- Of 152 newly registered 485x projects, 20 contain exactly 99 units and only one is larger, a 560-unit Astoria building, according to a preliminary analysis of the city’s latest data.
- Wage and affordability requirements jump at 100 and 150 units, and one slide pegs yield on cost at 6.1% for 99 units versus 5.2% for 150, pushing developers under the threshold.
- Buildings of 100-plus units were 56% of new units under 421-a but just 9% of 485x registrations, so the state legislature faces pressure in January to change the program.
Fresh 485x filings show New York developers are still stopping at 99 units, even where zoning would allow far larger buildings, per early analysis of city figures reported by The Real Deal.
Latent Urban Ventures CEO and founder Nate Bliss found that among 152 newly registered projects, 20 hold exactly 99 units while just one goes bigger.
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The Latest Numbers
That outlier is a 560-unit Astoria project at 35-10 Steinway from BedRock Real Estate Partners and LMXD, The Real Deal reported. Counting every registration so far, 49 projects sit at exactly 99 units and four exceed it.
The Bronx leads with 67 of the 152 new projects, ahead of Brooklyn (51), Queens (28) and Manhattan (six). The release was the last before lawmakers in Albany return in January, per The Real Deal.
Why 99 Is the Magic Number
Per The Real Deal, wage and affordability obligations climb once a building reaches 100 or 150 units. Projects of 100-plus must reserve 25% of residential space for affordable rents, compared with 20% for smaller ones.
Developers also fear that a failed audit above 99 units could wipe out the full abatement. Bliss told The Real Deal that compliance rules and the tax clawback weigh as heavily as labor costs.
Meridian Investment Sales’ Helen Hwang prepared a slide showing projected yield on cost of 6.1% for a real 99-unit deal versus 5.2% had it reached 150 units, according to The Real Deal.
The Workaround
Roughly a dozen developers get around the cap by grouping 99-unit buildings on one site, The Real Deal reported, and a recent filing lists 10 neighboring towers each just shy of 100 units. We covered a Bronx developer who split 166 units into a pair of 485x twins.
YuhTyng Patka, a partner at Adler & Stachenfeld, told The Real Deal that 485x rewards inefficiency, because added elevators and lobbies eat floor area that could house residents. To use the full buildable area under the cap, developers also build bigger apartments and charge more, per The Real Deal.
Why It Matters
Under the earlier 421-a program, buildings of 100-plus units delivered 56% of new homes from 2010 to 2020, The Real Deal reported. The four big 485x projects make up only 9% of registered 485x units.
REBNY President Jim Whelan said in a statement, per The Real Deal, that the program is not delivering the large-scale housing the city needs. REBNY’s second-quarter filings, which we covered, counted only nine of 172 planned buildings at 100-plus units as multifamily construction falls.
What’s Next
When Albany reconvenes in January, lawmakers could alter 485x or create a separate program for large projects, The Real Deal reported. Backers of changes are bringing the data to City Hall, because winning over legislators will probably require City Hall backing.
Deputy Mayor Leila Bozorg said at The Real Deal’s New York Forum in May that the program needs more time, and Housing Commissioner Dina Levy said at the same event that she wanted to see detailed underwriting from developers. The Building and Construction Trades Council has urged lawmakers to close the clustering loophole, though The Real Deal reported that change looks unlikely.
