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New York City expected to significantly increase healthcare construction following pandemic

For the next three years, every borough except Staten Island is expected to have an increase in spending.

Mallory Hackett, Associate Editor

Between 2020 and 2023, the New York Building Congress anticipates total spending on construction for the healthcare sector to increase by 38%, to exceed $9.4 billion during that period, according to a recent report.

From 2016 to 2019, New York City spent more than $6.8 billion on healthcare construction. For the next three years, every borough except Staten Island is expected to have an increase in spending.

The largest growths are expected to occur in the Bronx and Brooklyn, which are both projected to more than double their healthcare-construction spending. During the forecasted period they could spend over $660 million and $2.3 billion respectively.

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Manhattan, which previously spent the most on construction, is expected to continue to lead the boroughs in spending. Between 2020 and 2023 the Building Congress says Manhattan could spend more than $5.5 billion.

WHY THIS MATTERS

The New York Building Congress attributes the increase in construction spending to the pandemic.

"Although construction spending is subject to a myriad of factors, the Building Congress anticipates spending will increase as hospitals and healthcare providers adapt to the next normal and prepare for a potential resurgence of COVID-19," the report said.

The Congress members anticipate exact estimates on spending to vary depending on the distribution of future federal aid, the strength of the economy, the financial outlook for individual healthcare institutions and the development of COVID-19.

The report also outlines some of the ways that the pandemic will alter the way medical facilities will be built from now on. It says that hospitals will need space for more beds with ICU capabilities, flexible patient capacity, additional power and emergency power sources, ways to separate patients, additional entrances and exits, and updated ventilation and air filtration processes.

THE LARGER TREND

New York City has been an epicenter for the coronavirus, with more than 200,000 cases, 55,000 hospitalizations and 18,000 deaths, according to the New York City Department of Health and Mental Hygiene.

As a result, many medical centers were forced to adjust their environments at the start of the pandemic and plan for the future.

"In the first half of 2020, existing facilities were quickly renovated to handle an influx of infected patients, and surge sites were deployed to help ease pressure on hospitals," according to the Building Congress report. "In the following months, healthcare projects already in the pipeline will be built, and new ones focused on pandemic preparedness will form."

These predictions of increased construction spending also follow the positive trend of healthcare real estate investments. This is due in part to loans from the federal government – which require hospitals to maintain staffing levels and continue to pay rent on their buildings.

Twitter: @HackettMallory
Email the writer: mhackett@himss.org