New York City saw a significant surge in apartment construction in 2025, with 38,682 housing units completed in new buildings, a substantial increase from 33,859 units in 2024. This represents the highest number of units completed in a single year since 1965, making it the second consecutive year with over 30,000 completions. The Department of City Planning reported this boom, and a CoStar report from May indicated that NYC led the nation in multifamily construction with 43,000 units under construction in Q1 2026, contrasting a national decline in construction starts to their lowest quarterly level since 2011.
The increased housing supply in NYC can be attributed to various city and state initiatives. These include residential-friendly rezonings in areas like Gowanus, Brooklyn; Jamaica, Queens; Long Island City, Queens; and Prospect Heights, Brooklyn, which are expected to facilitate approximately 50,000 new units in the coming years, with about 10,000 already delivered in Gowanus alone. Tax incentives, such as the two-year-old 467-m tax break for residential conversions, have also played a crucial role. For instance, in Long Island City, the Jasper delivered 499 units, with 30% designated as affordable housing.
Despite this progress, New York City's apartment vacancy rate remains below 2%, according to an April report by Corcoran, and the city continues to be an expensive place for construction. Shimon Shkury, founder and president of Ariel Property Advisors, estimates that 50,000 to 60,000 units per year are needed to address the city's housing shortage, otherwise, a half-million-unit deficit is projected by 2034. The sunsetting of the 421-a multifamily development incentive in 2022 was seen as a setback, and its replacement, 485-x, has led to smaller projects due to construction wage requirements, with critics stating that replacing 485-x would further spur long-term construction. Permit filings also saw a modest rebound in 2025 following a surge in 2022 before the 421-a expiration, but they remain below pre-2022 levels, raising questions about the sustainability of the current pace without new policies.
The majority of the 39,073 units completed in 2025 were in large multifamily buildings (50+ units), accounting for nearly 85% ($32,989) of the citywide total, while completions of smaller buildings (1-49 units) declined. From 2010 to 2025, 88,146 income-restricted units were added, primarily through government-subsidized programs. Michael Mazzara, managing director of capital markets at JLL, noted that rezoning initiatives are significantly impacting Brooklyn and Queens, which collectively added over 18,000 multifamily units in 2025, suggesting a potential continued influx of multifamily housing development across the city in the next few years. However, sustainability hinges on new policy initiatives, as current trends are partly due to developers rushing to finish projects before key tax exemption deadlines.
