Adams Administration Publishes New Proposed Rules for Legalizing Basement and Cellar Apartments

For Immediate Release: November 10, 2025
CONTACT: [email protected], (212) 393-2126

ADAMS ADMINISTRATION PUBLISHES NEW PROPOSED RULES FOR LEGALIZING BASEMENT AND CELLAR APARTMENTS

New Pilot Program Focused on Bringing Illegal Apartments up to Code for the Safety and Comfort of New Yorkers Currently Living in These Unpermitted Spaces

New York, NY - Mayor Eric Adams today announced that the Department of Buildings (DOB) and the Department of Housing Preservation and Development (HPD) have published proposed rules to create a new basement and cellar apartment legalization pilot program for qualifying illegally occupied apartments in one- and two-family homes. Thousands of New Yorkers currently live in unsafe, illegally converted basement and cellar spaces, forced into these circumstances due to a severe lack of better housing options underscored by a 1.4 percent vacancy rate. This legalization pilot program, first included in the Mayor Adam's City of Yes for Housing Opportunity plan and mandated by Local Law 126 of 2024, will protect these tenants while the property owners work to fully legalize the apartments. Under the pilot program, tenants will be allowed to continue living in eligible basement or cellar apartments equipped with appropriate safety equipment in certain community districts set out in Local Law 126 while the units are brought into compliance with applicable code and safety standards to address risks such as fire and flooding. The program will allow small homeowners to turn these illegal apartments into legal Ancillary Dwelling Units (ADU) - adding value to their property, preventing displacement of the current tenants, and creating safer basement and cellar apartments for New Yorkers.

"For too long, too many New Yorkers have been forced into dangerous basement and cellar set ups just to find a place to live. This pilot program will help us change that - turning illegal, unsafe apartments into legal, safe ones," said New York City Mayor Eric Adams. "Whether it's passing our landmark 'City of Yes' plan, securing a historic deal in Albany, or shattering affordable housing records year after year, we are proud to be the most pro-housing administration in city history."

"New Yorkers deserve to live in safe, stable homes. I am proud that our administration is releasing the proposed rules for this ambitious plan to make illegal basement and cellar apartments legal and safe," said Deputy Mayor of Housing, Economic Development and Workforce Adolfo Carrión Jr. "For decades, failed government policy has driven our most vulnerable citizens into illegal and unsafe housing, but now we are taking steps to change that. Not only are we addressing the root causes of the housing crisis through initiatives like City of Yes for Housing Opportunity, but we are stepping in to the help those directly impacted by the crisis. Drafting these rules took an enormous amount of work from more than a dozen agencies and offices, especially DOB, HPD, and FDNY, and for that I am immensely grateful. Now we look forward to hearing the public's feedback and together working to improve the rules."

"These proposed rules offer an important step forward to creating safer conditions that help owners and renters, consider the concerns of existing tenants in these spaces, and unlock the potential of building more housing at a moment where every unit counts," said Acting HPD Commissioner Ahmed Tigani. "At their core, these rules are about protecting families, strengthening neighborhoods, and expanding opportunity. We look forward to working with our partners and New Yorkers across the city to make this vision a reality."

"Promoting public safety for our fellow New Yorkers will always be a top priority for this Department," said Buildings Commissioner Jimmy Oddo. "Too many of our fellow New Yorkers continue to live in unsafe illegal conversion that leave them and their families unprotected. With these carefully considered proposed rules, apartment units that are created through this legalization pilot program will be equipped with enhanced safety features like sprinklers and flood water sensors, there to protect the tenants, their neighbors, and first responders."

The proposed rules provide clear standards for participation, compliance, and enforcement for this new Authorization for Temporary Residence (ATR) pilot program, authorized by Local Law 126 of 2024. The public hearing for the proposed DOB rule will be held by at 11am on December 11th, for stakeholders and members of the public. The public hearing for the proposed HPD rule will be held by at 10am on December 12th. After these hearings, DOB and HPD will review and consider all public comments received during the hearings and also sent to the agencies in writing, prior to the publication of the final rules. Once the final rules are in effect, DOB will be able to start accepting applications for the pilot program.

To be eligible for the ATR pilot program, the basement or cellar apartment must have existed before April 20, 2024, be located in certain community districts set out in Local Law 126, and be equipped with basic safety features to protect the people living in these apartments. These safety features include, but are not limited to, smoke alarms, gas alarms, central heating, access to appropriate egress, and adequate wall separation between the apartment and any boiler equipment. Properties in flood-prone areas of the city are not eligible to apply for inclusion in the ATR pilot program. The owner must apply to participate in the ATR pilot program before April 20, 2029, by submitting an application to DOB's website.

Property owners who are accepted into the ATR pilot program will be able to legalize existing illegal apartment units without penalty, provided that they follow a series of steps to bring the units into full compliance with the city's Codes and zoning regulations over a ten-year period of time. The owners will be required to meet specific milestone deadlines throughout the legalization process, while the tenants are still living in the apartment, in order to stay in the ATR program. This legalization work includes implementing additional safety features in the apartments, including the installation of sprinklers and flood water sensors.

Local Law 126 of 2024 provides that a tenant who occupied a basement or cellar apartment under the ATR program, on April 20, 2024, and who must vacate the basement or cellar apartment in order for the required alteration work to be performed safely, has the right of first return to this basement or cellar residence after the alteration work is completed. Pursuant to rulemaking authority conferred in the Local Law, HPD proposed rules requiring the owner to provide tenants with key information including the expected date for the start of the work, a general description of the scope of the alterations and the anticipated completion date when the tenant may return. Under the proposed rules, a tenant who wishes to preserve their right to return must provide the owner with contact information where they can receive notices during the period of alteration work.

Additionally, no later than 60 days before the work is expected to be completed, the owner must notify the tenant of their ability to return. This notice must include a written lease with the initial monthly rent. To exercise their right to return to the basement or cellar apartment, the tenant must provide written notice of their intent to return; the return of a signed lease will be deemed sufficient to demonstrate that intent.

After the construction work is completed to legalize a basement or cellar apartment under the ATR pilot program, and all necessary city inspections are conducted and passed, the property owner must submit an alteration application to obtain an amended Certificate of Occupancy for the basement or cellar residence. Once the amended Certificate of Occupancy is issued, the property will be removed from the ATR program, and a new, safe, legal apartment unit will be added to the city's housing stock. The ATR is another pillar in the City's multifaceted plan to increase the supply of safe, affordable housing options in neighborhoods across the five boroughs, while addressing the long-standing hazardous safety issues commonly found in existing illegal basement and cellar apartments.

The proposed rules announced today specifically cover legalization of existing unpermitted basement and cellar apartments in one and two-family homes. In September 2025, the administration officially opened the application portal for property owners looking to construct new ADUs in locations where no apartments currently exist. DOB and HPD, in conjunction with our agency partners will consider criteria for additional agency rules to extend this legalization pilot program to include illegally converted apartments in multiple dwelling buildings. Since the passage of City of Yes for Housing Opportunity, DOB and the HPD have worked closely with other city agencies on multiple ADU rules, with a goal of prioritizing the safety of occupants, other residents on the property, and members of the community.