Deals & development · 10/17/2026
Developers cap 485x buildings at 99 units, city data shows
City data on six months of 485x filings shows developers keeping buildings at 99 units, even where zoning allows more, because wage and affordability rules jump at 100 and 150 units. Some developers cluster several 99-unit buildings on one site. The construction trades council calls that a loophole. Lawmakers may revisit the program in January.
Reported by The Real Deal · New YorkRead the original ↗
What happened
The Real Deal reported on October 17, 2026 that New York City developers are capping new rental buildings at 99 units under the 485x tax break, even where zoning allows more. Wage and affordability requirements under the program rise sharply at 100 units and again at 150 units.
The city released six months of 485x data on Wednesday of that week. Of 152 projects registered in the last six months, 20 had exactly 99 units and only one had more, according to a preliminary analysis by Nate Bliss, founder and CEO of Latent Urban Ventures. That one exception is 35-10 Steinway Street in Astoria, a BedRock Real Estate Partners and LMXD project expected to have 560 units. Across all applications so far, 49 projects have exactly 99 units and only four are larger.
About a dozen developers are building bigger by clustering 99-unit buildings on a single site. One recent filing shows 10 adjacent buildings, all just under 100 units. The Building and Construction Trades Council, an umbrella group for construction unions, called this a loophole and asked state legislators to close it. The Real Deal said that seems unlikely.
Industry groups are pushing for changes. A slide by Helen Hwang of Meridian Investment Sales showed a projected yield on cost of 6.1 percent for an actual 99-unit project, versus 5.2 percent at 150 units. Real Estate Board of New York President Jim Whelan said, "We cannot solve a housing crisis 99 units at a time." This was the last data release before the state legislature reconvenes in January, when it may change 485x or create a separate program for larger projects.
Key facts
- Program
- 485x property tax abatement for new rental construction
- Unit thresholds
- Wage and affordability requirements rise at 100 and 150 units
- Recent registrations
- 152 projects in six months; 20 at exactly 99 units; 1 larger
- All applications
- 49 projects at exactly 99 units; 4 larger
- Large exception
- 35-10 Steinway Street, Astoria; about 560 units; BedRock Real Estate Partners and LMXD
- Clustering
- About a dozen developers; one filing shows 10 adjacent buildings just under 100 units
- Yield on cost
- 6.1% at 99 units vs 5.2% at 150 units (Meridian Investment Sales slide)
- Next step
- State legislature reconvenes in January and may revise 485x or add a program for larger projects
What it means
Landlords
Owners weighing new rental construction should expect the 100-unit and 150-unit thresholds to keep driving project size. Any changes depend on what Albany does starting in January.
Tenants and voucher holders
New rent-restricted apartments under 485x are mostly showing up in buildings of 99 units or fewer, sometimes clustered on one site. How many affordable units reach lotteries may shift if the state changes the rules.
Caseworkers
Expect continued new affordable listings from mid-size 485x buildings rather than very large single towers. Watch the January legislative session for changes that could affect the supply of restricted units.
The highlights
- Of 152 projects registered in six months, 20 had exactly 99 units and one had more.
- Wage and affordability requirements rise sharply at 100 and 150 units.
- The state legislature may change the program when it reconvenes in January.
Why it matters Landlords
Fewer large rental buildings may use 485x, which could limit how many new affordable units come online.
What to do: Watch for 485x changes when the state legislature reconvenes in January.
Not known yet
- How many affordable units the 152 registered projects will produce in total
- Which neighborhoods the 99-unit and clustered projects are in
- When the affordable units in these buildings will reach lotteries
- What specific changes, if any, the legislature will consider in January
Background
485x is a New York State property tax exemption for new rental buildings in New York City that replaced the expired 421-a program. In exchange for years of reduced property taxes, developers must set aside a share of apartments at rents restricted by income level, and larger projects carry added construction wage requirements. Affordable units in tax-incentive buildings are generally rented through the city's Housing Connect lottery system, overseen by HPD, with income limits tied to area median income.
Summary written by Bulwark from The Real Deal · New York’s reporting. The original story is at therealdeal.com. This is general information, not legal advice.
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