NYC will see a wave of apartment buildings with exactly 99 units for 1 specific reason

They got 99 problems — with a new tax program.

New York City developers have a hit a fresh snag in trying to solve the city’s housing crisis: A new tax program that costs them extra dough if they want to construct buildings with 100 apartments or more.

That new program, 485-x, which was meant to ensure workers got paid more per hour for large-scale multi-family developments, has had the opposite effect.

Bloomberg reports that New York City developers filed 21 applications for residential buildings with exactly 99 units in the third quarter — a notable rise from the 13 filed between 2008 and 2023, citing data from the Real Estate Board of New York.

The city’s housing crisis was a marquee issue that sent voters racing to the polls for the recent mayoral election, and this specific 99-unit trend limits injecting the city with the dose of large-scale development needed to solve it.

Under 485-x, which allows for a tax break should the building contain a certain number of affordable units, developers building addresses with 100 units or more must pay workers at least $40 an hour. That raises construction costs by about 2%, according to REBNY, adding that projects with more than 150 units in certain areas see costs bloat between 10% and 30% due to the wage mandate. The state legislature passed 485-x in 2024, replacing the previous 421-a that expired in 2022, whose labor costs were lower.

In a statement to The Post, when mentioning the location-based costs associated with buildings of 150 dwellings and above, REBNY said that “is why we are not producing the housing we need to solve our affordability crisis. We need tools that will help produce as many units as possible to offset years of citywide underproduction.”

The third quarter overall saw a total of 194 applications for buildings with 99 units or fewer — a figure that accounted for 90% of all residential filings.

Developers and REBNY researchers say the new 485-x program will make it tough to bring larger-scale buildings to the city — and will ultimately lead to fewer units than 421-a provided, per Bloomberg.

Of the units proposed in the third quarter, according to REBNY, 144 were with buildings with fewer than 149 units and 11 were for buildings of 150 units and up. (However, Bloomberg notes that 485-x saw city developers file for 207 multi-family residential buildings in the third quarter, marking a 152% year-over-year jump.)

“It’s critical that policymakers and other advocates do not become complacent in response to the quarter’s housing production totals,” Zachary Steinberg, REBNY’s executive vice president of external relations and advocacy, told Bloomberg. “The strong results come following a decade-plus of underproduction that needs to be addressed and can’t be done 99 units at a time.”