NYC Building Permits See Q4 2024 Uptick, But Overall Construction at a Halt

New York City’s pipeline for new construction saw a significant uptick in the fourth quarter, but overall development progress is still at a steady halt.

There were 366 new building filings throughout the city in the fourth quarter of 2024, a 12 percent increase from the previous quarter, according to the latest report from the Real Estate Board of New York (REBNY).

However, that was a 58 percent decrease year-over-year and also 36 percent below the historical average since 2008, REBNY found.

“The data on new building filings in Q4 2024 shows that the city is trailing production goals and historical development trends, which should be a concern for those focused on solving our housing supply crisis and keeping New York City’s economy moving forward,” Zachary Steinberg, senior vice president of policy at REBNY, said in a statement.

Queens saw 107 new building permits in the fourth quarter, the most of all New York’s boroughs but still a 30 percent decrease from the same time last year, REBNY found. Meanwhile, Manhattan had the fewest new building filings at just 17.

During the fourth quarter, there were 4,309 proposed multifamily units spread across 97 buildings, representing a 17 percent increase in the number of units from the previous quarter, according to REBNY.

That number of units is a long way away from Mayor Eric Adams and Gov. Kathy Hochul’s requirement of at least 12,500 units per quarter to meet their goal of 500,000 new housing units over the next decade, REBNY said.

In addition, there was only one new building permit filed during the fourth quarter that covered more than 300,000 square feet.

In fact, total proposed construction square footage during the fourth quarter was 6.3 million, a 7 percent decrease from the third quarter and 50 percent below the historical average, REBNY found.

However, there’s some hope. Some officials and developers believe that office-to-residential conversions under Adams’s new City of Yes rezoning will spur housing developments this year.

The City of Yes for Housing Opportunity, the plan’s official name, was passed in December with the intent to overhaul some outdated zoning rules to boost housing production in New York City and make zoning changes that will allow more conversions and construction.

“The passage of City of Yes toward the end of 2024 is a step in the right direction though, offering a modern zoning framework to spur development across all five boroughs,” Steinberg said. “As interest rates and construction costs continue to stabilize, the industry should find some relief from volatility that has challenged new development in recent years.”

Still, REBNY reported some developers worry the new incentive will “present challenges to utilization” and “make it less likely that below-market-rate rental units will be included in conversion projects.”

And carved-out neighborhoods that were exempted from the zoning changes by the New York City Council will prevent some enclaves around the city from allowing for denser apartment complexes, shrinking the number of estimated new homes from the rezoning to 82,000, as Commercial Observer previously reported.

Isabelle Durso can be reached at idurso@commercialobserver.com.