Zohran Mamdani plans to add 20,000 tiny homes to backyards and basements across NYC — What are ADUs, and how can they help ease the housing crunch?

"One of the solutions to the housing crisis can be found in our backyards, our attics, or our basements — in an ancillary dwelling unit," he shared in a statement (3). "That's why our administration is making it easier and more affordable to build an ADU through a library of pre-approved plans and new financing options."

By making it easier for New Yorkers to convert excess space in their homes or yards into tiny homes for family members or renters, the Mamdani administration is allowing the city to grow "while keeping the character of the neighborhoods [locals] love."

What is an ADU, and what can one provide city residents?

The NYC Department of Housing Preservation and Development (4) (HPD) defines an ancillary dwelling unit, sometimes called an accessory dwelling unit, as a "small, independent residential unit located on the same lot as a primary home."

An ADU can be created within an existing home or as a separate structure that sits on the same property. Think: basement apartments and attic conversions to converted garages and detached backyard units.

In December 2024, the New York City Council adopted City of Yes for Housing Opportunity, which marked a major amendment to the city's zoning text regulations. The reform expanded opportunities for housing development, formally defining ADUs (5) in the zoning code for the first time in the city's history.

"ADUs can help meet the housing needs of New York families of all cultures, life stages, and sizes," Annemarie Gray, Executive Director of Open New York, said in a statement (6). "A cottage for an aging parent. A first apartment for an adult child just starting out. A dedicated space for a caretaker or extended family."

Alternative housing options

In a city full of exorbitantly priced skyrises — where every inch is negotiated and every corner is claimed — demand relentlessly outpaces supply.

Many New Yorkers are left pouring disproportionate chunks of their income into rent with too few options and paychecks that haven't kept pace with the cost of simply having a place to land. Over 40% of all renters (7) spend at least 30% of their income on rent, while one quarter of renters spend at least half.

Polling by the Citizens Housing and Planning Council (CHPC) found that low-density neighborhood residents, in particular, struggle to find affordable housing within their communities.

"New York City doesn't just need more housing — it needs more kinds of housing, at a wider range of price points," Howard Slatkin, Executive Director of CHPC shared in a statement (8), adding that ADUs help "fill in gaps in [the city's] housing stock," which is beneficial to both renters and homeowners alike.

Diversified income

Beyond offering affordable housing to renters, ADUs can serve as an added source of income for homeowners by converting underutilized space into steady rental income. Converting basements, garages, or backyard structures into livable units, allows owners to generate monthly cashflow that can help offset mortgage payments, property taxes, and maintenance costs.

In a high-demand rental market like New York City, even a small, well-designed unit can command meaningful returns. ADUs can also give homeowners more financial flexibility and add to a home's long-term value, creating a cushion in an increasingly expensive city.

Christie Peale, CEO and Executive Director of Center for NYC Neighborhoods has said (9): "By making ADU development more accessible, the city is giving homeowners a tangible opportunity to generate income, continue building intergenerational wealth, keep their families together, and stay in their communities."

Community anchoring

ADUs can also help longtime locals hold onto their place in the city they've called home. Instead of being pushed out by rising costs, they can adapt, keeping community ties intact and preserving the people and stories that ultimately characterize neighborhoods.

"New Yorkers want the ability to grow older in the neighborhoods where they raised their families and built their lives," Beth Finkel, State Director, AARP New York, said in a statement (10). "ADUs can help older homeowners remain in their communities by providing additional income that helps them afford to stay in their homes, while also making it easier and more affordable for family caregivers to live nearby. Expanding these options is an important step toward helping more New Yorkers age in place with dignity, independence, and the support they need."

Sabrina Lippman, CEO of Habitat for Humanity New York City & Westchester County, agreed (11), adding that ADUs support the homeowners "who anchor [the city's] neighborhoods."

ADUs are easier than ever to establish

Due to the City of Yes for Housing Opportunity and subsequent regulatory changes, one- and two-family homeowners across New York City can now more easily add ADUs to their properties.

Mamdani's reopened and new programs — the Plus One ADU (12) and ADU for You (13), respectively — are expected to aid the addition of 20,000 tiny homes over the next 15 years.

Plus One ADU

The $85 million Plus One ADU program (14) — which originally launched in 2023 but has been closed since February 2024 — was established to create over 550 ADUs by offering financial and technical assistance to qualified homeowners.

Established with city funding and grants provided by the New York State Homes and Community Renewal — and operated in partnership Restored Homes HDFC — the program provides homeowners with up to $395,000 in financial support and technical assistance.

Plus One ADU received over 1,300 submissions within two weeks of first launching in 2023. Mamdani expects it to have the same overwhelming interest in 2026 as the cost of living in New York City continues to rise and city dwellers seek diversified sources of income.

ADU for You

With the new ADU for You (15) site, homeowners will have an easier time navigating the complex bureaucratic details and financing options when adding an ADU. The resource features an ADU Guidebook, a regularly updated Pre-Approved Plan Library, and site feasibility analysis and cost estimating tools.

"ADU for You serves as a one-stop shop for homeowners, providing critical information to enable New Yorkers to take full advantage of the tools unlocked by City of Yes for Housing Opportunity," explained Jesse Lazar, Executive Director of the American Institute of Architects New York (AIANY), in a statement (16). "The collection of pre-approved ADU designs showcases the opportunity to build various types of quality ADUs at different price points, utilizing a range of materials and creative design solutions that meet the unique needs of the homeowner."

The Mamdani administration is also launching a simplified permitting process for pre-approved ADU plans. The city connects homeowners who select ADU options from the pre-approved library with the registered professionals who created them. This will allow homeowners to obtain site-specific approval.

"By making it easier to navigate rules and offering pre-approved designs, this new homeowner toolkit will help New Yorkers turn the idea of an accessory dwelling unit into a reality," shared (17) Sideya Sherman, Director of the Department of City Planning.

How to add an ADU to your NYC residence

The city's library of pre-approved designs makes it easy to confirm that ADUs are livable and up to par to pass city reviews. The first step to adding one, however, is knowing if you qualify as a homeowner.

Homeowners with one- or two-family detached or semi-detached homes in New York City can create an ADU under the new laws, provided the ADU is no more than 800 square feet and passes building inspections. Eligible owners must also live on-site.

It's important to note, however, that there are some restrictions (18) in specific areas like historic districts, high-hazard flood zones, and neighborhoods outside the City's Greater Transit Zone (19).