Let’s try to build an apartment in NYC - Fried Kielbasa

Fried Kielbasa

SubscribeSign in

Let’s try to build an apartment in NYC<br>It won't go well

Fried Kielbasa<br>May 15, 2026

22

Share

So you have a plot of land in New York. You want to put an apartment building on it. What does it look like to actually accomplish this?<br>A pretty usual New York City plot of land that you would put an apartment building on is 25 feet by 100 feet. This is pretty common in brownstone Brooklyn and parts of Manhattan. Let’s say this is what you inherited and you own it free and clear.<br>Considering we’re in a housing emergency, I’d say that it’s essential that such a standard piece of land be easily turned into new housing. In an ideal world, it’d be easy to construct some new apartment units for people to live in.<br>Unfortunately, due to the weight of regulations, which individually can be defensible or even crucial, this apartment building that you’d like to construct won’t pencil out.<br>Let’s walk through why it matters. It’s worth saying — high housing prices are the result of supply and demand. New York has had a rental vacancy rate below 5% — the legal definition of a housing emergency — for decades. As of 2023 it was 1.4%, the lowest since 1968. If there is a profit to be made, people will seek profit. A lot of housing comes from people who seek a profit — they’d love to build housing if possible!<br>Here’s the number we’re going to track: $4,000/month. That’s a good assumption on what the market will pay for a new one-bedroom. It’s the rent you can realistically collect from each unit once the building is standing. We’re going to watch this $4,000 get eaten by regulations, line by line and — spoiler alert — you’ll not only not make money, but you’ll be losing $3600 a month. It’s no wonder that more housing isn’t being built here.<br>Design

Let’s say that your place is in Manhattan, in the East Village. This means that one of the zones that’s prevalent there is R7A. Let’s say that your plot falls under that zone. In case you’re curious, you can see what zones exist in New York City at this link. Zoning regulations explain what the city allows you to build on that plot of land.<br>Since you’re in an R7A zoning district—a medium-density residential zone that actually allows apartment buildings as-of-right, this means you don’t need to beg the city for permission. Much of New York doesn’t allow this. Vast swaths of the city are zoned exclusively for single-family homes, untouchable without a years-long rezoning process you have no intention of starting. This is a generous assumption — in many cases you need to do the rezoning.<br>Based on the zone, you’re not allowed to build as many units as you’d like. You’re limited by a concept called FAR, which stands for floor area ratio — fundamentally it’s a regulation on the level of density a lot can have. For R7A, the FAR is 4.0 — this means that since you have 2,500 square feet of land you will be able to build 10,000 square feet total for the units of the building.<br>FAR isn’t actually the binding constraint here — the total volume restriction is. Raising FAR wouldn’t help much. Height limits and yard requirements would cap you at roughly the same density. The deeper problem is spreading fixed costs (architect, engineers, elevator) across a handful of units. This makes building a smaller apartment unlikely.

You’re limited to 85 feet high, but fortunately you won’t be going anywhere near that at 10ft per floor.<br>The shape of your building is also determined by the zoning regulations. You’ll need to have your wall up against the street for at least 40 to 65 feet (depending), and then you’ll be required to set your wall back at least 10 to 15 feet (also depending). This means that you can’t decide the shape of your own building — the aesthetics are set by regulation.

A small blessing, isn’t it, that parking isn’t required in this area? City of Yes recently removed parking requirements for Manhattan.<br>You’ll need a rear yard. Yes, I agree it’s wonderful for residents, but as Jerry Reed said, “I was gonna do what’s right, give ‘er her fair share but, boys, I didn’t know her share was gonna be that much”. Unfortunately, you’re required to give a 30 foot yard at minimum, which leaves you with 70 feet of buildable depth.<br>You are also required to only cover 65% of the lot, so despite the required rear yard, you’ll still need to cut down the lot coverage a touch more, so you’re at the required coverage percentage. Fortunately, you get to choose where to cut down the floor area!<br>Your 2,500 sq ft lot gives you 10,000 sq ft at FAR 4.0. But the 65% lot coverage cap limits your footprint to 1,625 sq ft — which on a 25-foot-wide lot means a building 65 feet deep, comfortably inside the 30-foot rear yard. Following the setback rules you get 9,375 sq ft, six stories, six units.<br>This means the building will be rather small — which means it’s unrealistic for New York. Fixed costs, like dealing with permits, or an...