“Granny flats” in play as landlords debate potential new rules on basement units

Housing advocates and landlords support the idea of legalizing “granny flats” — they just don’t agree on how to go about it.

The measure, showcased at a state Assembly hearing on Wednesday, is billed as a way to allow property owners to bring basement apartments and structures up to code, leading to tens of thousands of affordable housing units. While the Real Estate Board of New York said legalizing such apartments is a “common-sense solution,” it took issue with a good cause eviction provision.

Under the plan, landlords would be banned from removing a tenant from a so-called auxiliary dwelling unit if the eviction is because of an “unreasonable” rent hike of more than 3 percent or 1.5 times an increase in the Consumer Price Index, whichever is higher. REBNY says that formula doesn’t consider how adding a legal apartment could change a property tax assessment. The group also said the bill may let courts say that rent increases below the threshold are also unreasonable.

Without establishing income restrictions for the units, the bill doesn’t necessarily serve those most in need of housing and could “inadvertently jeopardize the stability of homeownership as a primary wealth-building tool for low-income owners,” REBNY wrote in prepared testimony.

“This means that rents may still be set at a level that is a burden to tenants or creates a perverse scenario where a fixed-income or limited-income property owner is subsidizing the rent for a higher-income tenant,” the group wrote.

This year Assembly member Harvey Epstein and Sen. Pete Harckham introduced a measure that would, among other things, require local agencies to authorize at least one accessory dwelling unit on lots zoned for single-family or multifamily use and would bar local governments from setting a minimum ceiling height of more than seven feet. (New York City recently approved lowering the minimum ceiling height for basement apartments in two-family homes to seven from height.)

The debate has heated up in recent months after 11 people were killed in such units after torrential rains flooded the city. Advocates say the deaths underscore the need to ensure the safety of those who live in basement apartments, of which there are more than 100,000 across New York. Other states and cities have legalized ADUs, although there’s some question if such a policy can be applied statewide in New York, or if the authority lies strictly with individual municipalities.

The de Blasio administration previously set out to expand a pilot program for basement apartments, but city funding for the initial stage in East New York was subsequently gutted. In a joint letter to Gov. Kathy Hochul, Mayor Bill de Blasio, Democratic Mayoral nominee Eric Adams, Assembly Speaker Carl Heastie, Senate Majority Leader Andrea Stewart-Cousins, housing groups said “punishing and criminalizing basement apartments will not make basements safer and will not save lives.”

“Instead, it will only create more fear and suspicion, preventing the ability to work with owners and tenants to upgrade these units,” the group wrote in the letter. “Currently, many people living in illegal basement apartments have a choice between unsafe conditions and homelessness. Some homeowners have a choice between renting out an illegal basement apartment and foreclosure. These cannot be the only options.”