In 2023, housing production in New York City slowed dramatically. According to a new Real Estate Board of New York report, developers filed 285 multi-family foundation plan applications with just 9,909 apartments proposed, a 78 percent drop in total unit filings from 2022 when there were over 45,500 units proposed. The number of dwelling units proposed last year is 50 percent of the roughly 20,000 units produced per year between 2000 and 2020. REBNY blames the expiration of the 421-a tax break for the major decline.
The report examines multi-family foundation filings rather than new building filings, which precede foundation filings by several months or longer. Foundation applications show construction is imminent and provide a more detailed picture of development in the city.
The number of filings has continued to drop since June 2022, when the 421-a tax abatement expired without a replacement program, REBNY said. The tax break incentivized developers to build multi-family apartment buildings. With the 2024 legislative session now underway, housing advocates and developers hope an agreement among state lawmakers on a housing plan, including a 421-a replacement, is possible.
“Without support for new development incentives, New York City finished 2023 well behind its yearly goals for new rental housing,” Zachary Steinberg, REBNY Senior Vice President of Policy, said in a press release. “Hopefully this is the year that State lawmakers take steps to reverse this trend with sensible, data-driven housing policies.”
According to the report, December saw just one filing for a new building with more than 100 residential units. The supportive housing project at 3663 White Plains Road in the East Bronx accounted for 136 proposed units or 27 percent of all units proposed that month. In 2023, there were just 28 filings for buildings with 100 or more apartments, down from 129 filings in 2022.
Hochul this summer announced several executive orders aimed at spurring residential construction, including allowing developers of certain residential buildings in Gowanus to qualify for a tax break with benefits similar to 421-a.
Mayor Eric Adams is pushing his “City of Yes for Housing Opportunity” plan that could create 100,000 new apartments over the next 15 years by updating restrictive zoning rules. The plan is one part of the mayor’s “moonshot” goal of delivering 500,000 new homes over the next decade.
However, the number of units proposed in 2023 is just 20 percent of the administration’s 50,000 per year goal, according to the report.
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