NYC Pilot Program Pays Homeowners to Build Granny Flats

In a bit of a role reversal, New York City is taking a somewhat laid-back approach to its endorsement of accessory dwelling units as a useful option in the housing expansion tool kit.

The do-it-yourself additions to single-family lots, more commonly known as Granny Flats, have the full backing of the state in California, which is trying to encourage just about everyone in the Golden State to make room for Grandma in the back yard.

New York last week dipped its toe in the water on Granny Flats with a pilot program that offers a generous incentive of up to $400K to New York City residents living in a single-family home to offset the cost of adding a unit over the garage and in an expanded woodshed.

More like a toenail: according to the program announced last week, officials are prepared to dole out these lucrative incentives to a grand total of 15 homeowners.

The recipients of these grants will be restricted by income, with the ceiling for a family of four set at $232,980 and priority given to lower incomes. Rents in the new apartments will be capped at about $2,600 for a one-bedroom apartment. Applicants for grants must apply on the city’s website.

We’re guessing that NYC originally planned a more expansive version of its Granny Flats initiative before Mayor Eric Adams imposed across-the-board budget cuts he says are necessary to offset the estimated $12B the migrant crisis is costing NYC during the next three years.

Despite limiting the grants to 15 homeowners, the mayor touted the program in a statement as a “tangible win for families” that gives working-class New Yorkers the “tools they need to thrive in this city.”

The deputy mayor for housing suggested that the program will serve as a demonstration of how NYC is making it easier for homeowners to earn money from their property and for parents to reunite with adult children.

“We hope that it’s just the type of program that builds momentum, shows what’s possible and that demonstrates to New Yorkers how we can build housing in every neighborhood in the city,” Maria Torres-Springer, the deputy mayor for housing, economic development and workforce, told the New York Times.

The development of Granny Flats in NYC has been complicated by the fact that thousands of existing basement units in the city have been deemed unsafe by the city, which has had difficulty starting a pilot program to convert basements into safe and legal apartments.

The pilot program, which began under Mayor Bill de Blasio, ultimately failed because of the skyrocketing cost of renovations. Meanwhile, statewide efforts to adjust regulations to encourage the development of safer basement units were scuttled when Gov. Hochul’s housing agenda was pulled.