The biggest people in New York housing production are, it turns out, the little guys.
Almost half of the city’s new housing supply last year came from condominium developments of 10 or fewer units, according to Marketproof.
And those numbers will only continue to grow. Analysis of planned developments suggests that in the near future, these small projects will make up more than three quarters of the city’s new housing.
“With the decline of large projects in Manhattan, the rise of boutique condos in Brooklyn became more obvious,” said Marketproof president and CEO Kael Goodman, pointing to some large developers’ shifting their focus to South Florida.
New York’s small condo projects were concentrated in Brooklyn, where 133 are in the pipeline and 264 are already on the market.
A TRD examination of new condominium permits filed in Kings County in the past year found those projects accounted for more than 300,000 square feet of new development. Just about every neighborhood was represented, but three stood out. Borough Park and East New York tied for the most new boutique condo developments with 12 apiece. Greenwood had 11.
“Because land is so expensive in Manhattan, to do something small would also have to be very expensive,” Goodman said. “Price of entry [in Brooklyn] is much lower, which means that the price point of the product can be lower. As Brooklyn continues to develop, that development will move deeper into Brooklyn.”
Not every Brooklyn neighborhood was part of the small condo trend. Brooklyn Heights, Cobble Hill and Gowanus all had no small condo filings in the past year. The first two are pricey areas populated by row houses, and their few empty lots are more likely to be targeted for rentals.
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Gowanus development sites are almost all going to large rental projects under a late 2021 rezoning, although some builders could pivot to condos if they cannot beat the mid 2026 construction deadline to qualify for the 421a tax break.
Below-the-radar builders are behind the development brigade. TRD’s analysis of new building permits showed that the vast majority of filings were from relative unknowns with at most one other project in the pipeline.
Small developers have been on an upward trajectory for a decade or more, said Goodman. He expects the trend to continue.