Ninety-nine apartments on the lot, ninety-nine apartments in the plans, and rarely a 100th. New York developers are registering new buildings for a state property tax break at exactly 99 units, apparently to avoid tripping a higher wage requirement.
The Oct. 14 release of city registrations for the program, called 485-x, added 20 projects with exactly 99 units and none with 100 to 104, according to Latent Urban Ventures, a New York real estate and technology firm. It added one registration at 100 or more units. Across the April and October releases, 49 registered projects have exactly 99 apartments.
The pattern appears before projects register. As of Sept. 20, Department of Buildings records show 112 unregistered projects with exactly 99 units and one at 100, Latent Urban found.
The pipeline also holds 148 unregistered projects of 100 or more units, and 80 appeared to have started construction. Latent reviewed 74 and ruled out 62 as using other housing programs, being condominiums or falling outside the rental pipeline. Of those 62, 61 are absent from the latest release.
Among projects that began construction between April 1 and Sept. 20, 63% of those at 99 units had registered by Sept. 24, or 17 of 27. Only one of 24 projects at 100 or more units had registered. Some are still inside their six-month registration window.
Critics call the 99-unit cap a loophole
Mayor Zohran Mamdani won with a promise to make New York more affordable and build more homes. His housing plan aims for 200,000 new affordable homes over a decade.
485-x is one tool for that goal. It exempts developers of new rental housing from property taxes in exchange for income-restricted apartments. The Legislature enacted it on April 20, 2024, in the state budget, almost two years after its predecessor, 421-a, expired.
At 100 units, the required affordable share rises from 20% to 25%, according to program summaries. Construction workers on larger projects must also be paid at least $40 an hour, rising 2.5% a year in certain city zones.
Developers have responded by clustering projects into 99-unit buildings, even when the buildings are attached. A Gothamist analysis found 48 clusters of adjacent buildings with 99 or fewer units between April 2024 and April 2026. Developers in those clusters added 538 fewer affordable units than larger buildings would have required, a 21% shortfall, according to the analysis.
In East Harlem, Clipper Equity filed to split a lot into seven 99-unit buildings. That would require 35 fewer affordable apartments than one 700-unit building.
Labor unions call the tactic a loophole. Gary LaBarbera, president of the Building and Construction Trades Council, told Gothamist developers are “ripping off the taxpayers.”
Developers have regularly said the wage requirements make projects above 100 units financially unworkable.
What to watch
Six larger projects began construction in late June or July, and their registration deadlines run as late as Feb. 19, 2027. Future releases will show whether they enter the program.
Latent cautioned that the data can’t separate the program’s effects from interest rates, construction costs and rents. It also doesn’t show how many more apartments the 99-unit sites could hold.
For now, the Mamdani administration has said publicly it isn’t advocating changes to 485-x. State lawmakers also haven’t said they plan changes.
