Rental conversions in New York City

In December 2024, alongside the City of Yes for Housing Opportunity zoning change, New York City enacted Local Laws 126 and 127, letting the owner of a one- or two-family home add an ancillary dwelling unit in an attic, basement or cellar, in a free-standing building or in an attached addition.⁸ Only one ADU is allowed per one- or two-family residence, with a maximum of 800 square feet of zoning floor area, and an ADU needs its own separate entrance.⁸

Backyard ADUs are not permitted in historic districts, in R1-2A, R2A and R3A districts outside the Greater Transit Zone, or in parts of the Special Bay Ridge District, but converting a garage into an ADU is not treated as a backyard ADU.⁸ Basement and cellar ADUs are not permitted in the city's high-risk flood areas: FEMA's Special Flood Hazard Area, the Coastal Flood Risk Area and DEP's 10-Year Rainfall Flood Risk Area.⁸

In March 2026 the city launched ADU for You, an online toolkit with an ADU guidebook, a library of designs already reviewed and approved by DOB, and tools for checking a site and estimating cost.¹³ The city's Plus One ADU program, funded with the state's Homes and Community Renewal and run with Restored Homes HDFC, offers qualified homeowners up to $395,000 in financial support and technical assistance to add an ADU.¹³

New York's Multiple Dwelling Law defines a multiple dwelling as a building rented or occupied as the home of three or more families living independently of each other.¹⁴ A two-family house that adds an attic, basement, cellar or attached ADU is treated as a three-family building under the state Multiple Dwelling Law, unless the new unit is separated by a fire wall.⁸ HPD notes that the Multiple Dwelling Law takes over when a basement or cellar apartment turns a two-unit home into a three-unit home, or a three-unit home into a four-unit one.¹⁵

Sprinklers are required in most ADUs; the exception is an above-grade ADU within a one-family home, and attic ADUs must always be sprinklered.⁵ Every habitable room in an ADU must meet the emergency escape and rescue opening requirements of the city's Building and Fire Codes.⁵ Ask the architect to show on the drawings which code path the unit follows before you price it.

The Local Law 126 pilot for legalizing existing basement and cellar apartments covers only Bronx Community Districts 9 through 12, Brooklyn Community Districts 4, 10, 11 and 17, Manhattan Community Districts 2, 3 and 9 through 12, and Queens Community District 2.⁸ To enter the legalization pilot, a basement or cellar unit must have existed before April 20, 2024 and the owner must apply before April 20, 2029; enrolled units then follow a ten-year compliance schedule, and DOB is not taking applications until its program rules are issued.⁸

HPD's Basement Apartment Conversion Pilot Program offered low- or no-interest loans of up to $120,000 to help homeowners in East New York and Cypress Hills, Brooklyn, turn a basement or cellar into a legal apartment, and it is no longer considering applications.¹⁵ An owner outside both pilots still has the regular ADU route, with plans, inspections and a new CO.

HPD requires annual registration from owners of buildings with three or more apartments, and of one- or two-family homes where neither the owner nor the owner's immediate family lives, with a September 1 deadline each year.¹²

Under Local Law 1, owners must presume paint is lead-based unless testing shows otherwise and HPD grants an exemption, and when an apartment becomes vacant they must remove lead paint from its doors and windows among other turnover repairs.¹⁰ By August 2025, owners covered by Local Law 1 were required to have all painted surfaces in their apartments and common areas tested for lead one time.¹⁰ Before a renter signs a lease for most pre-1978 housing, federal law requires the landlord to disclose known lead-based paint and hazards, share available records, hand over EPA's Protect Your Family From Lead pamphlet and include a Lead Warning Statement.¹⁶

EPA's lead renovation rule generally doesn't cover homeowners working on their own pre-1978 homes, but it does apply if you rent out all or part of your home.¹⁷ To use a basement or cellar apartment as an ADU, qualified professionals must test its radon and soil vapor levels and certify to the Department of Buildings that the results are below the levels the NYC Health Department sets.¹⁸

More than one in four adults 65 and older fall each year.¹⁹ Many owners build the new unit for an aging parent rather than a stranger. A level route from the sidewalk, a shower without a curb and lever door handles are inexpensive in the original plans and expensive to add once the unit is built. NAHB's Certified Aging-in-Place Specialist (CAPS) credential trains remodelers in home modifications for aging in place.²⁰

The number on this page connects you, on a recorded line, to one independent company that handles rental conversions in the New York City area. The design, schedule and price are agreed between you and that company.

That company pays us for each call, so it costs you nothing to connect, and nobody from our side calls or texts you later. How we make money

Look the company up with DCWP before money changes hands. New York City requires a Department of Consumer and Worker Protection Home Improvement Contractor license for residential construction, repair or remodeling work that costs more than $200; new construction, plumbing and purely electrical work are not covered.²¹ DCWP's online Search Business tool shows whether a business or individual holds a DCWP license, without logging in, and can be searched by name or DCWP license number.²² Check a New York license

Every New York home improvement contract, and every amendment, must be in writing and signed by all parties, and must give the contractor's name, address, phone number and license number if one applies, the approximate start and substantial completion dates, and a description of the work and materials, including make and model, with the agreed price.²³ Make DOB's approval of the plans a condition in the contract, so construction doesn't start before the city has signed off.