Housing development costs in New York are driven by a combination of high construction expenses, complex regulatory requirements, and lengthy approval processes that increase the financial burden of building new residential units. This page covers CBC’s work on environmental review reform, land use and zoning procedures, the Scaffold Law, construction and building code regulations, property tax policy, and the capital needs of the New York City Housing Authority.
This page was created with AICBC Insights uses AI to group, analyze and present data and recommendations from CBC's publications. Always reference the cited sources to verify important details..
Exempting modest residential development from SEQR would make building housing cheaper and faster without additional costs to the government.
Exempting water facilities, parks, and resiliency retrofits similarly would reduce the cost of projects that improve the environment.
Imposing deadlines on State and local agencies to sign off on environmental reviews would ensure reasonable and predictable timelines and avoid the death spiral of mounting cost increases and uncertainty that too often prevent critical housing from being built.
New Yorkers should vote yes on Question 2, which would create fast track reviews for affordable housing through the Board of Standards and Appeals and for mixed-income residential projects.
New Yorkers should vote yes on Question 3, which would create an Expedited Land Use Review Procedure (ELURP) for three types of zoning proposals to reduce development time and costs.
New Yorkers should vote yes on Question 4, which would create an Affordable Housing Appeals Board to balance citywide needs with neighborhood concerns.
New Yorkers should vote yes on Question 5, which would modernize the administration of the City Map to increase the efficiency and cost effectiveness of government operations.
Key Data
As of March 2026, environmental review processes significantly delay housing, with projects undergoing a full Environmental Impact Statement taking a median of 33 months to complete review.
As of September 2025, New York City has the highest high-rise residential hard construction costs in the world, and the Scaffold Law increases total development costs by at least 7%.
New York's State Environmental Quality Review Act (SEQRA), originally intended to ensure government accountability, has evolved into a bureaucratic obstacle that significantly delays and increases the costs of essential housing and infrastructure projects. Reforming this process to exempt strategic priorities like multifamily housing is necessary to allow the state to address its critical housing shortage and infrastructure needs more efficiently.
Recommendations related to Housing Development Costs
Governor Hochul should exempt strategic priorities, like multifamily housing, childcare and resiliency projects, from SEQRA to accelerate their development.
New York should reform environmental review to rebalance public decision-making processes so the state can address its mounting needs at a pace befitting the scale of its challenges.
Key Data
23 months
— The median time required to complete environmental review and pre-certification for projects using streamlined environmental assessments.
33 months
— The median time required to complete environmental review and pre-certification for projects undergoing a full Environmental Impact Statement.
43
— The number of SEQRA challenges decided by State courts in 2024.
5
— The number of SEQRA challenges that prevailed in State courts in 2024.
$2.2 million
— The average home value in Sag Harbor, where a 79-unit affordable housing complex was blocked.
20
— The number of technical analyses New York City currently requires for environmental reviews.
Reforming the State Environmental Quality Review (SEQR) process is essential to reduce the significant cost escalations that currently hinder housing and infrastructure development across New York. By exempting specific project types and establishing firm deadlines for environmental reviews, the state can mitigate the financial burdens—often tens of thousands of dollars per unit—that frequently render new housing projects infeasible.
Recommendations related to Housing Development Costs
Exempting modest residential development from SEQR would make building housing cheaper and faster without additional costs to the government.
Exempting water facilities, parks, and resiliency retrofits similarly would reduce the cost of projects that improve the environment.
Imposing deadlines on State and local agencies to sign off on environmental reviews would ensure reasonable and predictable timelines and avoid the death spiral of mounting cost increases and uncertainty that too often prevent critical housing from being built.
Key Data
11%
— Local environmental review increases development costs for 500-unit projects by 11 percent.
$82,000
— Local environmental review increases development costs by $82,000 per unit for 500-unit projects in New York City.
10%
— Environmental review can increase costs by 10 percent for modest, low-rise residential projects.
$35,000
— Environmental review adds $35,000 per unit in costs for residential projects in cities like Rochester or Buffalo.
$40,000
— Environmental review adds $40,000 per unit in costs for residential projects in the Mid-Hudson region.
$45,000
— Environmental review adds $45,000 per unit in costs for residential projects on Long Island.
New York City's housing affordability crisis is driven by exceptionally high construction costs, with hard costs like labor and materials, soft costs like permitting, and land prices all significantly exceeding those in other major cities. To address this, the city and state must modernize building codes, streamline approval processes, repeal the Scaffold Law, and rezone land to increase density and reduce the per-unit cost of development.
Recommendations related to Housing Development Costs
The City should align construction codes and regulations, which are often now bespoke to New York, with best practices from other global cities.
The City and State should better balance the trade-off between prevailing wage requirements and production to avoid rendering new residential development financially infeasible.
The State should repeal New York’s exceptional Scaffold Law and adopt the liability standards used in every other state in the country.
The City and State should focus on predictability and simplicity over site-by-site approval processes, with speedy permitting, as-of-right approvals and simple financing and design requirements for affordable housing.
