New York City is experiencing a building boom.
The amount of new construction in the city was up in the first quarter of 2025, reaching 8 million proposed square feet, according to a report from the Real Estate Board of New York. That’s an increase of 26% from the previous quarter and also from the first quarter of 2024.
The increase is likely the result of city and state policies in the last year and a half to encourage housing production, said Basha Gerhards, senior vice president of planning at REBNY.
“We’re viewing this as an early indicator that some portion of those efforts are starting to pay off,” she said.
Those initiatives include Mayor Eric Adams’ City of Yes plan, which aims to spur development in low-density areas, especially in the outer boroughs.
Government policy is similarly having an effect on the size of developments. Of the midsize buildings proposed to the Department of Buildings this past quarter, a larger share than was typical in past years contained 98 or 99 total units. That’s likely in part because of incentives in the city’s 485-x program, Gerhards said. The program offers tax benefits for the inclusion of affordable units in projects but requires developments with 100 units or greater to pay construction workers a higher minimum wage, disincentivizing larger projects.
Multifamily housing construction overall rose to the highest level since 2022. The 6,871 proposed units is 58% more than the overall average since 2008. However, it would take 12,500 units per quarter to reach the goal set by Adams of 500,000 new housing units built in the next decade. For comparison, there were 169,000 units constructed in the city in the 2010s, according to the Department of City Planning.
“If you want to produce housing, you need flexible zoning, you need the appropriate tax incentives — I would say a friendly regulatory environment,” Gerhards said. “Ideally, we would have lower interest rates and lower inflation [to offset costs], but we do not have those things.”
The number of new project filings was down 15% year over year. However, the number of filings for developments over 300,000 square feet was up.
Brooklyn had the highest number of proposed units in multifamily developments, at 3,080. Manhattan, once a leader in housing construction, has not led the boroughs in the last decade, Gerhards said, and notched only 384 filings for multifamily units last quarter.
REBNY sourced the data for its report from project applications submitted to the Department of Buildings.
