NYC’s basement legalization plan trips over its own rules

New York’s bid to bring thousands of illegal basement apartments up to code is landing with a thud as housing advocates warn that proposed rules could scare off the very homeowners the program is designed to help.

The Department of Buildings’ draft regulations — including a requirement for giant, five-inch red lettering marking basement entrances — have become a symbol of what critics describe as a burdensome approach to the pilot program, according to The City. The signage rule specifically was mocked by the Citizens Housing and Planning Council, which unveiled an eight-foot banner to show just how impractical it would be.

The pilot is meant to give owners in designated neighborhoods a 10-year path to legalize otherwise off-the-books units without triggering the state’s tougher multiple-dwelling law. In theory, tenants could remain while owners incrementally bring their apartments up to code.

But advocates and attorneys say the fine print exposes owners to steep penalties and tenants to displacement if owners can’t meet the conditions, a dynamic that could keep already wary homeowners from enrolling.

“This rule… would ensure that no one registers and comes out of the woodwork because it’s too risky,” Citizens Housing and Planning Council’s Howard Slatkin told the publication. Pratt Center policy director Sylvia Morse called the rules unworkable and warned that the program is set up to “fail.”

The stumbling blocks go beyond signage. The rules require an apartment to have a full kitchen with a window, utilities and proper hookups. But owners cannot legally pull permits to install those features without first having a legal unit; that’s the kind of catch-22 that doomed the city’s earlier basement pilot in East New York, where not a single homeowner made it through the process.

HPD’s companion regulations also raise questions about tenant protections. While existing residents would have a nominal right to return after construction, they must have lived in the unit since April 2024 and vacate within 30 days of notice from owners. Tenant advocates say that the timeline is unrealistic for low-income renters in a market with vanishing affordability.

Basement apartments remain essential, if risky, housing for tens of thousands of New Yorkers. After Hurricane Ida’s deadly flooding, the push to bring these units above board gained urgency.

The Adams administration has paired the pilot with its “City of Yes” zoning push to unlock accessory dwelling units citywide. But unless DOB and HPD rework the rules in response to public feedback, the city risks repeating its 2019 failure and leaving a major source of informal housing stuck underground.

— Holden Walter-Warner