The State should reform environmental review laws to exempt beneficial projects.
The City should increase opportunities for development through rezoning to chip away at the scarcity that drives up prices.
Key Data
1.4%
— The citywide vacancy rate in New York City, which is the lowest it has been since 1968.
$3,730
— The record-high asking rent for vacant apartments in New York City as of July.
23%
— The additional cost to build affordable projects in New York City that are subject to prevailing wage requirements.
7%
— The minimum increase in total development costs caused by New York State's Scaffold Law.
$82,000
— The estimated increase in hard and soft costs per unit caused by a two-year discretionary review process.
20% to 30%
— The estimated cost savings for projects that use at least some nonunion labor compared to union-built projects.
New York City's current land use process adds up to $82,000 to the cost of each housing unit and takes years to approve, hindering necessary development. Approving the proposed ballot measures would streamline review procedures, modernize mapping, and establish an appeals board to help reduce these development costs and barriers.
Recommendations related to Housing Development Costs
New Yorkers should vote yes on Question 2, which would create fast track reviews for affordable housing through the Board of Standards and Appeals and for mixed-income residential projects.
New Yorkers should vote yes on Question 3, which would create an Expedited Land Use Review Procedure (ELURP) for three types of zoning proposals to reduce development time and costs.
New Yorkers should vote yes on Question 4, which would create an Affordable Housing Appeals Board to balance citywide needs with neighborhood concerns.
New Yorkers should vote yes on Question 5, which would modernize the administration of the City Map to increase the efficiency and cost effectiveness of government operations.
Key Data
$82,000
— The amount added to the cost of each housing unit in 2025 dollars due to the current land use process.
2 to 3 years
— The time required for private rezoning application approval under the current land use process.
30 percent
— The maximum increase in residential capacity allowed in medium- and high-density districts under the proposed Expedited Land Use Review Procedure.
8,000
— The number of individual paper maps currently administered by the offices of the five Borough Presidents.
Pre-1974 rent-stabilized housing in New York City faces significant physical and financial deterioration, with repair costs for city-subsidized preservation projects often exceeding the market value of the buildings themselves. To address these challenges, the Rent Guidelines Board should ensure rent increases keep pace with inflation and improve data transparency regarding the physical and financial health of the city's housing stock.
Recommendations related to Housing Development Costs
The Rent Guidelines Board could approve rent increases that, at a minimum, keep pace with inflation to prevent landlords from cutting back on maintenance.
The Rent Guidelines Board should augment its reports with more information on the physical and financial well-being of New York City’s housing stock to better identify fiscal distress.
The Rent Guidelines Board should ask the New York City Department of Finance or New York State Homes and Community Renewal to publish a building level file with the total number of rent stabilized units in each rental building in the City.
Key Data
$437,736
— Total development cost per unit for the most recent NYCHA PACT transaction, which funded the repairs of 14 scatter site buildings in the northwest Bronx.
$380,000
— Maximum subsidy per unit allowed under the Neighborhood Pillars program, which helps developers acquire and renovate distressed rent stabilized buildings.
$250,000
— Average cost of repairing properties taken through the Third Party Transfer In Rem program.
$899.4 million
— Combined cost of Article 11 and 420-c property tax exemptions in fiscal year 2025, an 80 percent increase since fiscal year 2019.
$1,250
— Estimated operating costs per unit per month for a typical, well-run rent stabilized building, including property taxes, capital reserves, and collection losses.
New York City's land use review process is currently too long, expensive, and uncertain, adding up to $82,000 to the cost of each housing unit and increasing small building costs by at least 15 percent. Reforming the Uniform Land Use Review Procedure by streamlining advisory reviews, creating an appeals process, and shifting non-zoning actions to administrative agencies could significantly reduce these burdens and accelerate housing production.
Recommendations related to Housing Development Costs
Merge the Community Board and Borough President advisory reviews into a single review under the Borough President to shorten the review process and reduce the cost of going through ULURP.
Allow applicants to appeal actions rejected by the City Council to a ULURP Appeals Board consisting of the City Planning Commission and Council Speaker to encourage a greater balance of citywide needs and neighborhood concerns.
Focus ULURP on zoning and shift review of non-zoning actions and modest rezoning applications with no adverse impacts to City agencies or commissions to substantially speed up the approval of projects.
Implement time limits for administrative review processes to ensure that agencies review projects in a timely manner.
Shift review and approval of smaller projects to the City Planning Commission to reduce the high cost and uncertainty of the review process for smaller residential buildings.
Key Data
$82,000
— The current land use decision-making process is too expensive, adding as much as $82,000 to the cost of each housing unit in 2025 dollars.
15 percent
— The current ULURP process increases the cost of small residential buildings by at least 15 percent.
14 months
— The median time to approve dispositions of City-owned land through the Department of Housing Preservation and Development’s Urban Development Action Area Program was 14 months.
