As New York City continues to grow, demand for housing has led to a dramatic expansion of the city’s informal housing market. By some estimates there are more than 100,000 illegal dwelling units across the city, often providing an affordable alternative for households priced out of the formal market. Such units have existed since authorities began regulating housing but became a particularly acute problem after World War II when owners opened their homes to returning war veterans.

Today, new immigrants often find these units through family connections and other social networks.

A similar economic rationale exists on the supply side as well. For owners, carving separate dwelling units out of existing structures provides a steady source of rental income. In many cases, illegal units have allowed for an expansion of ownership, as rental income is used to enhance financing ability and make monthly housing payments. In some cases, housing prices reflect the mere possibility of creating a secondary dwelling unit even when one does not exist.

In this report, we partnered with Chhaya CDC, a community-based organization working with new immigrants in the borough of Queens to estimate the number of such units in two specific geographic regions and to assess the potential for owners to legalize existing units. The survey tool was developed using the Census Bureaus triannual Housing and Vacancy Survey of New York City, thereby allowing comparability testing against the results. Additionally, the survey sought to provide insight into the current safety conditions of secondary basement units and assess the amount of work that would be needed to bring units up to code.

The two areas selectedone in Jackson Heights and the other in the Briarwood/Jamaica section of Queenshave very different housing stock characteristics, zoning, and histories of development. What makes the communities similar is that more than 55 percent of their populations are foreign-born, local schools are at or above 100 percent utilization, and overcrowding is a significant issue. In the Jackson Heights survey area, more than 41 percent of homes surveyed had received a complaint related to an illegal conversion; and in the Briarwood neighborhood, nearly 17 percent had. And finally, both communities have been greatly affected by an increasing number of mortgage delinquencies and defaults related to the housing market turbulence.

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