Rezonings Fuel New York’s Biggest Housing Push in Decades
Record apartment deliveries are helping ease supply pressures, but experts say the city still needs much more housing.
Nina Dale
June 16, 2026
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Good morning. New York City is experiencing its strongest apartment development cycle in over 60 years, driven largely by rezonings and affordable housing requirements. While construction activity is accelerating, experts estimate the city must build even more units to close its housing gap.
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Market Snapshot
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Supply Race
NYC Apartment Construction Reaches a 60-Year High
Despite vacancy rates below 2% and some of the nation’s highest development costs, New York City is experiencing its strongest apartment construction boom in decades.
By the numbers: The city completed 38,682 housing units in 2025, up from 33,859 in 2024 and the highest annual total since 1965. It was also the second consecutive year with more than 30,000 units delivered.
National leader: New York led the U.S. multifamily market with 43,000 units under construction in the first quarter of 2026, according to CoStar, even as apartment starts nationwide fell to their lowest level since 2011.
Rezoning impact: Neighborhood rezonings in Gowanus, Jamaica, Long Island City, and Prospect Heights have helped unlock new development opportunities by allowing greater residential density.
Brooklyn and Queens surge: Together, the two boroughs added more than 18,000 multifamily units in 2025. Industry experts say rezonings are expected to pave the way for roughly 50,000 new units citywide in the coming years.
Affordable housing component: New developments tied to rezonings are required to include affordable housing. Projects such as 544 Carroll Street in Gowanus and The Jasper in Long Island City set aside 25% and 30% of units, respectively, as affordable.
Challenges remain: Despite the recent momentum, experts estimate New York City needs to produce 50,000 to 60,000 units annually to meaningfully address its housing shortage and avoid a projected deficit of 500,000 units by 2034.
Policy debate: Industry leaders are calling for additional rezonings, zoning incentives, and streamlined approval processes to sustain development activity. Some developers also argue that changes to the current 485-x tax incentive could encourage more large-scale projects.
➥ THE TAKEAWAY
What comes next: New York City’s construction boom shows that rezonings and development incentives can unlock significant housing production. However, maintaining this pace—and closing the city’s housing gap—will likely require additional policy support, faster approvals, and continued efforts to create new development opportunities across the five boroughs.
Around New York
➥ NYC rents hit a record high in May as a severe housing shortage and shrinking inventory continued to fuel competition, outweighing the modest impact of the FARE Act.
➥ EliseAI is expanding its New York office footprint again shortly after a 109,000 SF lease, highlighting AI firms’ growing role in the office leasing recovery.
➥ Baker Tilly is relocating its U.S. HQ from Chicago to NY, a move tied to its acquisition of Manhattan-based accounting firm Anchin, Block & Anchin.
➥ ZD Jasper Realty’s 182-unit Paragon condo project is converting a former Long Island City paint factory into a luxury tower with family-focused amenities.
➥ France’s Junk Smash Burgers is making its U.S. debut with a 2,150 SF flagship location in SoHo, marking the brand’s first American expansion.
➥ Summit Properties will forgive unpaid rent balances for tenants across more than 5,000 former Pinnacle Group rent-stabilized apartments, marking a major win for tenant advocates.
➥ NYC leaders are seeking $60M to redevelop three library sites into modern facilities paired with hundreds of affordable housing units across the Bronx, Brooklyn and Queens.
➥ Brooklyn Defender Services signed a 212,000 SF lease for its new headquarters at The Wheeler, bringing Tishman Speyer’s downtown Brooklyn office redevelopment to full occupancy.
Follow the Money
| OFFICEMIDTOWN David Werner Real Estate acquired Midtown Manhattan’s One Dag office tower for $270M, securing the asset at a discount of more than $330M from its previous purchase price. |
| MULTIFAMILYNEW YORK CITY Property taxes on New York City’s rent-stabilized housing are rising faster than inflation, adding strain to aging affordable apartment buildings, according to a new report. |
| RETAILUPPER WEST SIDE Related Companies and its partners are exploring a sale of the Shops at Columbus Circle that could value the prime Manhattan retail property at about $450M. |
| MULTIFAMILYBROOKLYN & BRONX Five NYC ZIP codes—led by neighborhoods in Brooklyn and the Bronx—have seen rents jump more than 50% since 2020 as affordability pressures and limited housing supply reshape the market. |
| OFFICEFINANCIAL DISTRICT The Chetrit Group has fallen behind on debt tied to Manhattan’s landmark 26 Broadway office tower, putting the property at risk as occupancy declines and operating costs surge. |
| EDUCATIONBRONX NYC Public Schools signed a long-term lease to build a 54,200 SF STEAM Center in the Bronx, creating space for more than 700 students. |
| CONVERSIONSNEW YORK New York’s 485-x housing incentive is generating limited new construction, while the 467-m tax program is fueling a wave of office-to-residential conversions across the city. |
📈 CHART OF THE WEEK
Westchester County’s office market returned to positive absorption in Q1, adding nearly 49K SF after a negative prior quarter. At the same time, availability fell to 20.7%, reflecting stronger leasing momentum and improving market fundamentals.
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