Basement Apartment Conversion Pilot Program Interim Report

New York’s expensive and highly constrained housing market drives many low-income residents with little housing choice into informal rental apartments that exist outside of City oversight. Many of these households rely on basement and cellar apartments for housing that is financially attainable, in proximity to a job or school, or within a desired community.

The existing thicket of overlapping and restrictive regulations reinforces a dynamic in which these units are created and remain in the gray market, jeopardizing the safety and security of both tenants and homeowners. The primary purpose of the East New York pilot is to test the efficacy of reforms facilitating the creation of basement and cellar apartments and to identify additional barriers to their safe and legal use.

As a program evaluator, CHPC has monitored the pilot’s progress since its inception in 2019. In that time, the pilot has exposed the significant costs of overlapping and outdated City and State regulatory regimes and provided direction for the reforms needed to create an effective, scalable conversion program.

Key takeaways from the interim report include:

• The State’s Multiple Dwelling Law (MDL) and the City’s Zoning Resolution considerably restricted program eligibility and substantially increased the cost of legally renovating basement and cellar apartments.
• Thirty-six percent of properties were dropped from consideration during pre-screening because they were unable to accommodate required parking.
• Forty percent were excluded after home assessment because conversion of basement or cellar space would exceed maximum allowable floor area.
• The regulations that impede legalization have no appreciable benefit to safety. In fact, the cost and limitations imposed by these requirements often stand in the way of undertaking essential safety retrofits like the addition of egress windows.