The Invisible Engine 2025

With eight million people across the five boroughs, and six percent of Americans residing in the larger metro area, New York City is a powerhouse of the region, the country, and the world. Be it a company, resident, student, or tourist – people want to work in, live in, and visit New York City. Funding the services and programs that draw businesses and visitors to the city requires a reliable and diverse tax base.

The real estate sector remains the invisible engine of New York City’s tax base. Real estate related taxes (RERT) provide more than a third of the city’s tax collection, and on average about half of locally gathered tax revenue. New York City’s $110 billion budget has nearly doubled since 2010, and tax revenue from RERT has kept pace. This steady contribution is critical considering how much state and federal tax grants can fluctuate.

RERT are comprised of property assessment levies, mortgage and recording taxes, hotel occupancy taxes, and fines and fees that come from permitting and filing processes.

RERT is by far the largest source of city tax revenue, accounting for 49% of locally gathered revenue in 2024, and is expected to reach 50% (again) in 2025. Total tax revenue from RERT totals $37 billion just in 2024 alone.

The sector doesn’t only fund the budget and general fund - it also powers the MTA. With congestion pricing facing federal opposition, and other sources of funding unclear, real estate is foundational to funding the MTA’s operating budget and Capital Improvement Plan. New York City doesn’t run without the subway, and the subway cannot run without real estate.

Additionally, real estate is one of the largest and most reliable pathways for non-college-educated New Yorkers to secure stable, well-paid employment. Whether it is building service workers, construction supervisors, property managers, or architects, these workers ensure that buildings are safe and functional for the millions of residents and workers flow in and out every day.

Despite the economic trauma wrought by the pandemic, real estate is still the financial bedrock of the city's economy. This report lays bare the outsized role that the industry plays in keeping New York City running.