• New York City recently made it legal to add a housing unit to certain one- and two-family homes.
• But both city and state regulations will drastically limit construction, experts say.
• A state law severely restricts the addition of ADUs to two-family buildings.

One of the solutions to New York City's housing shortage — adding extra units in attics, basements, and backyards — is already running into a slew of regulatory hurdles.

Under the city's zoning reforms, certain one- and two-family building owners will be allowed to add a so-called "accessory dwelling unit" to rent out, house a family member, or live in themselves. Homeowners could boost the value of their property and bring in extra income while creating more homes in a city facing a dire housing shortage. The change would also help bring many of the city's tens of thousands of existing basement units into compliance with health and safety codes.

But the city's new law restricts ADUs in several ways, including by banning ADUs on lots with attached rowhomes or townhouses and on lots more than half a mile from a mass transit station. The law also prohibits ground-floor and basement ADUs in areas prone to coastal flooding and inland flooding during heavy rain. A backyard ADU can cover no more than a third of the yard and can't be added in historic districts.

A state law that could block a lot of building

ADUs aren't just subject to city regulations. New York State's Multiple Dwelling Law (MDL) requires that buildings with three or more units have features one might associate with a large apartment building. For example, the law requires sprinklers in every unit and a certain ceiling height in basements, both of which can be prohibitively costly to add to an existing building.

"A lot of the sites that might be able to add an ADU would trigger the MDL and, therefore, wouldn't really be viable from a design perspective," said Marcel Negret, the director of land-use planning at the Regional Plan Association, a pro-housing nonprofit focused on the tri-state area.

Casey Berkovitz, the press secretary for the Department of City Planning, said the City is still examining how the MDL will apply to ADU construction, but agrees it would make it harder to add basement and attic ADUs in existing two-family homes.

There are exceptions. Building a new detached ADU wouldn't implicate the MDL because it's not part of an existing building, Berkovitz noted. And certain neighborhoods across the city are part of a new basement legalization effort that exempts them from certain MDL restrictions.

The state legislature could amend the MDL to reduce barriers for ADUs in New York City — something the City has asked it to do, said Eric Kober, a senior fellow at the conservative Manhattan Institute and former planner with the City. But he's not optimistic state lawmakers will get on board, adding, "There's no indication that it's on their radar or something that they're interested in doing."

Kober argued that the City's requirement that homeowners live on the lot they add an ADU is the most counter-productive of the regulations because it would prevent private developers from building ADUs.

The NYC government last fall said it expected that fewer than one in 200 eligible homeowners would choose to add an ADU to their property in a given year.

Negret estimated just a few thousand of the 82,000 additional homes the city is expected to add over the next 15 years under City of Yes will be ADUs. That's down from between 26,000 and 40,000 ADUs the city expected to add under the original version of its reforms, which were significantly reined in by the city council.

"My conclusion is, yes, ADUs are technically legal, but there's still a long, long way to go before they could be a much more significant share of a growing housing stock," Negret told Business Insider.

Legalization is just the first step

The city is still developing new rules that will impact ADU construction. This includes creating updated flood maps, which will likely further restrict where ADUs are allowed. It's unclear when the City will finalize the rulemaking process.

Eventually, the City says it will create a "one-stop shop" website to guide homeowners through the ADU construction process, including a set of pre-approved designs.

New York is following in the footsteps of cities such as Los Angeles and Seattle that view ADUs as low-hanging fruit in the quest for more affordable housing. After California loosened its restrictions on ADUs, the extra units made up nearly 20% of new homes built in 2023.

But progress tends to be slow. ADU legalization alone isn't usually enough to prompt lots of new construction. In some cities and towns, local land-use laws, permitting, and other regulations have stood in the way. Owner-occupancy requirements, off-street parking mandates, and discretionary permit reviews are among the most burdensome rules.

Just over a year ago, the NYC government rolled out a pilot grant program — called "Plus One ADU" — that awarded 15 homeowners with up to nearly $400,000 in funding per household to build an extra dwelling in their backyard, basement, or attic. The city has since expanded that program, but it applies only to lots that are already zoned to accommodate another unit.

