Marlene Hernandez moved from her two-bedroom apartment in Bushwick to an illegal basement apartment in East New York two years ago out of necessity.
“I simply couldn’t afford Bushwick anymore, I had to go somewhere else,” the 29-year-old single mother of one told the Daily News. “Even if you live with a roommate, you’re paying $1,000, $1,200, to stay in a room. So I figured, why not live in a basement where I can have my own privacy?”
Some 114,000 New Yorkers live in illegal basement apartments, according to the housing advocacy groups Chhaya Community Development Corporation and the Pratt Center for Community Development.
If “rewards” for living in such apartments are below-market rent and privacy, the FDNY says risks can include lack of proper ventilation, sprinkler systems and a required two emergency exits. The Department of Housing Preservation and Development (HPD) adds the risk of carbon monoxide poisoning.
Basement and cellar apartments must meet minimum requirements for light, air, sanitation and exits and be approved by the Department of Buildings.
A bill signed by Mayor Bill de Blasio on March 5 aims to turn illegal basement and cellar apartments into safe, legal, affordable housing, starting with a three-year pilot in East New York and Cypress Hills, Brooklyn.
But the new law has Hernandez worried. She’s paying $1,200 a month for her off-the-books place and argues that New Yorkers in her position may have to keep finding illegal apartments to keep their rent down, or face higher rents for legal apartments.
“My landlord isn’t going to lower my rent,” she said. “What incentive does he have to legalize my apartment?” she said.
The pilot program will provide $12 million in low-interest loans and grants to eligible low- to middle-income homeowners, living in one- to three-family homes, to convert their basements into legal apartments. If successful, the city would look at expanding the program to other neighborhoods.
A report from the Citizens Housing and Planning Council (CHPC) in 2017 said such a program could add up to 38,000 housing units.
All basement apartments legalized with funds from the grants and loans will have to conform to HPD’s affordable housing rules, which cap rents at 30% of a tenant’s income. Landlords who decide to create legal basement apartments without the city’s help will not have to abide by the income cap.
“If they legalize basement homes, landlords can just take advantage,” Hernandez said. “They know that there are people who are able and willing to pay regular apartment prices for these units.”
Jessica Katz, executive director of CHPC, acknowledged that the pilot’s pathway to legalization opens the door for landlords to raise rents. But, Katz said, the benefits of legalization outweigh the possibility of higher rents.
“There is a risk that the landlords will raise the rent,” Katz said. “We’re trying to find the right balance between bringing up the quality of those apartments and protecting the tenants, but also not scaring off tenants who have in certain ways benefited from the legal gray area that they’re living in.”
The Pratt Center will help oversee the pilot. Pratt’s director of policy Elena Conte sought to reassure tenants like Hernandez, noting that administrators will be looking for ways to track basement apartment rents before and after they are legalized to prevent a massive spike.
“We’re looking at what we can set up, what seems feasible for our community-based partners, and drawing lessons about what is the best way to maintain fair rents as we legalize these homes,” Conte said.
Councilman Brad Lander, who sponsored the bill, told the Daily News that HPD is collecting and compiling feedback from homeowners who declined to take part in the pilot and those who signed onto it.
“The survey will be for a range of folks; homeowners who participate with some attention to homeowners who chose not to participate.” Lander said. “We want to understand what’s working about the program, how to make it better, what are the barriers to participation.”
Asked about basement tenants like Hernandez paying above HPD’s income cap, Lander said increasing the value of a home can be an incentive for landlords like hers to convert basement apartments under city oversight.
“(Landlords) have the opportunity to get a substantial, low-market, affordable loan or grant from HPD in order to make significant upgrades to the unit,” Lander said, noting that this increases the market value of a home. “This is a significant investment in the building.”
But landlords, he pointed out, must be willing to keep these apartments affordable and in line with city regulations.
“Will there be landlords who choose not to participate because they are already getting a rent and what do they need the hassle for? Sure. But there are good incentives,” Lander said, adding that the survey will give the city guidance on how to make the program more attractive.
