In July, zero buildings and zero units were approved for construction in Manhattan, and only 10 buildings and 279 units were approved for construction across New York City. Manhattan’s president, Mark Levine, highlighted this as a crisis and expressed the need to address the issue.
The decline in approvals isn’t attributed to seasonality, as data from previous years show more new unit approvals. The likely reasons for this decline are high-interest rates and the expiration of the crucial tax incentive program 421a, which provided tax breaks to developers who included affordable units in their projects and ended in June 2022, making financing for multifamily projects more challenging.
A few efforts were made to replace or extend the program, like the last alternative program in Brooklyn’s Gowanus neighborhood, launched by Governor Kathy Hochul. However, its impact and potential expansion are still being determined.
It has to be remembered that the housing shortage has led to ambitious goals, such as Hochul’s 800,000-unit housing compact and Mayor Eric Adams’ goal of 500,000 units by 2032. Speaking about that, Levine also released a report identifying 171 development sites that could create 73,000 housing units, including vacant lots, gas stations, and parking garages. The issue is real, and everybody knows it needs to be addressed. Now is the time to find ways to put words into practice.