NYC's Housing Crisis Set To Worsen Amid Lag In Apartment Construction
Tens of thousands of new housing units are set to be delivered in New York City over the next three years, but construction is far off its historical pace in an already chronically undersupplied market.
A total of 33,000 new units are expected to become available by the end of 2024, 2,000 fewer per year than the historical average, according to real estate brokerage Corcoran's pipeline report, which provides an overview of the number of NYC units that are planned or under construction.
The Real Estate Board of New York estimates the city needs 560,000 new units by 2030 to keep up with its predicted population and job growth. So far, construction on 21,000 units has started.
“It could be a rough ride for a lot of consumers who are trying to get in and find more ordinary priced inventory,” Corcoran CEO Pamela Liebman told Bloomberg. “I think we can say that this will continue to put more pressure on the rental market, which will push rents up even higher.”
Liebman added that the majority of the new, for-sale apartments will be for luxury buyers. Of the units coming online, 70% are expected to be rentals and 30% are projected as for-sale units. The report cites the rent reform legislation of 2019 and high development costs as playing a major role in the “viability of many for-rent development schemes.”
In the core of Manhattan — from the northern edge of Central Park to the southern tip of the Financial District — about 10,000 units are projected to deliver in the next two years, with Downtown having the most units in the pipeline at roughly 4,000.
Northwest Brooklyn has the largest condominium and rental pipeline, with more than 9,700 units across both groups coming online in the near future.
The secondary markets — which Corcoran describes as Upper Manhattan, Western Queens and Northwest and Central Brooklyn — will see a slight jump in the number of for-sale units and a “tapering” of rentals in the next three years, the report found.
While rents in New York City dropped significantly during the pandemic, prices have soared in recent months. In New York, rent went up 33% between January 2021 and January 2022, per The New York Times, citing listing site Apartment List.
