The program could convert thousands of currently unpermitted basement units into legal Ancillary Dwelling Units (ADUs).
Together, the two developments will bring 108 new affordable condominium homes to market.
The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($806,500 or less) increased to 6.37% from 6.34%...
The program could convert thousands of currently unpermitted basement units into legal Ancillary Dwelling Units (ADUs).
The Adams Administration has released proposed rules that would launch a new pilot program to legalize existing basement and cellar apartments in one- and two-family homes—an initiative that could directly impact property owners, small landlords and the broader housing market.
With New York City’s vacancy rate at 1.4%, thousands of households rely on informal basement units. This pilot program created under Local Law 126 of 2024, is designed to bring those units into compliance safely while keeping eligible tenants in place.
The program could convert thousands of currently unpermitted basement units into legal Ancillary Dwelling Units (ADUs), increasing available housing options in neighborhoods with extremely limited supply.
Participating homeowners can legalize existing units without penalties if they meet milestone requirements over a 10-year timeline. Once fully legalized with an amended Certificate of Occupancy, these units can significantly enhance property value and rental income opportunities.
Units must:
Tenants living in these units as of April 20, 2024, will receive a right of first return if temporary relocation is needed for safety-related construction. Owners must provide clear written notices, timelines and a lease upon return.
Legalization will require improvements, such as sprinklers and flood-water sensors—key points to flag for clients considering participation.
Upcoming Public Hearings
Realtors should be aware that final rules will shape how owners can navigate compliance and how these units may enter the market over the next decade.
As New York City continues to push forward on ADUs as a tool for housing supply, we will stay closely engaged and provide updates on how this impacts transactions, valuation, and homeowner advisory conversations.
About the author: Dr. Jermaine Meadows is the Director of Government Affairs for the Bronx and Manhattan for the Hudson Gateway Association of Realtors.
Owners who delegate rent-setting to third-party property managers, real estate brokerage firms and brokers that also offer property management services, or owners who use national “revenue management” platforms should review and update their contracts well before the Dec. 15, 2025, effective date.
The rally underscored our industry’s leadership in advancing housing policy and demonstrated the collective strength of Realtors when we unite around a common cause.
For Realtors, this moment is about more than voting it’s about advocacy, leadership and accountability.
The role of an LPC includes attending public meetings, tracking local legislation, reporting back to HGAR’s Government Affairs team, and supporting the association’s broader communications strategy.
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