As rental prices continue to soar in New York City, real estate developers have largely stopped construction of large-scale buildings — potentially worsening the situation for non-homeowners.
According to a new report, released by the Real Estate Board of New York, applications for new multifamily buildings remain near historic lows.
Over the last quarter of 2023, the city saw just 9 applications for buildings with 100-or-more proposed housing units, which marked the fourth-straight quarter where developers filed 10 or less such applications.
Throughout Q4, there were just 4,046 proposed new housing units — which was 16% lower than the average dating, back to 2008.
“The findings affirm what we’ve known for a long time — there’s an ongoing shortfall in the construction of multifamily rental housing, and the need for our leaders to work with the industry on a solution grows more and more urgent,” said Carlo Scissura, the President of the New York Building Congress.
While large-scale building projects have stalled, however, there were signs of life in the construction industry last year.
According to the report, there were 728 new building filings in Q4 2023 — which was actually 48% higher than the per-quarter average since 2008.
Yet those applications were almost uniformly for smaller-scale developments, that would become single-family homes, or two- and three-family buildings. Of the 728 new building permits, 568 were for 1-3 family dwellings — the most of any single quarter since 2008, the report said.
Within that group, 508 of those applications came on Staten Island alone.
Because new applications were heavily skewed towards smaller buildings, and also concentrated family in one borough, the researchers behind the report warn that new construction is failing to meet demand of the general public.
“This data makes clear that New York City is not building the kind of multifamily rental housing needed to address our worsening supply crisis,” said Zachary Steinberg, REBNY’s Senior Vice President of Policy.
The troubling news for renters comes as rents sit around 17% higher than before the pandemic, according to a recent report from the city’s comptroller.
With around 69% of New York households renting their homes, the average asking price for a two-bedroom sits around $3,795, while a one-bedroom is going for $3,272.
Without a major investment in new housing units, those numbers will not see a significant decrease, according to the researchers, who called on state legislators to pass new laws making it easier for developers to construct larger buildings.
“Without policies in place to spur greater rental housing construction, one cannot expect this problem to fix itself. Elected officials in Albany must take action to create new housing that will support our housing market and broader economy,” said Steinberg.