Multifamily project filings in New York City last quarter spiked in one building size category.
Can you guess which? That’s right — those with 50 to 99 units, according to the Real Estate Board of New York’s quarterly report.
The number of planned units (2,606) in such buildings was more than twice as high as the norm since 2008.
The likely reason: Projects that would have been 100 or more units in the 421a era are being downsized to avoid the wage floor of the successor tax abatement, 485x.
More evidence of the trend is that filings for projects of 100 or more units plummeted. Only one project of 100 to 149 units (129 apartments, to be exact) was filed. In a typical quarter, before 485x, there would be about 10.
In all of 2023, just 30 filings were for multifamily projects of 50 to 99 units. Last quarter alone, there were 27.
Seven of them had exactly 98 or 99 units, two more than in all of 2023. One caveat is that 2023 was a down year because the state had not yet extended the completion deadline for 421a projects.
To be sure, large project filings did not disappear last quarter. In fact, 10 projects of 150 or more units were filed. That was “only” 22 percent below the historical average. Down is the new up!
But the filing of 10 large projects doesn’t mean 485x is starting to work. Some, perhaps most, are projects not intending to use 485x, such as subsidized affordable housing or developments on sites that qualified for 421a before the tax break expired.
For example, Alloy Development’s 725-foot skyscraper One Third Avenue, at 376 Schermerhorn Street in Brooklyn, was the largest first-quarter filing in the city with 583 units. It’s not using 485x. Instead, Alloy will make payments in lieu of taxes, or PILOTs. The firm expects to land a construction loan this summer.
The largest Bronx filing of the quarter, Camber Property Group’s 1850 Lafayette Avenue, was in the works well before 421a expired in June 2022. The largest Manhattan filing, the Wilf family’s 508-foot tower at 185 East 80th Street, is slated to have only 66 units.
Other large filings might be theoretical 485x projects that don’t have a construction loan and will never get one.
But even if evidence is scant that 485x will produce enough housing, project filings in the first quarter of 2025 were robust. The upshot was 58 percent more planned apartments — 6,871 — than the city has historically seen in first-quarter filings.
That’s an annual pace of just over 27,000 units, which is at the high end of the range of the city’s actual year-by-year production in the past six decades.
However, it’s not enough to make much of a dent, or any dent, in the city’s housing shortage, given the continued strong demand to live in the five boroughs.
To achieve that, various reports have called for 50,000 units per year over a decade — a number that was last reached in the early 1960s and increasingly appears to be unreachable without lowering the 485x wage floor for large projects.
The legislative obstacle to that is organized labor. Construction unions, which advocated for the wage floor and got it in 2024, have stood behind it, despite the plethora of 99-unit projects.
Read more
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