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Construction
New York

Development slows decisively in Manhattan, and 30% citywide

Filings for new housing plunge, REBNY report finds

Housing Construction Filings in Manhattan, NYC Plunge
REBNY’s Jim Whelan (REBNY, Getty)

Warnings of a Manhattan construction crisis are being born out by the numbers.

In the first half of the year, only 13 multifamily building permits were filed in the borough, the Daily News reported, citing a Real Estate Board of New York report. Just 21 building permits were filed overall.

Not since 2010 have so few first-half filings been recorded in Manhattan. The 10 filings in the second quarter represented a mere 3 percent of the city’s total.

Citywide, filings in the second quarter were a tad higher than in the first quarter, but were down year-over-year in every borough and 30 percent overall.

The 374 projects filed in the second quarter will not make much of a dent in the city’s housing shortage. Only 55 were for multifamily projects, totaling roughly 3,100 apartments, down 60 percent from a year ago.

The declines were expected, given the expiration of the 421a tax incentive in June 2022 and the 2026 completion deadline for pre-qualified projects to actually receive the tax break, without which rental projects typically cannot get financing.

“The lack of an incentive tells almost the whole story,” REBNY executive Zach Steinberg told the News.

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Gov. Kathy Hochul last month announced a 421a alternative for Brooklyn’s Gowanus neighborhood. It’s not clear how many developers will seek it or if it will be expanded to other areas.

Queens had the most building permit filings in the second quarter with 131 — still a 26 percent drop year-over-year. The starkest decline came in the Bronx, where the drop was 3 percentage points worse than in Manhattan.

Politicians have set lofty goals for home construction. Gov. Kathy Hochul proposed a plan that she said would add 800,000 in 10 years, but legislators rejected it. Mayor Eric Adams set a “moonshot” goal of 500,000 new units by 2032, but did not lay out a plan to add that many, noting that achieving it would require action by the state.

While aspirations are lofty, results have not been.

“As the data shows over a long period of time, we’re just at low numbers and we’re not building nearly enough housing,” Open New York policy director Andrew Fine told the News.

— Holden Walter-Warner

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DevelopmentManhattanMultifamily Real EstateREBNY