New York City saw a sharp pullback in construction activity in the second quarter of 2026, with developers filing plans for approximately 9.2 million square feet of new projects across 387 new building applications. According to the Real Estate Board of New York (REBNY), both measures represent a significant slowdown from the first quarter, with total planned square footage down 56% and the number of filings lower by 33% quarter-over-quarter.
Multifamily development in particular lost momentum. Of the 387 filings submitted in the second quarter, 172 applications were for proposed multiple-dwelling buildings. Those projects together account for just 8,064 residential units, a 52% decline from the prior quarter, REBNY reported in its New Building Construction Pipeline Report. The quarterly output now falls well short of the 17,500 units that city officials say must be started each quarter in order to reach a goal of 700,000 new homes over the next decade and address the ongoing housing shortage.
The composition of the development pipeline is also shifting as the city transitions away from projects that were able to vest under the now-expired 421-a tax incentive program. REBNY noted that new filings increasingly depend on the emerging 485-x program or other funding mechanisms as developers seek to make projects financially feasible without the earlier incentive framework. The report indicates that this policy transition is occurring at the same time that new filings are shrinking, particularly for larger multifamily buildings.
Recent application data highlight a growing emphasis on smaller multifamily properties. Second-quarter filings showed a notable concentration of projects with fewer than 100 units, while filings for larger developments dropped. REBNY found that the number of proposals with 100 units or more fell from 25 in the first quarter to just 9 in the second quarter, underscoring the reduced pipeline of large-scale multifamily construction at a time when the city is attempting to significantly increase housing production.
REBNY leadership framed the latest data as a signal that current policies and incentives are not yet sufficient to support the level of housing creation desired by policymakers. Basha Gerhards, the organization's executive vice president of public policy, said the decline in proposed construction this quarter serves as a warning that New York has not created the conditions needed to sustain the delivery of new homes at the scale required to address the city's housing supply crisis. With filings falling well below targeted production benchmarks, the report suggests that further adjustments to the city's development and incentive framework may be necessary to rebuild momentum in the pipeline.