90 days
— The Community Board and Borough President advisory reviews currently take 90 days to complete.
5 months
— If projects went through a one-month administrative review instead of ULURP, the process would be at least 5 months shorter.
The New York City Housing Authority faces a massive $60 billion capital need, with nearly one-third of its units now costing more to replace than to repair. To address these daunting physical conditions and stabilize its budget, the authority must prioritize converting units to Section 8 under the Permanent Affordability Commitment Together (PACT) program and the Preservation Trust.
Recommendations related to Housing Development Costs
The City should fix or replace deteriorating buildings by utilizing the Permanent Affordability Commitment Together (PACT) program and the Preservation Trust.
NYCHA must improve management effectiveness and efficiency, while also publicly tracking progress and impact.
The agency should negotiate savings, boost productivity, and modernize property management through collective bargaining agreements.
NYCHA needs to overhaul the rent collection process to address weakened revenue.
Key Data
$60 billion
— Total five-year capital needs for NYCHA developments.
$373,000
— Per-unit capital need for NYCHA developments.
$78 billion
— Twenty-year capital needs for NYCHA developments.
$483,000
— Twenty-year per-unit capital need for NYCHA developments.
$8.2 billion
— Five-year capital plan for 2024 to 2028.
New York City's public housing authority faces a massive $60 billion five-year capital need, with repair costs for many units now approaching or exceeding the cost of new construction. To address these escalating financial requirements, the city and state must identify additional funding sources and streamline renovation processes to ensure project feasibility.
Recommendations related to Housing Development Costs
The State and City should seek to streamline the process as much as possible and not introduce additional steps that could delay the renovation process.
The City and State will need to tap additional sources of financing to help close future PACT and Preservation Trust deals.
NYCHA will need to raise additional sources of capital through infill development and phased redevelopment, where feasible, to support its capital program.
The City and State should make hard choices about how to allocate finite housing resources, potentially including Low Income Housing Tax Credits or New York’s tax-exempt bond volume cap, between NYCHA projects and other needs.
Key Data
$60 billion
— Total five-year investment needs for NYCHA's 161,000 public housing units.
$373,000 per unit
— Five-year investment needs per unit, more than double the 2017 estimate.
$78 billion
— Total twenty-year investment needs for NYCHA's housing stock.
$483,000 per unit
— Twenty-year investment needs per unit, up from the 2017 estimate of $255,000.
$1.5 billion
— City capital subsidies included in the Fiscal Year 2024 Executive Budget for future PACT projects through fiscal year 2026.
$27.8 billion
— Increase in twenty-year needs attributed to higher than expected inflation.
Governor Hochul's proposed housing package aims to double New York's housing production rate to create 800,000 new units over the next decade by removing regulatory barriers and providing targeted incentives. These strategies focus on planning and zoning for growth, including transit-oriented development and office-to-residential conversions, to address the state's long-standing housing shortage.
Recommendations related to Housing Development Costs
Local governments should be required to plan and zone for growth by either meeting production targets or allowing streamlined development.
Municipalities should rezone for transit-oriented development to increase housing capacity.
Housing development actions should be exempt from costly and time-consuming environmental reviews to accelerate production.
New York City should create a path to legalize basement apartments to maximize production potential.
The state should lift the floor area ratio (FAR) cap on new development and modify the cap for commercial conversions.
Policymakers should provide a tax incentive for the conversion of offices to mixed-income rentals.
The state should extend the construction completion deadline for active 421-a projects.
A tax incentive successor to 421-a is needed to make rental housing development financially feasible given high construction costs.
Key Data
800,000
— New units of housing intended to be created over the next decade under Governor Hochul's proposed package.
Commercial-to-residential conversions can help revitalize neighborhoods and increase housing supply, but success depends on targeted regulatory reforms and cost-effective incentive structures. Policymakers should prioritize lifting restrictive floor area ratio caps and ensuring that any subsidies for mixed-income projects are well-targeted to maximize public benefit.
Recommendations related to Housing Development Costs
Policymakers should implement regulatory reforms, such as lifting the Floor Area Ratio (FAR) cap and making zoning and building code changes, to make conversions possible.
The City should allow conversions as-of-right, rather than through discretionary processes, to maximize the potential number of conversions.
For projects that require subsidy or tax breaks, policymakers should take steps to ensure that those incentives are well-targeted and cost-effective.
The City should implement several other zoning changes to allow more commercial buildings to convert to residential use as-of-right.
Any conversion program should be based on a detailed financial feasibility analysis that looks at the types of conversions that would be feasible without subsidy, and which would require subsidies.
Key Data
13 million
— square feet of commercial space converted into residential units under the 421-g program.
12,865
— residential units created from converted commercial space under the 421-g program.
120 million
— square feet of office space built at densities greater than 12 FAR that could be converted to residential use if FAR cap relief is extended.
New York must address its housing crisis by streamlining bureaucratic processes, such as environmental reviews and zoning approvals, which currently add tens of thousands of dollars to the cost of each new unit. Removing outdated density caps and regulatory bottlenecks is essential to meeting the goal of building 800,000 new homes over the next decade.
