Source: Bloomberg

Date Published: 9/9/25

Link: NYC Developers Build 99-Unit Buildings to Avoid Wage Requirements

New York’s 485-x affordable housing tax incentive program is having the unintended effect of driving developers to cap new projects at 99 units. The program offers tax breaks for new ground up properties that include affordable units, but also imposes steep construction wage requirements for projects of 100 units or more at $40 an hour plus. As a result, developers have abandoned plans for larger towers, instead favoring multiple smaller buildings on the same site. These smaller buildings are less efficient, take longer to build, cost more per unit, and ultimately yield fewer apartments than what the single large structure could provide. In the past year, 28 permits for 99-unit buildings were filed, more than double the previous 16 years combined according to city data. This trend reduces the efficiency of the city’s affordable housing pipeline at a time when rents are soaring and as the city is facing a critical housing shortage.