"ADUs are a proven tool in cities across the country to support working families with extra space, additional income, and the opportunity to age in place," Dan Garodnick, the director of the New York City Department of City Planning, told Business Insider in a December statement.

• New York City is on the verge of legalizing accessory dwelling units in much of the city.
• One expert estimates the city's housing reform will create 20,000 such secondary units.
• The effort is part of the mayor's "City of Yes" housing plan, designed to boost the supply of homes.

In a city where reasonably priced apartments are difficult to find, a new type of affordable home might soon be legal.

As part of Mayor Eric Adams' "City of Yes" housing package — an effort to create more housing of all kinds by loosening regulations — New York City is on the verge of legalizing accessory dwelling units, or ADUs, in certain neighborhoods across the five boroughs. The policy reform is expected to result in thousands of backyard tiny homes and converted garages, basements, and attics.

Housing policy experts view the shift as a first step in expanding a neighborhood's capacity for additional residents and a way to create more affordable housing, particularly in neighborhoods dominated by single-family homes.

These homes are an increasingly popular way to boost density without building apartment towers, adding new housing options and income opportunities for homeowners who choose to rent out their extra units. More than a dozen states across the country have legalized ADUs in recent years, and New York State greenlit the secondary units in 2022, although New York City has restricted them.

"ADUs are a proven tool in cities across the country to support working families with extra space, additional income, and the opportunity to age in place," Dan Garodnick, director of the New York City Department of City Planning, told Business Insider in a statement.

In a key vote last week, two city council subcommittees agreed to a modified version of the mayor's plan that's expected to pave the way for about 20,000 ADUs over 15 years — about half as many as would have been built under the original plan, according to Marcel Negret, director of land use planning at the Regional Plan Association, a pro-housing nonprofit focused on the tri-state area. City of Yes is expected to pass the full council on December 5.

A nationwide push for ADUs

New York is following in the footsteps of cities like Los Angeles and Seattle that view ADUs — also known as "granny flats" — as low-hanging fruit in the quest for more affordable housing. ADU construction has surged in California, where accessory units made up nearly 20% of new homes built last year, and tend to offer more affordable rental units.

Nolan Gray, research director at California YIMBY, called ADU legalization "the beachhead for broader reform" of housing policy because backyard homes tend to be popular with homeowners who've otherwise resisted new housing in their neighborhoods.

"You start to de-normalize this idea that 75% to 90% of the typical American city is going to be off limits to any form of multifamily," he said.

Last year, New York City rolled out a pilot program that awarded 15 homeowners with up to nearly $400,000 in funding per household to build an extra dwelling in their backyard, basement, or attic. The city has since expanded that program, but it only applies to lots that are already zoned to accommodate another unit.

As part of the policy reforms, the City plans to adjust a slew of zoning laws and building codes to allow for ADUs. It will also create a "one stop shop" website to guide homeowners through the construction process, including a set of pre-approved designs, the city said.

"What we're doing, essentially, is just ensuring that every layer of government that could potentially have some sway over whether you can build an ADU is actually allowing you to do so," Casey Berkovitz, press secretary for the Department of City Planning, told Business Insider.

Some outer-borough councilmembers are skeptical

Outer-borough members who represent some of the least dense neighborhoods in the city — where ADUs are potentially most feasible — are among the most vocal opponents of City of Yes. Councilmember Vicky Paladino, a Republican who represents Northeast Queens, has called the mayor's plan "a calculated effort to destroy the character of our districts." Another Republican council member opposed to City of Yes derided ADUs as backyard "treehouses" that would depress home values.

While the city's original plan was estimated to create up to 40,000 ADUs over 15 years — as part of a total of more than 100,000 new units — the councilmembers imposed some additional restrictions that will shrink that number, including blocking them in neighborhoods that only allow rowhouses or single-family detached homes.

Despite the council's restrictions, there are many neighborhoods that aren't exclusively zoned for one- and two-family homes, but are still dominated by them. Such areas could be prime targets for backyard units, garage conversions, and other types of accessory units, Negret said.