Recommendations related to Housing Development Costs
Exempting projects smaller than 200 units from costly environmental review is crucial for enabling deeply affordable housing.
Streamlining the Department of City Planning’s process for private rezonings would help reduce development bottlenecks.
Moving fire code plan review and inspections to the Department of Buildings would improve the efficiency of the review process.
Removing the Multiple Dwelling Law’s cap on residential density would allow for greater housing production.
Streamlining state environmental review requirements would help unblock development of much needed new housing.
Removing the arbitrary limit on residential development in New York City, specifically the floor area ratio (FAR) of 12.0, is necessary to increase housing production.
Key Data
$50,000 to $70,000
— The cost added to each unit by two years of delays or putting a project through a rezoning and environmental review.
$1.4 million
— The cost imposed by a three-month delay during construction of a 100-unit building.
$14,000
— The cost per unit imposed by a three-month delay during construction of a 100-unit building.
25
— The number of new units approved per 1,000 residents in New York City over the last decade.
20%
— The rate of housing production in New York City compared to what Seattle and Austin built.
12.0
— The floor area ratio (FAR) cap on new and converted residential buildings established in 1961.
Office-to-residential conversions can help revitalize obsolete office buildings, but they require careful policy design, including regulatory relief and cost-effective incentives, to be financially viable. Recent analysis suggests that such conversions are only feasible when building acquisition prices fall below $262 per square foot, significantly lower than current market values for many office properties.
Recommendations related to Housing Development Costs
Regulatory relief of various forms is essential, including lifting the FAR cap.
An as-of-right approvals process is needed to ensure the market can dictate when and where conversions make sense.
Care is needed to design a cost-effective incentive that avoids providing subsidies that are more than necessary.
Any conversion program should be based on a detailed financial feasibility analysis that identifies which projects require subsidies and which are viable without them.
Key Data
$1.2 billion
— The nominal cost of the 421-g property tax incentive program, which equates to $92,000 per unit.
$1.7 billion
— The total tax expenditure for the 421-g program in today's dollars, or $132,000 per unit.
$262 per square foot
— The price point below which residential conversions become financially feasible, assuming renovation costs of $100 to $200 per square foot.
$750 to $1,000 per square foot
— The average cost of building a new office building in New York City before land costs.
$550 to $725 per square foot
— The cost range for a new Manhattan residential building before land costs.
12,865 units
— The number of new residential units created through the 421-g program, representing over 40 percent of housing growth in lower Manhattan between 1990 and 2020.
As Chief Housing Officer, Katz oversees the Department of Housing Preservation and Development, the New York City Housing Authority, the Housing Development Corporation, the Mayor’s Office of Housing Recovery Operations and the Mayor’s Office to Protect Tenants. Katz most recently served as executive director of the research nonprofit Citizens Housing…
New York City must implement a growth-oriented housing plan that quantifies needs across all income levels and broadens zoning to increase development capacity. To make housing less expensive to build and operate, the city needs to reform property taxes, building codes, and insurance laws while improving operational efficiency in development approvals.
Recommendations related to Housing Development Costs
The City should set goals for total housing production (inclusive of both income-restricted and market-rate units), the net growth in housing units citywide, and the net change by community district.
Doubling production will require broad-based rezonings to increase as-of-right development capacity in every neighborhood.
The City should track and publish outcome metrics, such as the share of rent burdened households or the homeownership rate for various groups, to monitor the effectiveness of both demand- and supply-side policies.
New York needs to reform the property tax system, building and construction codes, insurance laws, and the Multiple Dwelling Law, in order to make housing less expensive to build and operate.
The City should identify the specific operational and policy actions needed to achieve housing goals, identify responsible parties, and set implementation milestones.
Key Data
560,000
— Number of additional housing units New York City needs by 2030 to meet existing needs and future population growth.
50,000
— Number of housing units that must be permitted annually to meet housing needs, which is twice as many as issued in recent years.
40%
— Percentage fewer housing permits issued per resident in New York City compared to San Francisco.
20%
— Percentage of the city’s residential lots that have enough capacity under current zoning to make it worthwhile to develop.
22,000
— Number of vacant positions within the City that could be utilized to improve operations and housing service delivery.
New York City requires a comprehensive housing plan that increases as-of-right development capacity and streamlines approval processes to meet the projected need for 560,000 new units by 2030. Achieving this growth necessitates broad zoning reforms, property tax adjustments, and operational improvements to ensure that building new housing remains financially feasible.
Recommendations related to Housing Development Costs
The city must create a holistic, growth-oriented housing plan that quantifies needs and sets goals for the entire housing market, not just affordable housing.
New York should change zoning broadly across the city to increase as-of-right development capacity to ensure the housing plan is realized quickly and cost-effectively.
Basic operations must improve, including speeding up approval times for zoning certifications, building permits, and certificates of occupancy.
