Housing Shortage: New York Is Paying Homeowners Up to $125,000 to Build ADUs in Their Backyards

Millions of dollars are being offered to homeowners in New York to construct accessory dwelling units (ADUs), commonly known as tiny homes, within their backyard spaces. The state aims to distribute a total of $85 million in grants by 2028 as an effort to address the pressing need for housing, especially in the wake of migrant influx. The state had already allocated $23.4 million by August 15 for this purpose, managed by New York State Homes and Community Renewal.

What's the reason for housing shortages? 

In the past year, as tens of thousands of migrants have made their way to New York City, Mayor Eric Adams' administration has been tirelessly exploring various locations to accommodate them. These include hotels, parking lots, a cruise ship terminal and even large tents on Randall's Island. However, each proposal has been met with controversy and opposition.

Lately, the situation has taken a more challenging turn. City officials report that the daily influx of migrants has increased two-fold in recent weeks. The city is currently receiving as many as 700 migrants daily, further intensifying the ongoing crisis, as per the NY Times.

Grants for tiny homes to alleviate housing shortage

Enacted as part of the 2022 to 2023 budget, New York's Plus ONE ADU Program is designed to alleviate the housing shortage. This initiative offers grants, with a maximum value of $125,000, to homeowners who create additional housing units on their properties, known as accessory dwelling units (ADUs). The program reflects a broader strategy to combat the escalating nationwide housing shortage, a challenge that has led to high costs for both homeownership and renting across the United States. Jolie Milstein, President of the New York State Association for Affordable Housing, emphasized the urgency of exploring all avenues to increase housing availability.

How is the Governor addressing this? 

Governor Kathy Hochul aims to tackle New York's housing crisis by amplifying the housing inventory, as per Business Insider. This intention has led to the introduction of measures, including the expansion of housing choices through the implementation of initiatives like the construction of accessory dwelling units, according to a statement from a representative of the HCR provided to Insider.

Transforming garages into apartments 

During its initial funding phase, the HCR awarded nine grants ranging from $500,000 to $2.6 million to local governments such as Ulster County, the Town of Amherst and non-profit organizations like Habitat for Humanity of New York City and Westchester.

With the assistance of these grants, numerous homeowners, spanning from Buffalo to New York City, will have the opportunity to transform their garages into apartments or construct tiny homes within their property's confines, as stated by the HCR. To be eligible for these grants, homeowners are required to meet specific area median income criteria which can vary depending on their location within the state.

Creative housing solutions 

Numerous cities both within and beyond New York have taken steps to relax zoning regulations, enabling homeowners to create additional living units on their properties. In California, where the housing crisis is particularly severe, the state legislature went so far as to supersede local zoning ordinances, granting all homeowners the right to build on their land. However, a similar proposal in New York did not progress through the legislature, as reported by Spectrum News 1.

Nevertheless, Milstein views the grant program as an "innovative" approach that provides a starting point for those in areas where construction is permitted. She believes it demonstrates the potential for success in granting people the freedom and flexibility to address the housing crisis within their own homes.