Is NYC’s housing engine finally restarting? New residential permit filings jump in second quarter

The 485-x Affordable Neighborhoods for New Yorkers Tax Incentive, as it’s officially known, launched in January. It replaced the 421-a incentive, which expired in June 2022. 

The city has a long way to go to meet the mayor’s “moonshot” goal of 500,000 new residential units by 2033. “Multifamily construction activity continues to lag significantly, and this report shows a persistent lack of larger projects over 100 units, particularly within the 485-x construction wage zones,” a REBNY spokesperson said in a statement. REBNY is calling on city and state officials to take further steps to spur residential construction of all sizes.

“ I think the good news is that everyone is talking about housing,” said Carlo Scissura, president of the New York Building Congress, and organization that advocates for the construction industry. “Everybody, including a Democratic nominee for mayor, has made housing the top priority. So that's a big win for New Yorkers.” 

Scissura sees this as a start, but believes the real estate industry needs more changes before it’s firing on all cylinders. “I think 485-x may need a bit of a fix in the next legislative session,” Scissura said. “I think we're going to talk to folks in the fall about what's working and what's not working with 485-x and then we'll come back to Albany with some ideas about how to get it to where folks will want to build housing.”

In a statement, Building and Construction Trades Council of Greater New York President Gary LaBarbera cried foul. “If this is becoming the trend, it is clear that these developers are trying to unashamedly circumvent the law to avoid paying hardworking New Yorkers the fair and family sustaining wages they deserve,” LaBarbera said. He charged that real estate developers are primarily focused on enriching themselves. “Their feigned concern about building more affordable housing is just a ruse considering they only support these projects when they receive public subsidies and if they aren’t required to pay sufficiently for labor.”

While it’s too soon to say whether this is the beginning of a sustained trend, city officials are happy to see the needle moving in the right direction after years of decline and stagnation. Housing and Preservation Department acting Commissioner Ahmed Tigani said developers are still analyzing 485-x, along with other programs aimed at spurring construction, to see how they can maximize the benefits. “ We believe that data is trending in the right direction,” Tigani said. “But especially for your larger projects, your more complicated projects where people are reassessing both the lending options and market pieces of this - labor costs, supply costs - all of this is still being calculated.”

Few new permits were for buildings larger than 99 units. Tigani thinks at this early stage of the 485-x program the minimum wage requirement is just one of several project components impacting decisions. “I don't think that this is an indication yet of any particular factor, and how it's weighing in on it.” He’s hopeful that 485-x combined with other policy changes may set off a new era of growth. Under the mayor’s Citywide Housing Action Task Force, the agency is looking far and wide at city-owned properties that could be redeveloped for housing. “We look not only at parking lots. We look at existing community facility buildings. We look at empty land that happens to be in the city's possession and we're developing sites,” Tigani said. 

In the second quarter of 2025, permits were issued for only four buildings with more than 150 residential units. Those projects – located in Brownsville, Brooklyn, West Farms in the Bronx, on Frederick Douglas Boulevard in Harlem and Jamaica Avenue in Queens Village – are all in specially zoned areas outside of the minimum wage requirement.