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NYC shifts 485-x housing builds toward larger units with fewer studios
More than 90% of NYC housing permit applications in the first three months of 2026 were for projects with 99 units or fewer under the 485-x prevailing wage rules.
New York City apartment developers are building fewer studio units as they try to make the 485-x tax abatement work, industry participants said at Bisnow's 2026 New York Affordable Housing Conference.
The prevailing wage requirements tied to 485-x have steered most projects toward 99 units or fewer, even on sites with capacity for more apartments. Developers are instead attempting to maximize site value by adding bedroom counts, which they said translates into more affordable units for families, including three-bedroom options that have been “sadly lacking.”
Recent permitting data backs up the shift, with more than 90% of housing permit applications filed in the first three months of 2026 for developments with 99 units or fewer, according to the Real Estate Board of New York. Other reporting cited by Bisnow said the policy has resulted in 538 fewer apartments than sites could have produced.
Speakers also said the restrictions have not stopped development, with activity continuing as developers pursue sites that can support viable 485-x projects. One Fogarty Finger director described two Manhattan projects that left more than 40 units each off the table by capping at 99 units.