New York Multifamily Market Report
2024 Investment Forecast
Early Indicators Suggest Peaking Construction,
Despite City’s Legislative Efforts to the Contrary
Attempts to increase apartment supply fall short of prodigious renter demand. New York’s apartment market entered the year with a 1.8 percent vacancy rate, tying the two-decade low achieved in 2021. Though the city is consistently one of the nation’s most active metros by construction, supply gains have trailed robust renter demand. In response, Mayor Eric Adams has proposed sweeping zoning changes to encourage development as part of the “City of Yes” initiative, aiming to support the completion of 100,000 apartments within the next 15 years. Still, state legislation has already adversely impacted attempts to grow the city’s apartment supply. According to the Real Estate Board of New York, the first eight months of 2023 noted an 81 percent drop in proposed units from the same period a year prior. This coincides with the expiration of the state’s 421-a tax exemption, which eased the financial burden of multifamily development. The full impact of these changes on the construction pipeline is yet to be seen, but the sharp decline in construction filings could have an effect on the delivery schedule as early as 2025.