Updated: May 30, 2025
Since the rollout of the city’s new 485-x incentive, the industry has had to confront a hard truth: the program isn’t meeting its expectations.
When 485-x was first announced, the Mayor’s goal was ambitious: to build 500,000 new homes by the year 2032. However, according to a recent article from Crain’s New York, only 118 buildings representing just 2,600 housing units across the city have signed up for the new 485-x program. This represents just 0.52% of the program’s stated goal after nearly a year of operation.
Worse still, the data reveals a trend developers have warned about: the new rules surrounding wage thresholds actively discourage the kind of scale that New York City desperately needs. Every project filed under 485-x thus far has been under 100 units. An unmistakable response to the program’s $40-per-hour wage mandate for projects at or above that size. Some developers have even gone right up to the line with 99-unit buildings.
That’s no coincidence but a clear message: these numbers don’t work.
At a time when construction costs are being squeezed by inflation, rising interest rates, insurance premiums, and now another round of fresh tariffs on critical building materials, layering a rigid wage mandate simply breaks the math. Projects that would have been feasible under the previous 421-a program, or even without any incentives at all, are now being shelved or scaled down. The 485-x program, in its current form, does not pencil out large-scale housing creation, the very type the city needs most.
While there are a few notable exceptions, like the 1,263-unit high-rise in Downtown Brooklyn or Related Cos. ’s 4,000-unit mixed-use megaproject, these projects stand as outliers and are backed by deep institutional capital and political will. The current framework is a non-starter for most developers to build mid- to large-scale multifamily housing in the city.
The truth is, this city’s housing crisis cannot be solved with boutique solutions. It requires scale, speed, and sustainability, none of which are reflected in the current 485-x numbers. With only 540 of the 2,600 units deemed permanently affordable, the program also falls short of delivering meaningful relief to the tenants who need it most.
We’re not asking for a blank check or a return to the past. We’re asking for a tax incentive structure that reflects economic reality, a program that encourages scale, rewards affordability, and offers flexibility in labor compliance without rendering projects unviable.
It’s time to go back to the drawing board and bring everyone to the table: developers, laborers, city officials, and community stakeholders. Let’s create a version of 485-x that works for all of us.
Because right now, it’s not working for anyone.
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Cahill Strategies is a team comprised of skilled construction industry strategists dedicated to guiding clients through the intricate regulatory and political landscape, resulting in propelling projects within New York City to completion. Our expertise lies in representing large general contractors, sub-contractors, construction management firms, design professionals, and owners/developers.
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Cahill Strategies has experience representing large general contractors, construction management firms, owners, and developers. A key to our success is our vast network of decision makers that we have the ability to reach on your behalf. Additionally, our team is involved in the legislative and regulatory processes at the Federal, State, and Local levels which affect the construction industry in New York State, New York City, and surrounding regions. We possess the knowledge of industry standards and trends, along with key relationships that will bring your projects to fruition. Read more…
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Get to know Bobby D’Alessio
Robert “Bobby” D’Alessio, is a former New York City Department of Buildings Senior Executive Director of Construction Safety. Mr. D’Alessio’s focus is predominately in the areas of construction code and safety analysis for our clients’ major new building and renovation projects in the New York City and surrounding regions.
As Cahill Strategies’ Director of Construction Code and Safety, Bobby brings an unparalleled level of knowledge and practical experience to our growing construction solutions practice area.
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Bernard “Bernie” Ross is former New York City Department of Buildings Director of Construction Safety Enforcement. With more than 20 years serving the DOB as a Construction Inspector, Supervising Inspector, Director Major Projects, and finally, Director of Construction Safety Enforcement. Read more about Bernie here…
Get to know Kevin Moran
Kevin, the Vice President of Construction Solutions at Cahill Strategies, brings a wealth of experience in the New York construction industry to his role. He has a strong track record of guiding clients through complex building processes, with a range of successful projects under his belt, including commercial and residential developments, infrastructure and transportation projects, and various utility matters.
