The Port Authority of New York and New Jersey recent annual report noted that the rate of private job creation in 1999, 2.8 percent, was the strongest in 15 years for the greater New York City metropolitan area and northern New Jersey. For the 12 months ending in August 2000, employment growth slowed from that pace. New York State increased by 117,400 jobs, or 1.3 percent, and New York City increased by approximately the same rate. New Jersey employment increased by 48,700, or 1.2 percent, during the 12-month period. The unemployment rate in the region has continued to decline. The rate in New York State as of August was 4.5 percent, down from 5.2 percent in August 1999. New York City’s unemployment rate was 5.8 percent in August 2000, down from 6.7 percent; the rate in New Jersey was 4.0 percent, down from 4.7 percent.

Construction spending in New York City is expected to total $16.4 billion in 2000, an increase of 38 percent over 1999, according to a study commissioned by the New York Building Congress. Employment in the construction industry will exceed 120,000 jobs in 2000, up from 113,000 in 1999. Residential construction will add 16,000 housing units in 2000, up 25 percent from 1999.

New York City’s rebounding economy is resulting in a shortage of office space both in Manhattan and in the outer boroughs. Office vacancy rates have fallen below 4 percent. According to Williams Real Estate Company, the average annual asking rent in Manhattan in the second quarter of 2000 is more than $54 per square foot, up 35 percent from a year earlier. In midtown Manhattan, only 9 percent of office space has asking rents of less than $50 per square foot. The shortage is posing a serious challenge to the city’s ability to retain existing companies and attract new business. High rents and limited supply have contributed to a very strong commercial market in northern New Jersey, and Jersey City in particular. There has been little new office construction in New York City, largely because financial institutions still have memories of the failure of a number of speculative office buildings in the 1980s. Arthur Andersen recently entered into an agreement with a developer to build a 47-story, $600 million skyscraper that would be the latest new office tower in Times Square.

IBM announced that it would spend $2.5 billion to build a technically advanced computer chip factory in Dutchess County, which is expected to create 1,000 jobs. This factory would represent the largest single investment made by a business in New York State and the largest in IBM’s history. General Motors will be building a $500 million, high-technology engine manufacturing plant at its complex in the Buffalo suburb of Tonawanda, saving 600 jobs through the largest private-sector investment in western New York in many years.

Building permits in New York and New Jersey totaled 57,754 housing units during the first 9 months of 2000, which is virtually unchanged from the same period in 1999. New York issued multifamily permits for 15,755 units, up 28 percent compared with the first 9 months of 1999. Multifamily permit activity rose 31 percent during this period in the New York City metropolitan area. Together, shortages of labor and buildable sites restrict homebuilders in downstate New York and northern New Jersey.

Existing home sales as of the third quarter of 2000 were down 1 percent from the very strong sales in 1999, according to data from the New York State Association of REALTORS®. Median sales prices have increased more than 10 percent in the Albany, Nassau-Suffolk, and New York metropolitan areas. As of the third quarter, the NAR reported a median sales price of $214,800 in the Nassau-Suffolk area. The NAR® also reported that as of the third quarter, existing home sales in New Jersey fell 3 percent. Double-digit increases in the median sales price were reported in most of northern New Jersey.

The Hallmark, a new, 217-unit luxury building for the elderly in Manhattan, the first developed specifically for that purpose, opened recently in Battery Park City. All but 20 apartments will be for congregate living. The remaining 20 units will be for residents in need of personal care assisted-living services. Total monthly charges for the congregate units will start at $3,900 for a studio apartment. In North Bergen, New Jersey, where there has been limited development on the Hudson River shoreline, the first of two 12-story luxury buildings of a 507-unit development known as Half Moon Bay is nearing completion. Rents will start at $1,600 for a 750-square-foot, one-bedroom unit and go as high as $4,700 for a 1,500-square-foot, three-bedroom unit.

Spotlight on Monmouth-Ocean, New Jersey

The Monmouth-Ocean metropolitan area stretches from just south of Staten Island to within 5 miles of Atlantic City. The area is linked to northern New Jersey and New York City by commuter rail. Since 1990, the population of the area has increased by 12 percent to slightly over 1.1 million.

Nonfarm employment in the area grew less than 1 percent, to 506,100, in the 12 months ending August 2000. The majority of job growth has been in business services, retail trade, and recreational services. The August 2000 unemployment rate was 3.7 percent, down 0.6 percent from August 1999. Three of the area’s largest employers, Fort Monmouth (U.S. Army), AT&T, and Lucent Tech-nologies, which together employ slightly over 15,000 people, are located in northern Monmouth County.

The market for sales housing in the Monmouth-Ocean metropolitan area has been very active. Data from the New Jersey Board of REALTORS® indicate sales of existing homes in the first half of 2000 were up 10 percent to 7,338 homes. The median sales price in Monmouth County during the first 6 months of 2000 was $171,000, a 5-percent increase over the comparable period in 1999. During the same period, the median sales price in Ocean County declined 2 percent to $113,500. For the first 9 months of 2000, building permits were issued for 5,319 single-family homes, a 1.1-percent increase over the comparable 1999 period. The most active areas for new development are the towns of Freehold, Howell, Jackson, and Manalapan. New homes, typically with four bedrooms on a quarter-acre lot, start at $275,000.

The rental housing market is quite tight, with apartment vacancy rates in the 2- to 3-percent range, according to local rental agents. The area has had a relatively small volume of rental housing production, averaging less than 250 units annually from 1990 through 1998. In 1999, however, multifamily building permits totaled 472 units, and in the first 9 months of this year, permits were issued for 767 units. New rental construction has been primarily in Lakewood and Wall townships. Contract rents for newly completed rental units start at $750 for a one-bedroom unit and $835 for a two-bedroom unit. A significant part of the increase in multifamily building activity during the past 2 years has been the result of the development of a continuing care retirement community in the area. In the first 9 months of this year, a 152-unit multifamily project in the community was the largest single project in the metropolitan area. When completed, the retirement community will have more than 1,500 units.

Housing in adult-only and retirement communities is a substantial part of the housing inventory in Ocean County. As of June 2000, the Ocean County Department of Planning reported a total of 56,500 such housing units in the county. The Monmouth County Planning Board reported that within the county there are 16 such communities, with 8,250 units total. Most of the units in these developments are owner occupied. The development of assisted-living communities has increased significantly. The New Jersey Department of Community Affairs reports that there are 1,338 assisted-living units under construction and 725 units in the planning stage in the Monmouth-Ocean metropolitan area.