It comes as no surprise that New York City is in the middle of a housing crisis. Estimates suggest the city is short hundreds of thousands of housing units. While no single solution can fix this shortage, the City of Yes zoning initiative marks a step in the right direction.

What is City of Yes?

City of Yes is a set of zoning changes passed in 2024 that modernize outdated rules and aim to expand housing opportunities, support clean energy, and encourage economic growth. One of the most significant updates for homeowners is the legalization of ADUs (Accessory Dwelling Units).

ADUs are not new. They have been common in places like California and Oregon for years. Now, NYC is catching up, and the opportunity to add them by right is a major shift.

If you own a one- or two-family house in New York City, here’s what you need to know.

What is an ADU?

An ADU is a self-contained apartment on the same property as your main home, with its own kitchen and bathroom. The city officially refers to them as “Ancillary Dwelling Units.”

Think of it as a second small home on your property. Examples include:

• A legal basement apartment

• An attic or garage conversion

• A detached cottage in the backyard

Your home remains classified as a one- or two-family residence, while the ADU provides one additional unit for flexibility.

Why This Matters for Homeowners

This is not just a technical zoning update. It is a real opportunity for homeowners to rethink what their property can offer.

1. Added Property Value

An ADU maximizes the real estate potential of land you already own. As of now, the median home price in NYC is about $776 per square foot, so every new square foot matters.

2. Flexibility for Families

ADUs allow for multigenerational living. They can house aging parents, adult children moving back home, or visiting relatives. Some homeowners also use them as studios, home offices, or guest suites.

3. Income Potential

A permitted ADU provides an option for legal rental income. With rising housing costs, an additional unit can help cover mortgage payments, property taxes, or simply offer long-term financial flexibility.

4. Strengthening Communities

By introducing more small-scale housing across neighborhoods, ADUs add density in a gradual way while preserving the character of residential blocks.

Next Steps if You’re Considering an ADU

1. Feasibility

Not every property will qualify for an ADU. Several factors influence eligibility:

• Zoning District: Each zoning district in NYC has its own rules about what is permitted. Some districts are more flexible than others.

• Lot Size and Shape: The size and depth of your lot will determine how much space is available for an ADU and where it can be located.

• Flood Zones: Properties in flood-prone areas may face stricter requirements or design constraints, especially for basements or ground-level units.

• Historic Districts and Landmarks: If your home is landmarked or in a historic district, exterior changes and new structures may require approval from the Landmarks Preservation Commission.

• Rear Yard Access: A detached ADU in the backyard generally requires a clear and legal path of access from the street to the unit.

• Building Condition: The existing structure must be able to accommodate an additional unit safely, which may involve upgrades to utilities and structural systems.

We recommend starting with the eligibility tool on our website for an initial assessment. This will give you a sense of whether your property has potential before committing resources.

2. Design

Once feasibility is established, the design phase is critical. Considerations include:

• Maximizing natural light through careful orientation and window placement.

• Preserving privacy for both the main home and the ADU.

• Ensuring the size and shape of the unit complement the existing house.

• Integrating the backyard into the overall design so that the outdoor space remains functional and inviting.

  
  

3. Permitting

Permitting in NYC requires coordination across multiple disciplines. At a minimum, an architect, structural engineer, mechanical engineer, electrical engineer, plumbing engineer, and fire protection consultant are involved. Compliance with the NYC Energy Code is also mandatory. At Haven, we manage these disciplines so you do not have to take on the role of project manager.

4. Construction

Building an ADU is a major investment. Success depends on working with a builder who is experienced, reliable, and transparent with scheduling and costs. It is also important to keep your architect engaged during construction to ensure that the project matches the approved design and to help resolve any issues quickly.

Final Thoughts

ADUs will not solve NYC’s housing crisis alone, but for homeowners, they are a meaningful new option. They can unlock property value, provide housing flexibility for families, and even create a source of steady rental income.

If you are curious about whether an ADU could work for your property, start with our eligibility tool and reach out. We would be glad to walk you through the process.