REBNY Says NYC's Rental Housing Construction Fell By 68% In Q3
Economic uncertainty is already negatively affecting New York City’s future housing supply, stirring up fears that the city’s current housing crisis could stretch far into its future.
A new report from the Real Estate Board of New York found that construction proposals for rental housing in the five boroughs fell by 68% between the second and third quarters this year, with just 3,346 multiple dwelling units proposed.
Brooklyn accounted for 37% of new proposed rental housing construction in Q3, while Queens and the Bronx accounted for 29% and 27%, respectively, and Manhattan saw just 7% of the proposals.
While the first and second quarters saw a wave of new applications before the expiration of the 421-a tax abatement in June, the data suggests deeper trends at play. Q3 2022 was also 46% below the third quarter of the previous year and was lower than the overall median and quarterly average since Q1 2008, during the Great Recession.
The quarter’s largest proposed developments in Brooklyn and the Bronx were residential developments: a church-owned, 14-story rental building at 2797 Atlantic Ave. in East New York, per The Real Deal, and a Tishman Speyer-owned, eight-story affordable development at 171 West 239th St. in Kingsbridge according to New York YIMBY.
But the largest proposals in Queens and Manhattan were for industrial and commercial space, New York YIMBY previously reported. Andrew Chung's Innovo Property Group filed a proposal for a six-story manufacturing space at 28-90 Review Ave., a vacant lot in Long Island City, and Boston Properties’ 49-story commercial tower at 343 Madison Ave. was Manhattan’s biggest proposal.
NYC is still growing, exacerbating the severity of its housing shortage. According to REBNY, the city needs to build an estimated 560,000 new units by 2030 to keep pace with projected growth. Affordable housing in particular is in short supply, with especially low numbers of new affordable developments in Manhattan, Queens and southern Brooklyn.
“The results of this report should concern all New Yorkers, as the construction sector has a diverse impact across our economy,” REBNY Senior Vice President of Policy Zachary Steinberg said in a statement. “We face a severe housing shortage that is only getting worse.”
Overall new building filings were 27% below the overall median and 30% lower than the quarterly average since Q1 2008.
Total proposed construction square footage also shrank. The third quarter saw 6.4M SF of proposals, 57% lower than the previous quarter and 20% lower than a year ago. The quarterly average since Q1 2008 was 45% higher than Q3 2022, according to REBNY.
“The decline in planned multiple dwelling unit production is extremely concerning,” New York Building Congress President and CEO Carlo A. Scissura said in a statement. “We must find ways to encourage the development of new housing that immediately supports good-paying construction and building jobs, as well as the infrastructure to support a growing workforce for a wide range of employers over the years to come.”