Broader upzoning to increase allowable building sizes will be needed to provide enough density to meet an ambitious production target.
Changes are needed to make development of all housing types financially feasible, which requires property tax reform and the right tax and other incentives to encourage mixed-income development.
Key Data
560,000
— Number of housing units New York City needs by 2030 to meet existing needs and future population growth.
50,000
— Number of housing units that must be permitted annually to meet housing needs, which is twice as many as issued in recent years.
40%
— Percentage fewer permits for housing units issued per resident in New York City compared to San Francisco.
22,000
— Number of vacant city positions that could be filled to help improve basic operations like speeding up approval times.
20%
— Percentage of the city’s residential lots that have enough capacity under current zoning to make it worthwhile to develop.
New York City's high construction and operating costs make it financially unfeasible to build new rental housing without government assistance like the 421-a tax exemption. Replacing this program with the proposed Affordable Neighborhoods for New Yorkers (ANNY) program requires modifications to better reflect neighborhood market conditions and ensure the continued production of both market-rate and affordable units.
Recommendations related to Housing Development Costs
Modify ANNY to increase the amount of affordable and market rate rental development by creating options that reflect lower market rents in moderate- to middle-income neighborhoods.
Ensure greater transparency and public reporting of data to support a robust assessment of the program’s impact and effectiveness, which would inform any successor program.
Harmonize the City and State affordable housing programs and reduce bureaucratic conflicts and red tape to yield more development and speed up the development process.
Create a new option for mid-rise projects outside the PDA to help make more projects feasible in areas where Option A is not viable.
Offer Option B to all projects outside the PDA to improve the financial feasibility of mid-rise projects in these areas.
Modify ANNY and MIH to be compatible to avoid misalignments that cause delays, increase complexity, and make building housing riskier and more expensive.
Clarify rules for projects receiving bond financing and/or other subsidies to resolve uncertainty regarding whether these projects can also receive tax exemptions.
Key Data
3.7 percent
— New York City’s construction costs have historically increased faster than the overall rate of inflation, averaging 3.7 percent annually since 2010.
8 percent
— Construction costs increased 8 percent between February 2021 and February 2022.
50 percent
— The cost to operate a multifamily building in New York City is 50 percent higher than the national average.
60 and 65 percent
— Fully taxed rental buildings in New York report spending between 60 and 65 percent of gross rental income on expenses.
38 percent
— Fully taxed rental buildings elsewhere in the country spend an average of 38 percent of gross rental income on expenses.
30 percent
— As a percentage of rental income, New York’s property taxes are 30 percent in New York City.
New York City's failure to produce sufficient housing to meet demand has fueled an affordability crisis and hindered economic competitiveness. To address this, the city must reduce zoning constraints, modernize building codes, reform laws that disincentivize development, and overhaul the property tax system to increase equity.
Recommendations related to Housing Development Costs
The incoming Administration should plan for growth and set ambitious but achievable production goals across the city.
The City should rezone to increase density appropriately and allow more as-of-right development when aligned with City plans.
The City should modernize the City’s building code to decrease costs.
The City should support reform of laws that disincentivize development such as the New York State’s Scaffold Law, the Multiple Dwelling Law, and rent stabilization.
The City should reform the property tax system to increase equity.
Key Data
$40 billion
— Capital needs at the New York City Housing Authority due to years of underinvestment, cost inflation, and costs for lead abatement.
four
— Number of identified impediments to housing production, including zoning constraints, limited capacity for new development, high construction costs, and inequitable and relatively high property taxes.
The Scaffold Law's strict liability standard increases construction insurance premiums and development costs by 7%, hindering the creation of affordable housing. Replacing this with a comparative negligence standard could have allowed for the creation or preservation of 12,600 additional affordable housing units under the current 5-year plan.
Recommendations related to Housing Development Costs
The state should reform Labor Law §§ 240/241 (the 'Scaffold Law') in the 2021-22 Executive budget proposal to encourage the development of additional housing units.
New York should replace the existing strict liability standard with a more common-sense comparative negligence standard that considers the respective negligence of the property owner, employer, contractor, and/or injured party in determining compensation and damages.
Key Data
7%
— The Scaffold Law's strict liability standard has increased affordable housing and other development costs by an estimated 7%.
12,600
— If excessive costs from the Scaffold Law had been invested in housing during the current 5-year housing plan, an additional 12,600 affordable housing units could have been created and preserved.
New York City's housing shortage and high construction costs are driven by restrictive zoning, outdated building codes, and policies like the Scaffold Law and an inequitable property-tax system. Addressing these regulatory barriers and modernizing planning processes is essential to increasing housing production and improving affordability across the region.
Recommendations related to Housing Development Costs
State and city lawmakers should update the zoning code to facilitate easier construction throughout the region.
Policymakers should set housing production targets as part of a comprehensive planning process.
The city should modernize outdated building-code provisions that fail to keep pace with modern construction methods.
