity rather than deepen the crisis. Promoting more real estate sales and transactions will produce the tax revenue the City and State need to pay for vital government services from education to infrastructure improvements.”
Representing a full 53% of the city’s total annual tax revenue, the real estate industry is second only to personal income taxes when it comes to powering New York City’s economy, represented more than half (53%) of the City’s total annual tax revenue, (Personal income tax made up 21% in the last fiscal year). According to REBNY, “The industry employs hundreds of thousands of New Yorkers from building service workers to brokers and generates essential revenue for the City of New York to maintain the salaries of first responders, fund infrastructure improvements and provide for public services like schools, libraries and parks.”
Other findings from the REBNY investment and residential sales report included:
From April 2020 to May 2020, total sales volume declined 26%
From May 2019 to May 2020, total residential sales and transactions declined, resulting in a 53% decrease in tax revenue. This represents a combined loss of $45 million in tax revenue at the City and State level compared to the previous year.
From May 2019 to May 2020, total investment sales and transactions declined, resulting in a 93% decrease in tax revenue. This represents a combined loss of more than $100 million in tax revenue at the City and State level.
REBNY compiles its Investment and Residential Sales Report every month to track both investment and residential sales transactions in New York City and New York State. According to the organization, “REBNY is tracking all revenue generated by each asset class and transaction on a monthly basis to quantify the impact of the coronavirus (COVID-19) crisis on the City and the State’s ability to generate taxes needed for essential government services. The report is an analysis of official data from the NYC Department of Finance’s Automated City Register Information System (ACRIS) and captures total sales volume, number of transactions and tax revenue.”