New York City may pay you to build a ‘granny flat’

Making it easier to build basement apartments, cottages, and other extra units has become an attractive way to encourage development in states and cities dealing with high housing costs.

Rents in the new apartments would also be capped -- at around $2,600 for a one-bedroom apartment, for example. Adobe Stock

By Mihir Zaveri, New York Times Service

November 24, 2023

NEW YORK — To address the big problem of New York’s housing crisis, the city is trying something small: payments to homeowners to build apartments in their garages and attics.

On Tuesday, officials are announcing a program that would give 15 owners of single-family homes up to $400,000 each for such projects, which could include building detached units or retrofitting basements.

Recipients will be restricted by income — the ceiling for a family of four will be $232,980, with priority given to lower incomes — and those interested will be able to apply on the city’s website Tuesday. Rents in the new apartments would also be capped, at around $2,600 for a one-bedroom apartment, for example.

Maria Torres-Springer, the city’s deputy mayor for housing, economic development and workforce, acknowledged the effort was modest.

“We hope that it’s just the type of program that builds momentum, shows what’s possible and that demonstrates to New Yorkers how we can build housing in every neighborhood in the city,” she said in an interview.

Making it easier to build basement apartments, cottages, and other extra units has become an attractive way to encourage development in states and cities dealing with high housing costs.

Supporters say the model helps homeowners earn money and can be great for older people trying to find affordable places near their families, which is why the units are often called “granny flats.”

But complicated regulations make them costly to build and maintain in New York City — at least legally, said Howard Slatkin, executive director of the Citizens Housing and Planning Council, a nonprofit advocacy group.

Plenty of unregulated homes already exist illegally, in basements and cellars that can be so unsafe that they can turn deadly in floods and fires.

Government attempts to change the regulations and encourage the development of such units under rules that make them safer have largely failed. Suburban legislators helped stymie Governor Kathy Hochul’s attempt this year to ease some of the restrictions.

A pilot program in New York City that started under former Mayor Bill de Blasio to convert basements into safe and legal apartments failed mainly because of the cost of renovation. Only one basement is being converted through the program so far. In some cases, regulations would have forced homeowners to add sprinklers in every room or protective railings along the roof if they wanted to add a unit in the basement.

The program being announced Tuesday targets areas where current codes already allow homeowners to add another unit. It comes as the administration of Mayor Eric Adams is also pushing zoning changes that would allow people in a broader swath of the city to add additional units.

While most people might think of New York City as a densely populated place with big apartment buildings, lower-density neighborhoods make up more than half of the city’s land, Slatkin said.

That’s why the program seems promising, he said. It “helps ordinary homeowners who don’t have the kind of access to capital that a builder on their own might have,” he said.

“This is the way that you can produce housing at a relatively low cost,” he said.

This article originally appeared in The New York Times.