New York Developers Split Projects to Avoid Housing Rules
Building exactly 99 units allows developers to bypass higher affordability mandates and labor wage requirements.
Updated on Oct. 15, 2026 in Apartments
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As of September 20, 2026, Department of Buildings records reveal 112 residential projects in New York City structured at exactly 99 units. Developers are using this specific building size to bypass affordable housing and wage requirements mandated by the state 485-x program.
Why it matters
By capping projects at 99 units, developers avoid a requirement to allocate 25% of units to affordable housing, opting instead for a 20% threshold, and escape a $40-per-hour minimum construction wage mandate. This strategy has resulted in a loss of 538 affordable apartments across the city.
Developers have created 48 clusters of adjacent buildings to stay under the 100-unit threshold, resulting in 538 fewer affordable units. Projects under 100 units require only 20% affordability, compared to 25% for larger developments.
The players
Clipper Equity
A real estate developer and property manager that has filed to split an East Harlem lot into seven separate 99-unit buildings.
Department of Buildings
The city agency responsible for enforcing building codes and maintaining records of all active construction and development filings.
The details
The 485-x program, enacted in April 2024, links tax exemptions to specific affordability and wage mandates that trigger once a project hits 100 units. To circumvent these rules, developers are splitting large land parcels into multiple, smaller building footprints or clustering adjacent designs to keep every individual building at exactly 99 units. This maneuver effectively exempts the projects from higher labor costs and deeper affordability obligations.
Timeline
April 20, 2024: The Legislature enacted the 485-x program.
April 2024 to April 2026: Developers built 48 clusters of small buildings.
September 20, 2026: Department of Buildings recorded 112 unregistered 99-unit projects.
February 19, 2027: Deadline for registration of six larger projects.
The Home Front
This trend highlights a widespread developer strategy to avoid the higher regulatory costs built into the 485-x program. By splitting large developments into smaller, legally distinct buildings, firms are effectively minimizing their mandated contributions to citywide affordable housing.
Renters looking for new construction may find that these smaller, subdivided projects offer fewer affordable housing slots than anticipated. If you are tracking the progress of a specific development in your neighborhood, check Department of Buildings records to see if the site is part of a larger, clustered filing.
The takeaway
Developers are effectively side-stepping city affordability goals by keeping project sizes just below the 100-unit regulatory threshold. Residents can monitor local development by reviewing building permit applications on the official city portal to see if their local lot is being subdivided to avoid these mandates.
Further reading
For more insight into how building regulations influence local rental market development, visit Apartments.
Source note: This article includes information reported by HousingWire.
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