How do I legalize my basement apartment in NYC?

Under the City of Yes program, you can apply for an Authorization for Temporary Residence (ATR) through the DOB NOW Build portal. If your property is in one of the 15 eligible community districts and the unit existed before April 20, 2024, you can keep your tenant in place while gradually bringing the unit up to code over a 10-year period. Applications are open until April 20, 2029.

Which NYC neighborhoods are eligible for the basement legalization pilot program?

The pilot program covers 15 community districts across four boroughs. In the Bronx: districts 9, 10, 11, and 12. In Brooklyn: districts 4, 10, 11, and 17 (Bushwick, Bay Ridge, Bensonhurst, East Flatbush). In Manhattan: districts 3, 4, 9, 10, 11, and 12. In Queens: district 2 (Long Island City, Sunnyside, Woodside). Staten Island is not included.

What is the Plus One ADU grant for basement apartments?

The Plus One ADU program is a New York State grant of up to $125,000 for eligible homeowners who want to create or legalize an accessory dwelling unit including basement apartments. The grant covers design, permitting, architectural fees, surveys, and construction costs. It is available to low and moderate-income homeowner occupants of one-family homes.

What are the requirements to legalize a basement apartment in NYC?

To enter the pilot program, the unit must have existed before April 20, 2024, the property must be in an eligible community district, and it cannot be in a flood zone. Initial safety requirements include working smoke alarms, carbon monoxide detectors, central heating, adequate egress, and proper separation from boiler equipment. Within two years you must install a sprinkler system.

Can I build a legal basement apartment anywhere in NYC?

Yes. While the pilot program for existing units is limited to 15 community districts, Local Law 127 applies citywide. Any homeowner with a one or two-family home can build a new legal basement apartment, attic apartment, or backyard cottage as long as it meets building code requirements from the start through the normal DOB permitting process.

How to Legalize Your Basement Apartment in NYC | Free Guide

How to Legalize Your Basement Apartment in NYC: Complete Guide

Everything NYC homeowners need to know about legalizing basement apartments under the City of Yes program — eligible districts, application steps, milestones, timelines, and the $125,000 Plus One ADU grant.

For the first time, New York City has created a real path to legalize basement apartments in one and two-family homes. The City of Yes for Housing Opportunity initiative established two new laws that give homeowners a framework to bring existing units into compliance — and there is grant money available to help cover the costs.

The Two Laws That Changed Everything

Local Law 127: Permanent Building Code Standards

This law establishes the building code requirements for what a legal basement or cellar apartment needs. Requirements include ceiling height, natural light, ventilation, fire safety systems, and egress. Any new basement apartment must meet these standards from the start.

Local Law 126: The Pilot Program for Existing Units

This is the law that matters most for homeowners who already have a basement apartment. The pilot program lets you apply to keep your tenant in place while you gradually bring the unit up to code over a ten-year period. You do not have to shut everything down and do a full renovation all at once — you can do it in stages.

Eligibility Requirements

Unit must have existed before April 20, 2024 — This is for existing apartments, not new conversions
Property must be in an eligible community district — The pilot covers 15 districts across 4 boroughs (see list below)
Property cannot be in a flood zone — FEMA-designated flood areas are not eligible

Eligible Community Districts

Bronx

Districts 9, 10, 11, and 12

Brooklyn

Districts 4, 10, 11, and 17 — covering neighborhoods including Bushwick, Bay Ridge, Bensonhurst, and East Flatbush

Manhattan

Districts 3, 4, 9, 10, 11, and 12

Queens

District 2 — covering Long Island City, Sunnyside, and Woodside

Note: Staten Island is not included in the current pilot program.

How to Apply: The ATR Process

You apply for an Authorization for Temporary Residence (ATR) through the Department of Buildings website using the DOB NOW Build portal.

Applications opened: September 30, 2025
Application deadline: April 20, 2029

Initial Safety Requirements

To get accepted into the program, your unit must have these minimum safety features in place:

Working smoke alarms
Carbon monoxide detectors
Central heating system
Adequate egress for emergency exit
Proper separation between apartment and boiler equipment

The 10-Year Compliance Timeline

Once accepted, you have 10 years to bring the unit into full compliance with Local Law 127. Key milestones include:

Within 2 years: Install an automatic sprinkler system (this is the biggest early milestone)
Ongoing milestones: Electrical upgrades, plumbing improvements, structural modifications
Documentation: Update your ATR after meeting each milestone

While you are working toward compliance, your tenant can stay in the unit legally and you will not face penalties for the unit being occupied.

The Plus One ADU Grant: Up to $125,000

New York State’s Plus One ADU program offers grants of up to $125,000 to eligible homeowners who want to create or legalize an accessory dwelling unit, including basement apartments.

What the Grant Covers

Design and architectural fees
Permitting costs
Surveys
Construction costs

Eligibility

Low to moderate-income homeowner occupant of a one-family home
Applied through local program administrators (varies by location)

$125,000 could cover most or all of the renovation costs for many homeowners. If you think you might qualify, look into this before you start any work.

Citywide ADU Options Under Local Law 127

Even if your property is not in one of the 15 pilot districts, Local Law 127 applies citywide. Any homeowner with a one or two-family home can build a new legal:

Basement apartment in a one or two-family home
Attic apartment in a one-family home
Backyard cottage (ADU) on the same lot as a one or two-family home

These must meet building code requirements from the start through the normal DOB permitting process.

Important Considerations

Budget realistically: Even with grant money, you may need additional funds, especially for the sprinkler system which can cost several thousand dollars
Meet your milestones: Failing to meet milestones can have consequences — make sure you can follow through before applying
Consult an attorney: The rules are new and there are nuances around tenant rights, building code compliance, and liability
Buying a property with a basement unit: An illegal unit can create complications during sale, but it can also be an opportunity if the property is in an eligible district

Talk to Joseph Ranola

Whether you own a home with a basement apartment or you are thinking about buying one, I can help you understand how these new laws affect your property and your options.

Book a Free Consultation and we will go through your specific situation together.

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Joseph Ranola | Bridge and Boro Team at Real Broker