Permits & development · 10/15/2026
485-x filings cluster at 99 units to dodge higher wage and affordability rules
New city registration data for the state 485-x tax break show developers building at exactly 99 units. At 100 units, the affordable share rises and a $40 hourly construction wage applies in certain zones. Unions call it a loophole. The Mamdani administration and state lawmakers have not said they plan changes.
HReported by HousingWireRead the original ↗
What happened
New York developers are registering new rental buildings for the state's 485-x property tax break at exactly 99 units. HousingWire reported on Oct. 15, 2026 that the pattern appears tied to stricter rules that start at 100 units. At 100 units, the required affordable share rises from 20% to 25%, according to program summaries. Construction workers on those larger projects must also be paid at least $40 an hour, rising 2.5% a year in certain city zones.
The figures come from Latent Urban Ventures, a New York real estate and technology firm. It found that the city's Oct. 14 release of 485-x registrations added 20 projects with exactly 99 units, none with 100 to 104, and one at 100 or more. Across the April and October releases, 49 registered projects have exactly 99 apartments. As of Sept. 20, Department of Buildings records showed 112 unregistered projects at exactly 99 units and one at 100. Among projects that began construction between April 1 and Sept. 20, 17 of 27 at 99 units had registered by Sept. 24, compared with one of 24 at 100 or more. Some are still inside their six-month registration window.
A separate Gothamist analysis, cited by HousingWire, found 48 clusters of adjacent buildings with 99 or fewer units between April 2024 and April 2026. Those clusters added 538 fewer affordable units than larger buildings would have required, a 21% shortfall. In East Harlem, Clipper Equity filed to split a lot into seven 99-unit buildings, which would require 35 fewer affordable apartments than one 700-unit building. Gary LaBarbera of the Building and Construction Trades Council told Gothamist developers are "ripping off the taxpayers." Developers have said the wage rules make projects above 100 units financially unworkable.
The Mamdani administration has said publicly it is not advocating changes to 485-x, and state lawmakers have not said they plan changes. Latent cautioned that the data cannot separate the program's effects from interest rates, construction costs and rents.
Key facts
- Program
- 485-x, a state property tax exemption for new rental housing in exchange for income-restricted apartments
- Enacted
- April 20, 2024, in the state budget
- 100-unit threshold
- Affordable share rises from 20% to 25%; $40 an hour minimum construction wage, rising 2.5% a year in certain city zones
- Oct. 14 release
- 20 projects at exactly 99 units, none at 100 to 104, one at 100 or more
- Registered at 99 units
- 49 projects across the April and October releases
- DOB records (Sept. 20)
- 112 unregistered projects at exactly 99 units, one at 100
- Affordable shortfall (Gothamist)
- 538 fewer affordable units in 48 clusters, a 21% shortfall
- Latest registration deadline
- Feb. 19, 2027, for six larger projects that began construction in late June or July
What it means
Tenants and voucher holders
Buildings kept at 99 units need to set aside 20% of apartments as income-restricted rather than 25%. That means fewer affordable units coming to market than larger buildings would have produced.
Caseworkers
New 485-x buildings are still adding income-restricted apartments, but many at the lower 20% share. Expect the affordable supply from these projects to be smaller than the total unit counts might suggest.
Landlords
The city and state have not said they will change 485-x, so the current unit thresholds and wage rules remain in place for now.
The highlights
- Oct. 14 release added 20 projects at exactly 99 units and none at 100 to 104.
- At 100 units, affordable share rises to 25% from 20%, plus $40 wages in some zones.
- Gothamist found 538 fewer affordable units across 48 clusters of adjacent buildings.
Why it matters
Splitting sites into 99-unit buildings means fewer income-restricted apartments for people searching for affordable housing.
What to do: Watch future 485-x releases for larger projects with deadlines up to Feb. 19, 2027.
Not known yet
- Whether the six larger projects that started construction in late June or July will register for 485-x
- How many more apartments the 99-unit sites could physically hold
- The rents and income limits for the affordable units in these buildings
- Whether city or state officials will revisit the 100-unit threshold later
Background
In New York City, income-restricted apartments in new buildings that receive property tax breaks are usually rented through the city's Housing Connect lottery. Applicants must meet household size and income limits set for each unit, and buildings often reserve units at several income levels. Tax-break programs set what share of units must be affordable and for how long, and those rules shape how many lottery apartments a project offers.
Summary written by Bulwark from HousingWire’s reporting. The original story is at housingwire.com. This is general information, not legal advice.
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