REBNY: Development of NYC Multifamily Supply "Anemic"

A new multifamily foundation plan application report for January from the Real Estate Board of New York (REBNY) shows what the group says is “an anemic outlook” for new NYC housing development in 2023 amid an ongoing supply crisis.

REBNY has introduced the new report—tallying the number of projects, and their size, that are taking the first step in the construction process—as a supplement to its Construction Pipeline Report, which tracks new building job filings for all new projects, including office, retail, hospitality and multifamily.

“These job filings typically occur well before any substantive development work has started and many additional steps such as financing, plan review and amendments will still need to occur,” the board explained. “By providing additional perspective on how many multifamily projects have filed foundation applications, [the report] provides a more substantial projection for housing production.”

Foundation plan filings in the first month of 2023 show a continuation of a sharp drop-off in new construction during H2 2022, according to REBNY’s first foundation plan report.

The first half of 2022 showed a surge in multifamily foundation filings in NYC, many of them spurred by the June expiration of 421a tax incentives. The foundation filings tailed off to 186 in H2 2022, dropping to 22 in December.

January came in at 26 filings, a slight uptick in the total that is less than the sum of its parts: only one of the projects was larger than 100 units, a drop from four large project filings in December.

REBNY noted the 26 foundation plans—the first step in the construction process—is far behind the pace needed to address NYC’s housing supply crisis.

“With 560,000 new housing units needed by 2030, this report highlights the significant housing supply challenges facing New York City,” REBNY’s report said.

As part of her executive budget released last month, Gov. Kathy Hochul proposed extending the construction deadline for NYC projects that raced to qualify for the now-expired 421a tax exemption by completing foundation elements by June 15, 2022.

The projects still need to finish construction by June 2026 to actually get the lucrative property tax break. Hochul wants to extend the construction deadline by four years, citing pandemic-related delays to construction schedules.

NYC developers have argued that the 2026 deadline imperils scores of apartment projects, including a number approved through recent rezonings.