Two years ago, as Mayor Bill de Blasio pushed expansive plans to create more affordable homes in New York City, his administration launched an initiative to tackle one of the city’s thorniest housing problems: transforming illegal basement apartments into safe, livable spaces.
To many the move was seen as long overdue and in some cases a matter of life and death. There are tens of thousands of such units, the only places where many low-income New Yorkers and immigrants can afford to live, even if cramped, unregulated conditions put them at risk of floods, fires and many other threats.
But after the city promised a program to transform the shadowy world of basement apartments, its initiative has largely foundered. Mr. de Blasio slashed the budget during the pandemic, and only eight homes are participating.
The fate of the basement program has now come under heightened scrutiny after the remnants of Hurricane Ida inundated the city this month, killing 11 people in basement homes. Nearly all those who died in the city, including a toddler and his parents, lost their lives in illegal homes in basements and cellars, often as crushing floodwaters left them with no means to escape. Several were immigrants, neighbors said.
The city has said that it slashed the program last spring as one of several cost-saving measures taken during the pandemic to deal with a staggering budget crisis. Officials have not said whether they intend to restore the funding, or expand the program, as Mr. de Blasio has said he wanted to do.
After Ida, the mayor has acknowledged the problem of basement apartments and says the city plans to better alert or evacuate residents living in them during dangerous storms. But he also said the city does not have a ready answer to the broader question of how to make the illicit underground dwellings, which play a large role in addressing the city’s shortage of affordable housing, safe places to live.
“I could tell you that we’ve got some miraculous plan to solve the illegal basement problem overnight,” he said. “We don’t.’’
The cost, he said, could be several billion dollars. Based on the findings from the program, each conversion could cost at least $250,000 to $310,000, based on existing regulations.
Some housing experts have questioned the administration’s commitment to the issue. The pilot program was a relatively modest investment, and the city has received billions of dollars in supplemental federal pandemic aid.
“The mayor had said that helping to advance safety and habitability in basement apartments was a top priority for him,” said Jessica Katz, executive director of the Citizens Housing and Planning Council, a nonprofit housing group that is evaluating the city’s basement apartment program. “The basement pilot was a small but serious step in the right direction — which was promptly defunded.”
Ms. Katz, who worked for several years in the city’s housing department until 2017, said “there’s been very little progress from this administration’’ on making basements “better to live in.’’
The city’s stumbles on addressing illegal basement and cellar homes — many of both lack basic requirements like more than one exit — are just one piece of New York’s housing affordability crisis. (Both basements and cellars are at least partially underground, but cellars, in which at least half of the space is below curb level, are always illegal to rent out, while some basements can be legal.)
The coronavirus pandemic, which left hundreds of thousands of people out of work, has made the situation worse, while climate change has heightened the threat of more frequent and fierce storms.
At its core, the challenge is a matter of supply and demand. The number of low-income New Yorkers far exceeds the number of affordable homes, prompting many to seek refuge in dangerous but relatively inexpensive basement homes.
The prevalence of illegal units extends beyond New York. In Utah this year, the State Legislature passed a bill making it easier for people to rent out their basements. In Boston, a pilot program to help homeowners rent their basements has been expanded citywide.
But in few places is the problem as pressing as in New York, where the number of illicit units probably far outstrips those in any other American city. There is no official count, but Mr. de Blasio estimated that there were at least 50,000 illegal units housing more than 100,000 people.
Andrew Rudansky, a spokesman for the city’s Buildings Department, said five of the six homes where people died during the flooding were illegal conversions of cellars or basements into apartments, while a sixth home was a legal basement unit.
In at least four of the five illegal units, there was only one way in and out, according to the Buildings Department, which is investigating the six deaths along with the Police Department.
The pilot program in East New York, Brooklyn, in 2019 was the first meaningful attempt to try to convert such units into legal homes, according to city officials.
When the de Blasio administration rezoned East New York in 2016, many residents feared that new development would lead to significant displacement. Renting out basements could provide newcomers with an affordable home while also bringing in additional income for existing residents trying to pay their mortgage.
The pilot started in March 2019, with about $12 million from the city and a goal to help 40 households in East New York convert their basements to apartments and see if the initiative could be applied across the city.
The city provided about $120,000 per home in loans that could eventually be forgiven to help retrofit the basements and make them legal homes by adding more entrances and exits or sprinkler systems among other items, said Michelle Neugebauer, the executive director of Cypress Hills Local Development Corporation, a local group that is running the pilot.
Participants had to have low or moderate incomes and live in the home where the basement was to be converted into an apartment.
There were high expectations, with Mr. Blasio declaring in February 2020 that the pilot could be expanded citywide. The program, Ms. Neugebauer said, was ready to move forward on nine properties and was assessing dozens of others.
Then the pandemic hit. The city cut $7.5 million of the program’s budget, Ms. Neugebauer said, and program was limited to working on just the nine initial homes.
“It’s really devastating,” Ms. Neugebauer said. “We’re just kind of hanging in there by the skin of our teeth.”
The mayor’s office did not respond to questions about using federal pandemic funds or other financial sources to help salvage the program.
One of the nine homeowners dropped out for health reasons, but the conversion process is underway at eight other homes. Once city permits and loans are secured, construction could start early next year and take about seven months, according to the Cypress Hills Local Development Corporation
Despite the setbacks, the pilot has been an unexpected boon for one homeowner, Crystal Matthews.
Ms. Matthews, 46, a nurse, bought her house in East New York, a modest three-story building near her sister, more than three years ago because she wanted to have a home available for her aging parents who live a few miles away.
She quickly looked into what it would take to legally rent out her basement, which has both an entrance and an exit to the backyard, to help pay her $3,500 monthly mortgage and other costs. She knew many of her neighbors rented illegally, but did not want to take the risk of being fined by the city.
But even the simple task of installing a sprinkler system as required by housing code could cost up to $40,000, so she dropped the idea. Her basement remained a vacant — and, in her mind, wasted — space. When she heard about the pilot, she jumped at the opportunity.
“With gentrification being what it is, there are people who need somewhere safe to stay,” she said.
Despite the program’s setbacks, Ms. Neugebauer said there have been some valuable lessons.
The high costs of most basement conversions has shed light on the type of funding that would be needed across the city.
Ms. Katz said the pilot could also point to regulations that could be changed to ease conversions. Under current rules, for example, adding basement units requires the addition of new parking spaces, which is a tall order in many dense neighborhoods.
“We have this issue, where you can’t make an apartment a little bit safer, you have to make it perfect, and so we do nothing at all,” Ms. Katz said. “That’s kind of putting our heads in the sand.”