There are two possible paths as of October 2026. A basement or cellar can be converted to a legal ADU under DOB's new ADU rules if it meets them and sits outside flood risk areas. Separately, a pilot under Local Law 126 offers some existing, unpermitted units a 10-year temporary residence authorization while they are brought up to code.
Path one: build it as a new legal ADU
Since September 30, 2025, owners can file to create a basement or cellar ADU under DOB's Appendix U requirements. That means at least 7-foot ceilings in habitable rooms, egress and, for cellars, two independent exits, emergency escape openings and sprinklers. It also means the lot must be outside DEP's flood risk areas. See basement and cellar ADUs.
Path two: the Local Law 126 pilot
For apartments that already exist without permits, the city runs a separate pilot. According to DOB and HPD, as of October 2026:
- The basement must have been illegally occupied as of April 20, 2024.
- Qualifying owners can apply for a 10-year temporary residence authorization.
- Applications to DOB's Temporary Residence Program are due by April 20, 2029.
- Tenants in place on April 20, 2024 have a right of first return after renovations.
- Pilot units are reviewed by DOB's Central Development Unit, not through professional certification.
The pilot does not cover every part of the city, and some of its rules were still being finalized. We check whether your property falls within it.
Is there money to help?
HPD's Plus One ADU program includes basement legalization among its uses, with combined city and state financing of up to $395,000 per property for eligible owner-occupants, according to its FAQ.
Sources, as of October 2026:
- NYC DOB announcement, September 30, 2025; DOB ADU FAQs; rule 1 RCNY 105-08.
- NYC HPD, Plus One ADU FAQ.