- Multifamily housing permits surged 65% quarter-over-quarter in Q1 2025, totaling 6,871 units citywide—58% above the long-term average since 2008.
- Brooklyn led the boroughs with 3,080 units proposed across 44 buildings; no multifamily units were proposed in Staten Island.
- Developers are targeting smaller buildings—under 100 units—to avoid the costly wage requirements tied to the state’s 485x tax incentive.
- Total construction filings dropped 9% from Q4 2024, but were up 15% year-over-year; proposed SF remains below the long-term average.
Brooklyn Leads as Developers Shrink Project Size
New York City’s multifamily construction pipeline rebounded in the first quarter of 2025, led by a surge in multifamily permits and proposals in Brooklyn, according to the Real Estate Board of New York (REBNY). The city saw 6,871 multifamily units proposed across 123 buildings—marking a 65% increase over the prior quarter, per the Commercial Observer.
Brooklyn accounted for nearly half of the city’s total multifamily pipeline, with 3,080 units across 44 projects. The Bronx followed with 2,358 units, while Queens, Manhattan, and Staten Island trailed behind. Notably, Staten Island saw no new multifamily proposals in the quarter.
Smaller Buildings Dominate
Developers are focusing on smaller buildings—particularly those under 100 units—largely due to the conditions tied to multifamily permits under New York’s 485x tax incentive, which replaced the expired 421a program. While the new law provides tax benefits for affordable housing, it imposes higher wage requirements on projects with 100 units or more.
According to REBNY, 77 of the 123 proposed buildings had fewer than 50 units, and another 35 had between 50 and 99 units. Only a small fraction of proposed developments exceeded the 100-unit threshold.
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Construction Volume Still Lags Historically
While total filings, including multifamily permits, rose 15% year-over-year to 332 projects, they fell 9% from Q4 2024. Total proposed SF across all asset classes reached 8MSF—a 26% increase from the same period last year, but still 36% below the historical average since 2008.
REBNY senior VP of policy Zachary Steinberg emphasized the importance of continued support from lawmakers: “In the face of rising costs and policy uncertainty, it will be critical that state and city policymakers do more to help the housing market continue to rebound in the months and years ahead.”
Why It Matters
The jump in multifamily permit activity signals cautious optimism in NYC’s development pipeline, particularly for affordable housing. But the trend toward smaller buildings suggests that policy design—especially wage mandates and tax incentives—continues to shape what gets built.
Expect more nimble, sub-100-unit projects as developers look to balance opportunity with regulatory constraints in a still-fragile market recovery.
