Permits Up, Starts Down

Construction capital is available. Equity returns are the constraint.

One figure in this week’s Census release stands out. Multifamily permits in September ran about 1% above a year ago. Starts were down about 26%.

!Multifamily is approved, but not getting built

The projects are there: land, approvals, drawings. What’s missing is a capital stack that still pencils for the equity at today’s rates. One economist told Multifamily Dive what developers keep telling him. They could start tomorrow, if the money were there. In my experience, the capital is available. What no longer works is the return to the equity.

Much of the disagreement comes down to vantage point. When a sponsor says capital isn’t there, it usually means it isn’t there at the return the equity needs. When a borrower says banks have pulled back, it usually means the ask is beyond the bank’s risk appetite. Both are describing the same gap from different sides of the table.

Meanwhile, in Manhattan, JPMorgan led a $1.1 billion construction loan for Extell’s Times Square tower, alongside $150 million of mezz. Bloomberg reports the bank is also in talks to lead roughly $3.8 billion for Extell’s Upper West Side condo tower.

So construction credit is available. For most sponsors, it’s available at lower leverage and a higher cost, and the difference comes straight out of the equity return.

A permitted site that can’t start this year doesn’t disappear. It can become supply that’s missing in 2028 and 2029, or it can trade. Some of these sites may change hands to owners with cheaper capital. Others may bring in new equity ahead of a bank construction loan.

The question this cycle is what a permitted site is worth today, compared with what it is worth to the one party that can fund the start.

October starts come out November 18.

Sources and methodology

Sourcing note: we cite the organization that produced each figure. Where its own release isn’t publicly accessible, we name the outlet we read it in.
Permits and starts: U.S. Census Bureau and HUD, New Residential Construction, September 2026 (Oct 20; preliminary). Buildings with 5+ units: permits 503,000 and starts 349,000, at seasonally adjusted annual rates.
Developer quote: Greg Willett, interviewed by Multifamily Dive (Oct 20, 2026).
Construction financing:
Upper West Side: Bloomberg (Sept 24, 2026). The loan was reported as in talks, not closed.
Times Square tower: The Real Deal (Sept 25, 2026).