boweryconstruction.jpgThe number of residential construction permits issued by the Dept. of Buildings in the first quarter of 2008 declined by 46% from the same period in 2007, indicating that the construction boom that has gripped the city over the last several years may be coming to an end. The decline was citywide, with fewer permits issued in all five boroughs, although the sharpest decrease occurred in the Bronx.

Developers told Crain's New York Business that there were three salient reasons for the drop in permits. First and foremost is the credit crunch that's making it more difficult for individual home buyers to get mortgages. Without firm pre-commitments from buyers, developers find it almost impossible to get financing from banks for building projects. Also accentuating the decline is that 1997 reached the second highest level of unit permits issued since 1965. 1997 was the third consecutive year that more than 30,000 residential unit permits were issued in NYC. And that peak in permits last year, may have been due to the imminent end of a tax abatement program that required foundations to be in the ground by June 30th.

A decline in permits, of course, is a bellwether for a drop in real estate sales and the tax revenue they generate for the City.

Bowery Construction, by Gamma Blog at flickr