Talk about a counter narrative.\u00a0<\/p>\n
While New York City\u2019s apartment vacancy rate is still below 2 percent, according to an April report<\/a> from brokerage Corcoran, and the metropolis remains a notoriously expensive place to build, there has been quite a bit of progress lately in increasing housing supply. That\u2019s largely thanks to city and state efforts, including residential-friendly rezonings and tax incentives such as the 2-year-old 467-m tax break for conversions to residential (see Page 18).\u00a0<\/p>\n SEE ALSO: Kings Capital Files Plans to Convert FiDi\u2019s 61 Gold Street Into 108 Apartments<\/a><\/p>\n There were 38,682 housing units completed within new buildings in New York City in 2025, according to the Department of City Planning<\/a>, a year-over-year rise from the 33,859 units completed in 2024. This represented the most units completed in a single year since 1965 \u2014 yes, since 1965 \u2014 and the second consecutive year that over 30,000 units were completed.\u00a0<\/p>\n A CoStar report from May showed that New York City led the nation<\/a> in terms of multifamily construction, with 43,000 units under construction in the first quarter of 2026. This came at the same time construction starts were down nationally to their lowest quarterly level since 2011.\u00a0<\/p>\n Together, Brooklyn and Queens saw over 18,000 multifamily units added in 2025, according to JLL<\/a> data. It\u2019s due in large part to the rezoning initiatives taking hold across both boroughs, according to Michael Mazzara<\/a>, managing director of capital markets at JLL. If things continue as they are, Mazzara said, the city as a whole could see a greater influx of multifamily housing development over the next few years.<\/p>\n \u201cAt a high level, there\u2019s certainly a boom in New York City multifamily construction,\u201d he said. \u201cThe rezonings are having an impact, it\u2019s a big driver of our business, which is effectively selling these ground-up development sites. So just from a citywide perspective, these rezonings are very accretive to new construction development.\u201d\u00a0<\/p>\n Some of the neighborhood-specific rezonings were in Gowanus, Brooklyn; Jamaica, Queens; Long Island City, Queens; and Prospect Heights, Brooklyn. The rezonings are expected to clear a path for around 50,000 new units in the coming years, with about 10,000 already being delivered in Gowanus alone<\/a>.\u00a0<\/p>\n One such development was 544 Carroll Street, a 17-story, mixed-use building with 133 apartments, 25 percent of which are designated as affordable housing. Move-ins began in October of 2025. The property\u2019s developer, Avery Hall<\/a>, jumped at the opportunity to build in Gowanus the moment the City Council approved the rezoning in late 2021.\u00a0<\/p>\n \u201cThere is enormous opportunity in Gowanus,\u201d Jesse Wark, a founding partner of Avery Hall, previously told Commercial Observer<\/a>. \u201cIt has been very cool to be part of a larger set of developers all making and integrating new things into the neighborhood.\u201d\u00a0<\/p>\n In Long Island City, the Jasper delivered 499 units<\/a> at 2-33 50th Avenue, with about 30 percent of the units designated as affordable. The rezonings all come with conditions that a percentage of the developed rental units must be affordable housing units.\u00a0<\/p>\n \u201cMany of those neighborhoods are prime neighborhoods,\u201d Mazzara said. \u201cThe appetite from developers is there, and the incentive and initiative in these areas, because of the increased density with rezonings, is why you\u2019re seeing the increased development in those markets.\u201d\u00a0<\/p>\n Still, to defeat the city\u2019s housing shortage, there needs to be 50,000 to 60,000 units produced per year, otherwise there will be a continued shortage of about half a million units by 2034, according to Shimon Shkury, founder and president of Ariel Property Advisors<\/a>.\u00a0<\/p>\n \u201cThere has been an apartment development rebound since 2024,\u201d Shkury said. \u201cAnd the first quarter of 2026 has been very encouraging, but the deeper question is: Is it something that we\u2019re going to see sustainably moving forward, or is it something that just happened in the first quarter, as a result of a lot of different items? \u2026 In my opinion, without new policies we\u2019re not going to see substantial, consistent, additional supply.\u201d<\/p>\n Many in the commercial real estate industry consider the sunsetting beginning in 2022 of the 421-a multifamily development incentive, which rewarded the inclusion of affordable housing in a project with significant tax abatements, as a setback for fresh construction. Its replacement, 485-x, has led to a wave of smaller projects due to construction wage requirements that state lawmakers baked into the incentive (see Page 18). Replacing 485-x would spur even more construction over the long term, these critics say.\u00a0<\/p>\n For Mazzara, additional aggressive rezoning initiatives are also needed around the city to sustain the boom.\u00a0<\/p>\n \u201cI really believe in it,\u201d he said. \u201cThere needs to be a continued conscious effort on these rezonings, both neighborhood wide, and individual property level rezonings, and additional zoning incentives. So, not necessarily just the rezoning concept, but things like the expedited land-use review procedure passed in November<\/a> \u2014 that cuts down the timing during the rezoning process. The efficiency helps drive additional development.\u201d\u00a0<\/p>\n Combining incentives with market demand can help further drive a housing development boom in New York City, Mazzara said.<\/p>\n \u201cSome of the most valuable development sites and locations in New York may not look like development sites today, but they\u2019re hiding in plain sight,\u201d he noted. \u201cI think that the next chapter of New York development may not be one giant rezoning, but hundreds of individual sites creating housing one approval at a time.\u201d<\/p>\n