NYC’s Potential Basement Bonanza

Basement apartment unit with kitchen and hardwood floorsAnyone who’s lived outside of Manhattan knows the deal: there are dozens of basement dwellings up for rent any day of the week in the five boroughs. Known as ADUs (accessory dwelling units), they’re nearly all based out of row houses and condos in outer boroughs, particularly in low-rent neighborhoods. You won’t be able to find them on all the major sites, however, because these spaces are, and always have been, illegal.  Even with all the standard requirements — two exits, windows, proper ventilation, running hot water, etc — these units are illegal because they are more than 50% below ground.

If you’ve ever lived in your parents’ basement, it’s not hard to see why the city has outlawed these dwellings for decades. Most landlords don’t bother keeping their basements furnished or in any state of repair, and they don’t have to because basement renters won’t complain. They’re caught in the catch-22 of NYC apartment rentals: they can’t report irresponsible landlords, and they won’t report them because basements are so cheap.

Affordable Housing

How cheap, you ask? Personally, I know some studio listings in Elmhurst, Queens (less than 30 minutes from 42nd Street on the E or F trains) that go for $200/$300 month, mini-kitchen and bathroom included. Granted, they’re pretty disgusting, and may or may not have roaches. But even fairly decent listings, like an Astoria 1-bedroom with living room and kitchen (less than 10 minutes from 42nd Street), only go for $900/month. For comparison, “surface” 1-bedrooms in Astoria are being snagged for $1300 on the cheap end. And these don’t include a living room or kitchen.

The appeal of cheaper living has attracted thousands of young, 22-30 year old renters to pursue basement spaces, and conservative estimates from Chhaya Community Development Corp indicate that there are over 100,000 occupied ADUs in NYC. Plus hundreds of thousands more that aren’t occupied.

Good for the NYC Housing Market

It should come as no surprise that the city is now trying to bring some much-needed relief and robustness to the NYC housing market by pushing to legalize ADUs. Manhattan Borough President Scott Stringer wants to follow the example set in a number of other states and legalize ADUs because doing so “would add tens of thousands of affordable units to the city’s legal housing stock and would spur economic growth by accommodating more young workers.”

What would this mean? That the 100,000+ occupied ADUs would be brought out of the shadows, and the remainder could be rented out as well. More importantly, landlords would be held accountable for the condition of their ADUs, to ensure they comply with standard safety requirements.  Living conditions would then improve across the boards for ADU residents around NYC.

If ADUs were ever legalized a surge in prices would probably follow. But it’s safe to say that basement listings wouldn’t surpass comparable ground units in dollar terms, and they would certainly be a welcome addition to the NYC housing market.