New York should enact laws to encourage municipalities to zone for growth, particularly in transit-rich areas.
The state and city should reform the property-tax system, which currently taxes multifamily buildings at a higher rate than owner-occupied housing.
Lawmakers should reform the Scaffold Law, which results in higher insurance premiums by holding contractors fully liable for all gravity-related workplace injuries.
Key Data
60%
— of all residential lots are zoned for low densities.
12%
— of residential lots allow no more than single-family homes.
one in four
— residential lots are potential development sites based solely on the zoning code.
New York City's housing production has failed to keep pace with job and population growth, resulting in increased overcrowding and a decline in affordable housing options. To address this, the city and state must implement comprehensive housing strategies, modernize outdated building codes, and reform the property tax system to incentivize new development.
Recommendations related to Housing Development Costs
New York City should have a citywide housing plan that quantifies current and future housing needs at all market segments, identifies the gap between these needs and existing zoning capacity, and sets ambitious but achievable citywide production goals.
The City should update the zoning code to increase capacity by increasing density near transit and along commercial corridors, modifying contextual zoning districts, and making it easier to build three-plus unit buildings as-of-right.
The City should modernize outdated building code provisions that increase costs and adopt strategies to encourage construction industry innovation.
State lawmakers should pass laws to require municipalities to zone for both more housing and a wider variety of housing, including accessory dwelling units and multifamily residences, particularly in areas near commuter rail stations.
State lawmakers should reform laws that disincentivize housing production, such as the Scaffold Law, the cap on floor area ratio, and the Multiple Dwelling Law, to reduce the cost to build new housing.
State lawmakers should enact property tax reform to make the City’s property tax system more equitable and efficient, including reducing the high tax rate on multifamily rental buildings relative to single family homes.
Key Data
0.19
— The number of housing units added for every net new job created in New York City between 2010 and 2018.
7 percent
— The amount by which unique construction liability laws in New York increase total development costs.
$1.6 billion
— The cost of 421-a tax exemptions in fiscal year 2019 in foregone City tax revenue.
2.55
— The classification ratio, or the difference between the effective tax rates on apartments and single-family homes, which is the second highest among large cities in the United States.
40 percent
— The amount by which New York City issued fewer housing unit permits per capita than San Francisco.
206,000
— The number of permits for new housing units issued by New York City during the 2010s.
New York City faces a housing crisis driven by high rent burdens, where over 920,000 households pay at least 30 percent of their income on rent, and a lack of new housing supply relative to population growth. To address this, policymakers should lift floor-area ratio caps, reform the property tax system to facilitate rental construction, and incentivize suburban housing development to meet regional demand.
Recommendations related to Housing Development Costs
Lifting the cap on floor-area ratio for residential buildings would help address housing development issues.
Lawmakers should ensure that zoning codes match the needs of a growing region to boost housing production.
Policymakers should reform New York City’s property tax system to make it easier to build rental housing without the need for substantial subsidies.
The state should find ways to incentivize the suburbs to build sufficient housing to meet the regional demand.
Key Data
920,000
— Number of renter households in New York City that were rent burdened, paying at least 30 percent of their incomes in rent.
22 percent
— Share of all housing units produced in 2017 that were in 40-plus story buildings.
23 percent
— Share of units in 40-plus story buildings that were income-restricted.
90 percent
— Portion of severely rent-burdened households that were low income.
New York City faces a massive $31.8 billion capital need for public housing over five years, with the current NYCHA 2.0 plan leaving an $8.4 billion funding gap. Additionally, the city allocates $3,830 million in tax expenditures annually toward housing programs to support development and maintenance efforts.
Key Data
$31.8 billion
— The total five-year capital needs for the New York City Housing Authority.
$8.4 billion
— The amount of unmet capital needs remaining in the NYCHA 2.0 plan.
$3,830 million
— The total New York City tax expenditures for housing programs in fiscal year 2019.
Rent regulation in New York City often fails to target low-income households, with many upper-income tenants benefiting from below-market rents while living in units with significant maintenance deficiencies. Reforms should prioritize better targeting of assistance to those truly in need and ensure incentives exist for property owners to maintain housing quality.
Recommendations related to Housing Development Costs
The Legislature should eliminate rent stabilization for upper-income households who earn more than $200,000 per year to better target the system.
Policymakers should provide an incentive for investment in regulated units to ensure property owners maintain their buildings.
Reforms should focus on improving conditions for tenants and making the system better targeted to low-income, rent-burdened households.
The State should support better enforcement of the improvement allowances to address apartment conditions.
Key Data
80 percent
— Rent-stabilized units report 80 percent more maintenance deficiencies on average than market-rate units.
$271 million
— Upper-income households living in rent-stabilized units collectively save $271 million each year.
100,000
— In 2017, about 100,000 upper-income households lived in rent-stabilized units built before 1974.
75 percent
— In 2017, 75 percent of unsubsidized rent-stabilized tenants earning less than 80 percent of Area Median Income were rent burdened.
