The Real Deal New York

Less than 2,000 new resi units were approved in Q1

Drop-off in permits might be natural result of previous 421a surge
By Ariel Stulberg and Will Parker | April 13, 2016 07:00AM

Source: TRData analysis of DOB permits data

Source: TRData analysis of DOB permits data

The city greenlit less than 2,000 new residential units in the first quarter, a far cry from the nearly 6,500 units approved during the same period last year. That’s according to a new analysis of Department of Buildings records by TRData.

In terms of space, the drop in new construction activity is just as stark. Permits for a total of 2.5 million square feet of space in residential projects were approved in the first quarter, less than half of the 6.65 million square feet of space approved during the same period last year. The low totals likely represent the dearth of new applications filed since the expiration of the 421a tax abatement.

Last year, the second quarter saw the most activity, with a whopping 36,367 units approved for a total of 43.4 million square feet of space, TRData show. At the time, developers and the city scrambled to get their ducks in a row before the abatement was set to expire June 15 (Following the expiration, developers and unions tried to resuscitate the abatement, but talks collapsed in January of this year.) 

Quarterly View of Permits Issued
Q1 2015 - Q1 2016
PeriodResidential UnitsTotal Square Footage
Q1 20156,4668,344,309
Q2 201536,36743,393,979
Q3 20153,8296,653,160
Q4 20159,45411,229,603
Q1 20161,9822,502,952
Source: TRD analysis of Department of Buildings permit data

The drop in activity in the first quarter may also reflect changes in the city’s processing speed, or changes over time in the proportion of applications that are ultimately approved and issued as permits.

Developers and groups that represent them, such as the Real Estate Board of New York, have warned that without 421a or a similar tax incentive, it will no longer be feasible to build mixed-income rental housing in New York. A handful of groups are wrestling with alternatives.