"There are many other locations that still have single-family parcels that are not zoned under those categories where you could probably see ADUs popping up," Negret said.

Are you a New Yorker interested in building an ADU? Are you a homeowner with an ADU? Reach out to this reporter at [email protected].

• The last meatpackers in NYC's Meatpacking District are getting ready to close shop.
• Last month, NYC's mayor announced plans to develop the site near Greenwich Village and the High Line.
• Once a meat industry hub, the district now hosts luxury brands and nightlife venues.

The era of New York City's Meatpacking District as a neighborhood where people actually pack meat is coming to an end.

Late last month, New York City Mayor Eric Adams unveiled plans to redevelop the district's last operating meat market after its tenants accepted a deal from the city to move out — and in the market's place could come a 60-story tower.

Once brimming with hundreds of butchers, slaughterhouses, and packing plants, the Manhattan neighborhood now has only a handful of meatpackers left, and they're preparing to close up shop, the Associated Press reported this week in a retrospective looking back at the district.

Under the city's plan, the 66,000-square-foot Gansevoort Market would become Gansevoort Square, which, according to the mayor's office, would feature 600 mixed-income housing units, a new open pavilion, and a culture and arts hub.

And a New York state senator said there's a plan to build a 60-story skyscraper in the area — something a local historic preservation group said was out of scale for a neighborhood with mostly low-rise buildings.

The city hasn't confirmed the plans referenced by State Sen. Brad Hoylman-Sigal in a recent email newsletter he sent to constituents. The community group Village Preservation said Monday that a tower plan would likely be formally announced at an upcoming neighborhood Community Board meeting.

A building that tall would dramatically alter the neighborhood's skyline, where the current tallest structure, The Standard Hotel, is 19 stories tall. The mayor's office didn't immediately return a request for comment on the possible skyscraper development.

Meanwhile, though an eviction date has not yet been set for the building's meatpacking tenants, they're getting ready to say goodbye.

One of them is 68-year-old John Jobbagy, whose connection to the district goes back more than 120 years. His grandfather started butchering there after immigrating from Budapest in 1900, the AP reported.

Back then, the Meatpacking District looked — and smelled — a lot different from today, where high-end retailers like Gucci and Rolex now line the streets alongside cocktail bars, clubs, and luxury apartment buildings. In 2025, high-end French crystal company Baccarat is moving into the neighborhood, Women's Wear Daily first reported this month.

"I'll be here when this building closes, when everybody, you know, moves on to something else," Jobbagy told the AP. "And I'm glad I was part of it, and I didn't leave before."

Jobbagy told the AP that he started working for his father in the area in the late 1960s, at a time when chicken juices dribbled into the streets, and workers relied on whiskey to keep themselves warm in the refrigerated lockers.

Jobbagy later opened his own business there, which he's held onto as the neighborhood changed over the years, the AP reported.

The neighborhood became a gritty nightlife and sex club scene in the 1970s and, by the early 2000s, a hip, up-and-coming area where "Sex and the City's" Samantha Jones chose to live amid sex workers, leather bars, and an incoming Pottery Barn.

In 2009, the railway that once transported millions of tons of meat, dairy, and produce through the district was turned into a public park, the High Line.

But Jobbagy told local outlet amNY he isn't too broken up about leaving the neighborhood that would now be unrecognizable to his father or grandfather.

"It's been a long time coming," Jobbagy told amNY. "The transformations have been taking place for the last 20 years. We're well aware there are far better uses for this property than an aging meat warehouse. I'm not really sad at all."

Change has always been part of the district's DNA, and New York City's.

"It wasn't always a meatpacking district," Andrew Berman, the executive director at historic preservation group Village Preservation, told the AP. "It was a sort of wholesale produce district before that, and it was a shipping district before that." In the early 1800s, it became home to a military fort, built there over fears that the British would invade during the War of 1812.

"So it's had many lives, and it's going to continue to have new lives," Berman told the AP.