The New York City Housing Authority faces $32 billion in capital needs, with nearly all properties requiring substantial rehabilitation at an average cost of $181,000 per unit. To prevent 90 percent of public housing units from becoming too costly to repair by 2027, the city must integrate the authority into its broader affordable housing strategy, leverage underutilized land assets, and improve construction management.
Recommendations related to Housing Development Costs
The City should fully integrate NYCHA into its affordable housing strategy.
NYCHA should transition from being a landlord to an affordable housing steward that manages fewer buildings.
NYCHA should leverage underutilized land assets to fund repairs and facilitate development.
NYCHA should improve operations and construction management.
Key Data
$32 billion
— NYCHA's total capital needs, representing a nearly fivefold increase over the last decade.
$181,000
— Average cost per unit for the substantial rehabilitation required by nearly all NYCHA properties.
90 percent
— Portion of NYCHA’s 176,000 units that could deteriorate to the point of being no longer cost-effective to repair by 2027 without dramatic action.
$300 million to $600 million
— The goal set by NextGen NYCHA for raising funds from mixed income infill development.
$1.5 billion
— Potential funding that could be raised by selling 10 percent of NYCHA’s air rights.
58 million square feet
— Total amount of development rights controlled by NYCHA across the city.
Utilizing underused land within existing public housing developments for infill construction offers a significant opportunity to generate revenue for necessary repairs. However, the financial return from these projects is heavily dependent on the mix of market-rate and affordable units, as higher mandates for affordable housing reduce the payments developers are willing to provide.
Recommendations related to Housing Development Costs
The city should leverage infill development on underutilized land as a primary revenue-raising strategy to fund essential building repairs.
Policymakers should balance the need for affordable housing with the financial reality that stricter requirements to produce greater amounts of affordable housing generate less revenue for NYCHA.
To maximize financial returns, the city must carefully calibrate the number and mix of residential units in development agreements, as these factors directly determine the upfront payments developers are willing to make.
Key Data
$33 million
— Revenue yield for NYCHA from 80/20 infill developments in a strong market.
$16 million
— Revenue yield for NYCHA from 80/20 infill developments in a moderate market.
$9 million
— Revenue yield for NYCHA from 50/50 infill developments in a strong market.
$4.5 million
— Revenue yield for NYCHA from 50/50 infill developments in a moderate market.
$0
— Revenue yield for NYCHA from 100% affordable infill developments.
$31.8 billion is the amount required to repair NYCHA's public housing units over the next five years. CBC Senior Research Associate Sean Campion discuss the findings and recommendations of CBC's recent report on NYCHA's capital needs and explains how NYCHA got into such a deep hole and and how it…
New York City added $1.9 billion in capital funding to its affordable housing plan, yet official documents lack the necessary details to evaluate how these funds will be used or the cost per unit. Without productivity benchmarks and transparent reporting on spending, it remains impossible to determine if the plan is deploying capital in the most cost-effective way.
Recommendations related to Housing Development Costs
The City should include productivity benchmarks in the Ten-Year Capital Strategy to enable accurate estimation of unit financing and costs.
The City should provide basic data on program usage and subsidy values for each project to allow for an evaluation of cost-effectiveness.
The City should include productivity metrics in the capital plan to accurately estimate the number of units expected to be financed through new construction and preservation programs.
The City should regularly update the public on what has been spent toward reaching the goal of building or preserving 200,000 affordable units.
Key Data
$1.9 Billion
— Addition of capital funding to increase affordability protections for up to 10,000 units.
$41 Billion
— Total public and private funds over 10 years for the Housing New York plan.
$6.7 Billion
— Total City capital funding for the Housing New York plan.
62,506
— Number of units financed through the end of 2016.
200,000
— Goal for building or preserving affordable units by 2024.
$5.6 Billion
— Total planned housing commitments in the Ten-Year Capital Strategy.
High land and construction costs in New York City create significant financial trade-offs, necessitating substantial subsidies to make housing affordable for lower-income households. Policymakers must balance the desire for more affordable units with the economic reality that increasing requirements or lowering income thresholds makes projects harder to finance, requiring strategies like improved land use and reduced construction costs to maximize production.
Recommendations related to Housing Development Costs
Options for increasing the efficient use of land, reducing construction costs, and effectively using cross-subsidies should be explored to maximize the amount of affordable housing that can be produced.
Policymakers must recognize that increasing the required share of affordable units in new developments increases the subsidy required from market rate tenants and/or government.
Planners should account for the fact that markets with higher land prices and construction costs require more subsidy for the same number of units.
Assessments of housing plans must acknowledge that the subsidy per unit required can increase significantly based on whether the unit is reserved for a low-income household or a middle-income household.
Key Data
30%
— The commonly-used threshold for housing affordability used to determine if rents are unaffordable.
