The massive spike in the number of apartments built in the US last year was almost entirely because of a single city

One city in the US that is responsible for most of the recent apartment boom.

According to Michelle Meyer and the Bank of America Merrill Lynch team, the US saw a startling spike in multi-family housing starts (basically apartments and condos) and New York City was the reason why.

Meyer and company edged down their projection for the number of multi-family starts in 2016 to 375,000, bringing total housing starts down to 1.175 million this year from 1.25 million.

"The downward revision to multifamily starts this year is partly a response to the past three quarters, where multifamily starts declined an average of 31% annualized following the 229% annualized gain in 2Q15," said the note from BAML.

"This volatility largely reflected the rush to start projects in NYC before the expiration of a tax credit. If we subtract NYC building permits from the total, we see a more gradual weakening in building permits over the past few quarters."

The exemption, called 421-a exemptions, allowed developers to get tax relief for building affordable apartment on vacant land. It expired in January of 2016, and based on the economics team's estimation, the pressure to get projects started under the wire led to the spike.

Thus, with the exemption not renewed, the number of multi-family starts should settle in 2016.