The Real Deal New York

Illegal basement apartments seen as one answer to NYC housing shortage

February 18, 2013 12:00PM

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Scott Stringer and brownstones with basement entrances

With New York’s incredibly tight supply of affordable housing, illegal basement rentals are on the rise, especially in the outer boroughs. But some industry experts see the illegal rentals as a boon — not a hazard — to the city and are pushing to change the rules governing what are known as accessory dwelling units, according to Crain’s.

Chhaya Community Development, a group that focuses on immigrant and affordable-housing issues, estimates that there are more than 100,000 illegal basement units renting mostly to young professionals and immigrants across the city.

“They’re really one of the last [affordable housing] options out there,” Seema Agnani, executive director of Jackson Heights, Queens-based Chhaya, said.

A Manhattan-based coalition of housing groups, known as Immigrant Housing Collaborative, has long championed the idea of changing zoning laws to allow for accessory dwelling units — something that cities such as Santa Cruz, Calif., and Orlando, Fla., have already done. But recently the idea received an endorsement from Manhattan Borough President Scott Stringer, which has helped popularize the initiative.

A study from Stringer’s office found that altering the rules surrounding accessory dwelling units could add tens of thousands of affordable units to the city’s legal housing stock and would spur economic growth.

However, some such as CBRE chief executive Mary Ann Tighe has argued that the plan is hardly a panacea for the city’s affordable housing problem.

“Legalizing [dwellings] alone will not materially increase the housing stock since these illegal units are already occupied,” Tighe said. She went on to suggest that converting buildings in manufacturing districts to residential use would have a greater effect. “The city has embarked on rezoning these areas, but there are still more that are underutilized.” [Crain's] –Christopher Cameron

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  • Harlem Landlord

    Finally!!!! It is absurd that these units aren’t legal. I lived in the basement of my parent’s house from the time I was 5 years old until I was 18. In their house my bedroom was actually below grade (that means that if there were a fire and I went out the window I had to climb up, out of the window well.) It was safe. All over America people live in basements and it’s safe.

    Further, most basement apartments in NY are actually above grade (if you went out the window you actually step down to the ground) unlike most of the country where basement apartments are below grade.

    Last year in NYC there were the fewest deaths by fire in over 100 years, people are living in these units already, and they are safe.

    Landlords want these units legalized because it makes their building’s more valuable.
    Tenants want these units because they are a cheap place to live.
    NYers want these units because it will allow the CIty to tax landlord’s more (landlords are currently avoiding property taxes on their illegal units)

    Legalizing these units will force landlords to make them even safer/bring them to code.
    Legalizing these units will allow the City to increase the property taxes on the building.
    Legalizing these units will allow owners to get property insurance on the units.
    Legalizing these units will allow owners to create thousands more of them.
    Legalizing these units will create thousands of jobs.

    • renter

      Legalizing these units will allow owners to get More Rent!

  • Curios

    If they were made legal, would the rent increase substantially? Isn’t the rent very cheap BECAUSE it is an illegal unit?

    • Renter

      you are 100% right if these units become legal the rents will go up .
      Legalizing these units will allow owners to get More Rent!

  • renter

    If these units become legal the rents will go up .
    Legalizing these units will allow owners to get More Rent!

  • CELLARATRENTER

    LEGALIZATION OF BASEMENTS ($ARCHITECT COSTS 10.000) “CELLARS” WILL MEAN MANDATORY CODE BATHROOMS /SHOWERS/KITCHENS VENT LINES / HVAC/ELECT. …($30.000)

    VERMON CONTROL WOULD BE A MAJOR PROBLEM TO OVER COME…
    THE EXPENSIVE SOLUTION WOULD BE NEW “WATERPROOF CONCRETE SLAB”4 OF 5 INCEHS .. WITH STAINLESS STEEL DOUBLE REINFORCED WIRE MESH AND STAINLESS STEEL WALL ANGLES TO PREVENT VERMON RE-ENTRY..AND 5/8 REBAR 1000 SQ FT = 15.00 – 25 DOLLARS PER SQ FT

    THE OLD WOODEN STAIRS WITH RAILING WOULD BE TURNED INTO STEEL STAIRS W/BANISTER 3.000 …..CELLAR/BASEMENT FLOOD DRIANS WOULD HAVE TO BE PLACED IN CERTAIN AREAS CONNECTING INTO THE MAIN WASTE/LEADER LINES 7,700..,,…ESPECIALLY IN FLOOD ZONE AREAS LISTED UNDER “A” ZONING ..(EJECTOR PUMP 5,000) THIS UPGRADE HARD AND SOFT COST ($ 30.000 DOLLARS – 40.000 NON UNION)

    UNION 50.000 TO 75.000 ( NOT INCLUDING THE CONCRETE FLOOR)
    AT PRESENT OWNERS ARE NOT SIGNING LEASES WITH CELLAR TENANTS..THEY OCCUPY BELOW GROUND ON A VERBAL AGREEMENT…CASH WITH NO RECEIPT.

    • West Ender

      You shouldn’t use all capital letters – IT MAKES IT LOOK LIKE YOU ARE YELLING!

  • Harlem Landlord

    Construction costs with arch/permits is $25,000 tops for an already built apartment. $50/60k for new construction. Legalizing with $1,200/month rent for a two bed makes the building worth $100k more and brings in $15k/year of rent. The City will steal $5k of that annual increase in property taxes so the landlord ends up with $8k more (there are other expenses/vacancy etc to consider) in pocket each year. So the $25k to $60k investment makes sense in most cases.

  • Harlem Landlord

    Not sure why commenters are so obsessed with rents going up upon legalization. Even if so (which I doubt) the tenants will get an apartment built to code (nicer). And if rents do go up, the units will still rent at a discount to the other units in the building.

    One thing is certain though, legalization will create many more available units. In 2009 there were 10,000 vacant units on the market and rents went down 20%. Legalizing basement units will easily add 10,000 more units on the market. So it’s hard for me to see rents going up.

  • Susan McLaughlin

    It you have seen television programs like HGTV’s “Income Properties”, basement apartments in Canada are the norm. Some of these are beautiful. If they are legal apartments, they have to conform to code and it’s a win-win.

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