De Blasio Administration Proposes Pilot Basement Conversion Program

Mayor Bill de Blasio and Council Members Brad Lander, Rafael Espinal, and Inez Barron recently proposed legislation to establish a three-year demonstration program to facilitate the creation and renovation of apartments in the basements and cellars of certain one- and two-family homes in Brooklyn Community District 5. The city will allow for the creation of new apartments in this area through the modification of existing Housing Maintenance Code, Fire Code, and Construction Code standards, coupled with existing allowances for home conversions and the allocation of funds to assist with these renovations.

Tenants in illegal basement and cellar apartments typically have no lease, have limited rights, and live in substandard conditions. This bill would add to New York City’s existing housing stock by allowing property owners to create safe and legal apartments in their buildings. The city will also use the pilot to identify and learn about how to overcome barriers that owners face when seeking to convert basement units.

Modifications of code standards include minimum ceiling heights and window sizes in basement and cellar spaces and strengthened requirements for emergency egress and fire safety. Each proposed modification to the code standards for this program took into account the obligation to preserve the health and safety for the occupants of these apartments. The changes will modify requirements in order to reduce costs and facilitate the conversion of new residential units.

HPD is looking to identify a community-based organization (CBO) to administer the demonstration program on its behalf. The financing program, which will provide low-interest financing to qualified homeowners to assist in the creation of habitable basement apartments, will launch later this year. HPD will fund the selected CBO to provide technical assistance, including working directly with homeowners to apply for and close on financing from the agency, helping them select an architect and contractor from a pre-qualified list, assisting in the temporary relocation of any tenants, and helping to monitor construction and lease up their unit upon completion of the renovations. With assistance from the CBO, the owners will work directly with qualified contractors to renovate their basements in compliance with modified code standards. To qualify for the program, a homeowner must have an income at or below 165 percent of Area Median Income, and occupy the home as his or her primary residence.