Among newly built residential buildings in New York, the "99-unit" design is spreading. Because when real estate developers use New York state's tax incentive program, they must pay workers a certain minimum wage starting from 100 units and up, developers are deliberately designing for 99 units even when they could add more units.
On the 13th, Bloomberg, citing a report by the Real Estate Board of New York (REBNY), reported that there were 21 permit applications for 99-unit buildings submitted by developers in the third quarter of this year. That is more than the total of 13 applications received over the past 16 years (2008–2023). In addition, applications for buildings with 99 units or fewer reached 194 in the third quarter, accounting for 90% of all residential building applications.
The reason developers are uniformly sticking to 99 units is the newly introduced wage rule. The New York State Legislature passed the 485-x tax abatement program last year, which exempts real estate developers from property taxes for up to 40 years if they secure a set percentage of low-income dwellings based on the number of units.
The issue is that for buildings with 100 units or more, the rules require paying construction workers at least $40 per hour (about 59,000 won) and increasing wages by 2.5% each year. For buildings with 150 units or more, workers must be paid at least $63 per hour, with wages also increasing by 2.5% annually. In contrast, these wage requirements do not apply to buildings with 99 units or fewer.
Bloomberg said, "Developers are increasing applications for buildings sized exactly 99 units to avoid higher labor costs." REBNY researchers and developers argued that 485-x will dampen dwellings supply in large-scale projects compared with the previous tax abatement program.
In practice, real estate developer MaryAnne Gilmartin had planned to build two 400-unit rental apartment buildings in New York, but considering 485-x requirements, is now reviewing building six apartment buildings with fewer units per building. Gilmartin explained that while this change in plans will take more time and expense, it is a more financially advantageous choice.
However, Bloomberg said an increase in dwellings development due to 485-x has been confirmed to some extent. According to REBNY data, developers applied for 207 multifamily residential projects in the third quarter of 2025, a 152% increase from a year earlier.
Zachary Steinberg, REBNY's vice president of external affairs and policy strategy, said, "Policymakers and stakeholders should not be complacent about this quarter's increase in dwelling production," adding, "This uptick comes amid more than a decade of dwelling shortages, and a rise in 99-unit projects alone is not sufficient to solve it."