High construction costs in New York City, driven by land prices and labor expenses, create significant financial gaps that require substantial government subsidies or cross-subsidies to make units affordable for lower-income households. Balancing the trade-offs between income levels, affordable unit shares, and location remains a complex challenge that necessitates exploring strategies to improve land efficiency and reduce development expenses.
Recommendations related to Housing Development Costs
Policymakers should explore options for increasing the efficient use of land to maximize the amount of affordable housing that can be produced.
The city should explore options for reducing construction costs to maximize the amount of affordable housing that can be produced.
Stakeholders should explore options for effectively using cross-subsidies to maximize the amount of affordable housing that can be produced.
Key Data
$30
— Average price per square foot for land in weak housing markets like East Tremont and Morrisania.
$437
— Average price per square foot for land in very strong housing markets.
20 to 30 percent
— Increase in labor costs when using union labor in New York City.
$2,500
— Monthly rent required to cover construction costs in the weakest housing markets.
$23,766
— Annual subsidy required to make a new unit affordable for an extremely low-income three-person household in a weak housing market.
$955,000
— Annual cost to provide 50 units to very low-income households in weak housing markets.
Prevailing wage mandates significantly increase the cost of labor for public and subsidized projects, with estimates suggesting they raise housing construction costs by 25 percent without improving quality. The current process for determining these wages lacks transparency and often results in compensation levels that exceed average private sector wages, adding substantial financial burdens through supplemental fringe benefit requirements.
Recommendations related to Housing Development Costs
Efforts should be undertaken to ensure wage surveys are inclusive and widely administered, and the definition of prevailing wage should be broadened to a standard greater than 30 percent.
The State Labor Commissioner and the City Comptroller should take steps to improve transparency in the determination of prevailing wage.
They should exercise their discretion to re-examine the criteria for establishment of titles and consider whether changes to prevailing wage schedules could be made within occupations to simplify the schedules and reduce the cost burden.
Collective bargaining agreements used to set prevailing wage rates should be identified on the schedules.
These and other contractual agreements relevant to the determination of the prevailing wage should also be posted online.
Key Data
25 percent
— Prevailing wage mandates increased the cost of housing construction by this amount.
65 – 67 percent
— The New York City prevailing wage for boilermakers is this much higher than the mean hourly rate paid by private employers.
30 percent
— The supplemental rate for fringe benefits generally adds at least this much to the cost of wages.
Rent regulation in New York City is a significant, yet poorly targeted, policy that imposes substantial costs on the city, including lost property tax revenue and higher rents for those in the unregulated market. Future policy should focus on phasing out benefits for high-income households while expanding more effective, targeted programs to promote affordable housing and reduce barriers to new construction.
Recommendations related to Housing Development Costs
Benefits now available to low- and moderate-income households should not be reduced, but the poorly targeted benefits can be removed at an accelerated pace by phasing out regulation for higher-income households.
The long-term contraction in the scope of rent regulation should be accompanied by expansion of other more effective programs to promote affordable housing.
New legislation should phase out benefits for all high-income households.
The City should evaluate the efficiency and effectiveness of existing affordable housing programs and other policies, such as zoning, that affect housing investment.
Key Data
$5,500
— Average annual rent reduction per housing unit provided by rent regulation.
$1.9 billion
— Total annual extra rent paid by 669,000 households in unregulated units due to market competition.
$283 million
— Annual property tax revenue lost by the City of New York due to rent regulation.
19%
— Amount by which hard costs of residential new construction in New York are higher than in Chicago.
24%
— Amount by which hard costs of residential new construction in New York are higher than in Los Angeles.
56%
— Amount by which hard costs of residential new construction in New York are higher than in Dallas.
High construction costs, rather than rent regulation, are the primary driver of low housing development rates in New York City, with labor and land expenses significantly exceeding those in other major cities. Future policy should focus on phasing out rent regulation benefits for high-income households while simultaneously streamlining building codes and expanding effective programs to promote affordable housing.
Recommendations related to Housing Development Costs
Benefits now available to low- and moderate-income households should not be reduced, but the poorly targeted benefits can be removed at an accelerated pace by phasing out regulation for higher-income households.
The long-term contraction in the scope of rent regulation should be accompanied by expansion of other more effective programs to promote affordable housing.
Local government should evaluate the efficiency and effectiveness of existing affordable housing programs and other policies, such as zoning, that affect housing investment.
The City should reduce barriers created by its own policies to promote investment in new housing.
The City should continue streamlining existing programs to help provide affordable housing.
Key Data
$5.2 Billion
— The annual gap for low- and moderate-income families between the 30 percent affordability threshold and current rent burdens.
19 percent
— The amount by which hard costs of construction, excluding land, are higher in New York than for comparable housing in Chicago.
24 percent
— The amount by which hard costs of construction, excluding land, are higher in New York than for comparable housing in Los Angeles.
56 percent
— The amount by which hard costs of construction, excluding land, are higher in New York than for comparable housing in Dallas.
$51,600
— The anticipated average public subsidy per unit for the initiative to preserve or build 165,000 units of affordable housing by 2014.
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