Queens’ Apartment Pipeline Shallowest in a Decade — But New Supply On the Way

The world’s borough might attract some new residents soon.

There’s a multifamily squeeze in Queens as the rental market tightens amid a dip in new construction, according to new data from CoStar. But experts on the borough’s housing market say this drop won’t last too much longer. 

The vacancy rate in Queens’ multifamily market declined to 2.08 percent in the second quarter of 2026, versus 2.39 percent for the same quarter in 2025. Meanwhile, stabilized vacancy hit a record low of 1.3 percent, which CoStar called “well below the metro average,” and the apartment pipeline has declined 76 percent since early 2024, falling from 10,881 units under construction to just 2,597 during the second quarter of 2026. That represents the borough’s shallowest pipeline in at least a decade, according to the CoStar analysis.

“I think it’s that classic story of supply and demand,” said Victor Rodriguez, senior director of market analytics at CoStar. “We saw vacancies drift upward in recent years in Queens, just because there’s so much being built. It does take time for those newer buildings to lease up, especially as you are looking to add thousands upon thousands of units every single year. But, when the supply story changes, the demand story doesn’t necessarily change, and what we have here, especially throughout Queens, is a major decline in that construction pipeline.”

The construction pipeline slowed recently due to the passage of the city’s 485-x initiative — a tax abatement program designed to incentivize more affordable housing that comes with heftier construction wage costs for projects over 100 units — and due to some developers waiting for the passage of the housing-friendly One LIC rezoning in Long Island City, according to Eric Benaim, co-founder and CEO of real estate group Modern Spaces. 

“There were a lot of projects that were on pause because they were waiting for 485-x to happen,” Benaim said. “That threw a wrench into a lot of projects, especially because of the 99-unit thing. It even affected our pipeline because we usually plan 12 to 24 months in advance. A lot of developers were also on hold because they were waiting for One LIC to pass. They weren’t sure what was going to happen with One LIC.”

But with the passage of One LIC last November — along with other Queens rezoning initiatives like the Jamaica Neighborhood plan — Benaim says the borough is bound to see a boom in new construction. 

“Since One LIC passed, we’ve been really busy, a lot of developers have been calling us,” he said. “There has been a lot of movement  on development sites being sold, as well as projects moving forward, or new projects being planned. There is going to be a huge supply. One LIC said it was going to increase by 15,000 units. I could see within 30 to 36 months at least 4,000 or 5,000 units hitting.”

Amanda Schiavo can be reached at aschiavo@commercialobserver.com.