Manhattan real estate is in 'crisis' as new construction flatlines, borough president says

• New York City's pace of housing construction has slowed to a trickle, despite a severe affordability crisis.
• The governor's plan to boost housing failed in the legislature this year.

New York's housing crisis isn't getting better any time soon.

The borough of Manhattan, home to 1.7 million people, approved no new units of housing last month and just 10 buildings with 279 units in total were approved last month in the other four boroughs combined. City leaders are raising the alarm about the anemic pace of development.

"This should be considered a crisis. We have to fix this," Manhattan Borough President Mark Levine said in a tweet. Levine pointed to the steadily decreasing rate of construction in the city. The city approved 2,525 new units citywide and 1,208 in Manhattan in July 2013. In July 2022, it approved 527 citywide and 215 in Manhattan.

This is part of a longer-term trend in the Big Apple, which has constructed far fewer units of new housing than it needs in recent years. Demand is far outstripping supply, driving rent and home prices through the roof. Over the last decade the city has gained about four times as many new residents as it has new homes. In 2019, the New York metro area needed more than 340,000 new homes. At this point, half of all of New York City's working-age households can't afford housing and other essential goods, a recent report found.

Levine has a housing plan for his borough that identifies about 200 sites in Manhattan where he wants to see more than 70,000 new homes constructed. These sites include empty manufacturing space, an abandoned bus depot, and an unused Post Office building.

Restrictive zoning and building code regulations,and the expiration of a key tax incentive — known as 421-a — for developers are among the many reasons for New York City's slow rate of residential construction.

Other city and state leaders have also been pushing for more housing as the affordability crisis worsens. New York City Mayor Eric Adams has a plan that aims to build 500,000 new homes by 2032, what he's called a "moonshot" goal. But the city needs 560,000 new homes by 2030 to meet current and future demand.

New York Gov. Kathy Hochul attempted to pass a housing reform package this year that would have boosted the housing supply in New York City and its suburbs by 3% over the next decade. The New York Housing Compact aimed to build 800,000 new units, with new housing concentrated near transit stations — and it would have extended the 421-a tax break, which has encouraged significant housing development. But the effort failed after Republican and centrist Democratic lawmakers opposed it. A big portion of the opposition to the legislation came from suburban areas around New York City that didn't want to see more density in their communities.

Last month, the governor's office announced executive actions aimed at boosting housing construction that include tax incentives for developers and an effort to allow new housing on state-owned land.

It's not just Manhattan that's been building very little housing. The suburbs of New York City have also approved and constructed very few new units in recent years.

The town of Munsey Park in Nassau County on Long Island permitted a total of four new single-family homes between between 2010 and 2021, Politico reported based on Census data collected by the governor's office. Similarly, the city of Rye in Westchester County approved just 77 new housing permits, 65 of which were for single-family homes, during the same period of time.

But not all of the Big Apple's suburbs are failing to take the housing shortage seriously. Over in New Jersey, Jersey City is building a significant amount of new housing — and even redeveloping aging affordable housing. Hudson County, which is the city's home, built new housing at twice the rate that New York City did between 2010 and 2018.