Gut & raise floor joists?

[Jesse McBride]

Hi all, we are currently renovating my moms home built in 1900. It has a 1st floor with 12 ft ceilings and basement with 6 ft ceilings. We have party walls on both sides.

Our goal:

We are looking to make this 2 separate apartments. Mom will live in 1st floor and we will rent the basement. 

Our challenge:

A new bill was introduced in Jersey City last year that requires basement ceilings to be 9ft in height.

Our idea was to gut the entire home down to the studs, and raise the floor joists by 3ft so we have 9ft ceilings in both units. (We will be completely redoing the floors anyway).

If we do this, we do not need to do any underpinning work, (as per our structural engineers report).

A contractor was leaning towards digging down, but going down 3ft and underpinning the entire basement sounds more expensive and time consuming.

(I am pretty well informed on construction methods and technologies, but I am not an engineer nor am I trained in construction, so my knowledge is limited).

Any thoughts here? Thanks.