New York City developers are increasingly designing 99-unit apartment towers to sidestep prevailing wage requirements for construction workers on larger projects. This approach, gaining traction amid ongoing housing shortages, leverages a technicality that exempts buildings under 100 units from those rules, potentially spurring a wave of mid-sized developments across boroughs like Brooklyn and Queens. As the 2025 mayoral race heats up, such tactics underscore evolving strategies in the city’s affordable housing push, with experts outlining roadmaps for the next administration to address these gaps.
Loopholes in Wage Regulations Fueling New Builds
Developers in New York City are increasingly opting to construct 99-unit buildings as a strategic move to avoid the city’s wage rules that require higher pay for workers on projects with more than 100 units. This trend has been highlighted in a recent analysis, which notes that this design choice is leading to a noticeable increase in proposed mid-rise towers. These projects are often located in high-demand areas, such as the outskirts of Manhattan, where developers aim to maximize cost savings without triggering labor mandates.
The shift towards 99-unit buildings marks a departure from the larger-scale developments that were more common in previous years. This change is partly driven by the pressures of post-pandemic construction costs and updated city guidelines. By avoiding the wage requirements, developers can reduce expenses, making these projects more financially viable. This strategy is becoming increasingly popular as developers seek to balance the need for new housing with the economic realities of construction in New York City.
However, this approach raises concerns about the potential impact on workers’ wages and benefits. By designing buildings that fall just below the threshold for higher wage requirements, developers may be undermining efforts to ensure fair compensation for construction workers. This issue is particularly relevant as the city grapples with a housing shortage and the need for affordable housing solutions.
Tax Incentives Accelerating the 99-Unit Trend
A specific tax program is also contributing to the rise of 99-unit apartment towers in New York City. This program offers abatements for qualifying mid-sized residential projects, exempting them from certain property taxes during development. According to a report, dozens of such towers are currently in the pipeline for completion in 2026, with many concentrated in transit-accessible neighborhoods to align with zoning incentives.
This tax incentive builds on earlier frameworks but introduces tighter eligibility criteria tied to unit counts. Unlike previous updates that favored larger complexes, this program signals a pivot towards smaller, more feasible builds. The focus on mid-sized developments reflects a broader trend in urban planning, where cities are increasingly looking to balance density with livability.
The implications of this trend are significant for both developers and residents. For developers, the tax incentives provide a financial boost that can make these projects more attractive. For residents, the increase in mid-sized developments could lead to more housing options in desirable areas, potentially easing some of the pressure on the city’s housing market. However, there is also a risk that these developments could contribute to gentrification, particularly in outer boroughs where housing costs are already rising.
Housing Policy Shifts Ahead for the Next Mayor
As the November 2025 mayoral election approaches, housing policy is emerging as a key issue. Policy roadmaps emphasize the need to reform wage exemptions and tax programs to boost overall housing supply without undermining worker protections. A report by Vital City outlines strategies for the incoming administration, including proposals to cap loopholes in 99-unit designs while expanding incentives for truly affordable units in these towers.
Stakeholders, from developers to tenant advocates, highlight the urgency of these changes. There is a growing concern that unchecked trends could exacerbate gentrification in outer boroughs, as smaller developments replace stalled mega-projects from previous cycles. The next mayor will need to navigate these complex issues, balancing the need for new housing with the imperative to protect workers and maintain affordability.
The stakes are high for New York City, where the housing crisis continues to be a pressing challenge. As developers and policymakers grapple with these issues, the decisions made in the coming months could have lasting impacts on the city’s housing landscape. By addressing the loopholes and incentives that drive the 99-unit trend, the next administration has an opportunity to shape a more equitable and sustainable future for New York City’s residents.
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Elias Broderick specializes in residential and commercial real estate, with a focus on market cycles, property fundamentals, and investment strategy. His writing translates complex housing and development trends into clear insights for both new and experienced investors. At The Daily Overview, Elias explores how real estate fits into long-term wealth planning.
