New York Multifamily Market
State Removes Hurdles for Conversions;
Regulated Units to See Faster Rent Growth
Supply pipeline gives tight rental market some relief. New York City marked its third consecutive quarter of 1.8 percent vacancy at the end of June, maintaining a two-decade low in this metric. While availability in Class B and C units held at multidecade lows, the Class A rate jumped 50 basis points last quarter as renters in this tier consolidated households or moved to less expensive units. Concurrently, supply growth is continuing at an annual pace exceeding 20,000 units, keeping overall availability from tightening further. Additionally, a state housing bill recently signed into law will ease the permitting process for hotel-to-multifamily redevelopment by allowing converted properties to keep current certificates of occupancy. The bill also allocated $200 million in state funding for adaptive reuse undertakings, suggesting these projects could account for a larger share of the metro's active pipeline moving forward.