NYC On The Verge Of A Construction Boom As Permit Filings Spike
New building filings surged in the first quarter of 2026 as New York City officials have scurried to find ways to address the housing crisis.
Developers sought permits to build 21.2M SF across 577 new projects, a 74% year-over-year jump and far above the average pace of construction over the past two decades, according to a report by the Real Estate Board of New York.
Nearly half of the proposed buildings were multifamily, with permits filed for more than 16,800 units across 281 developments. That’s a 251% spike from the overall average in units since 2008.
The figure may be a relief for government officials. In 2022, then-Mayor Eric Adams set a goal of producing 500,000 new housing units over the next decade, equivalent to 12,500 units per quarter. Due to consistent underproduction, developers now need to complete an estimated 13,147 units per quarter to achieve the city’s target.
Median monthly rents in Manhattan in April exceeded $5K for the first time, making rental apartments lucrative for developers — if they can find ways to make projects pencil.
The majority of new developments span fewer than 99 units as a result of labor wage requirements under the 485-x tax incentive. The real estate industry has criticized the abatement, claiming that the mandates are restricting their ability to build projects at larger scale, which they argue is necessary to solve the housing crisis.
Some developers have opted not to tap into the tax abatement or build smaller, individual buildings on adjacent lots to dodge the requirement.
In the first quarter, 164 new building filings were for 50 units or fewer. Another 92 were for between 50 and 99 units. Higher wage requirements kick in for buildings with 100 and 150 units or more. As a result, there were just 11 filings for projects between 100 and 149 units and 14 for 150 or more.
The 14 projects with more than 150 units will deliver nearly 5,500 units combined, 28% above the historical average recorded since 2008. Of those, six are in the Bronx, five in Manhattan, two in Brooklyn and one in Queens.
Queens accounted for the most new building filings overall, with approximately 27%, followed by Staten Island with 26%, Brooklyn with 21% and the Bronx with 19%. Manhattan had the fewest filings, with 41, or 7%, although it accounted for nearly 38% of proposed square footage.
Developers in the outer boroughs have benefited from lower land costs and various upzonings, including through City of Yes. Some less-sought-after areas, deeper into the outer boroughs, aren’t subject to strict 485-x wage requirements, allowing larger projects to move forward.
In its report, REBNY says the construction rebound should be viewed in the context of the expiration of the 421-a tax incentive, which has resulted in a “yo-yo” effect.
On a rolling four-quarter basis, proposed construction increased by 35.3M SF, or 92%, in the year leading into the 2022 expiration of 421-a. It then fell by 40.2M SF, or 55%, in the year after.
Certain deadlines were extended to limit the gap in housing production. However, 421-a’s less generous replacement, 485-x, wasn’t passed until April 2024, when it was included as part of the 2025 fiscal year budget.
After notable increases in filings in the third and fourth quarters of last year, this is the first time Q1 filings have been on par with 2022 levels.
In its report, REBNY says the data is “not yet indicative of a sustained return to record highs.” Still, additional proposals at the city and state levels aim to further stimulate new development.
New York stands in stark contrast to the rest of the country, which experienced an apartment building boom coming out of the pandemic, keeping rents flat or down as the new supply is absorbed. As a result, apartment starts nationwide hit a 15-year low in the first quarter, according to CoStar data.
