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    Opportunity and Issues of Accessory Space

    This past few days gave us a reminder of the importance of safety planning and the good things that come out of industry-wide coordination. Thanks go out to everyone who helped secure buildings, equipment, and job sites; great preparation and a little bit of good luck helped NYC dodge Hurricane Irene’s wrath. Now we’re days away from Labor Day, and the end of summer that fortunately went out with a whimper, rather than a bang.

    Coverage of the storm showed quite a few cases of water entering buildings and hitting the first floor apartments. This seemed typical for the lower-lying parts of the City. What the coverage didn’t show was the underground space – historically basement but in recent years something more.

    We’ve seen a trend among residential developers to take advantage of a DOB gray area – underground space that is not legally considered habitable. Most buildings have these spaces – below ground, part of cellars or the excavated foundation of the building. Typically these spaces would remain raw, yet the trend is shifting. Today, these spaces are hitting the market as ‘rec rooms’ – completely built out spaces that offer additional footage at a discount.

    The DOB considers these spaces “accessory” – they are generally 50% or more below grade, and not legal for sleeping. These spaces generally have limited access to light, and lack proper fire safety protection and adequate emergency egress. While these spaces can have bathrooms, they must be smaller than 5’ x 5’ feet, with no showers or tubs permissible.

    The DOB’s interpretation of these spaces gives developers an interesting opportunity. While the DOB restricts use, it doesn’t count this space and its footage against the overall floor area limit for a project. This means developers have a way to sneak in extra, marketable space into their projects.

    Hurricane Irene may have uncovered an entirely different side of the story – relating to insurance claims. Since first floor flooding inevitably leads to basement and ‘rec room’ flooding, we will likely see issues coming up with the filing of these claims. Is the space filed as usable? If so, is it insurable? What will happen if an insurance inspector compares notes with the DOB and finds usage to be out of code?

    Certainly more questions than answers at this point. In the next few weeks we will see the extent of any damages to these spaces, and this may force the DOB to consider refining its definition on use and Code.

    As always, we will stay on top of the issue and share any developments as they come along.

    Frank Fortino

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