New York City’s multifamily construction pipeline has slowed dramatically, with starts down 67 percent since early 2024, according to CoStar data. Developers who rushed to break ground before incentives like 421-a expired now face a less favorable replacement program, 485-x, leaving many projects stalled.
“The replacement 485-x program has failed to keep momentum alive,” said Victor Rodriguez, senior director of analytics covering the New York City market at CoStar, in an interview with IREI. “The result is a clear slowdown, with the construction pipeline thinning out.”
Institutional investors, along with mid-sized local developers, are increasingly looking to capitalize on projects outside the city. During the first half of 2025, Jersey City, Yonkers, New Rochelle, Westchester and Bergen County delivered more than 8,700 new units, with nearly 5,000 completions in the third quarter alone — the highest quarterly total in five years, according to CoStar.
