“Hotel conversions or adaptive reuse conversions are a very specialized type of construction project that requires a high level of skill and expertise,” he says. He also points to a labor shortage in the industry as a challenge. Meringoff said, however, that hotel conversions will also be complicated by supply chain issues associated with the pandemic, as well as a gradual increase in construction costs across the country over the last decade. Because the building already had kitchenettes, Fairstead was also not left with the cost of building them anew in order to comply with the law. Brett Meringoff, managing partner of development for Fairstead, which builds affordable housing, said the company purchased the Park 79 Hotel last year - which it will convert to affordable senior housing - at a cost that was lower than replacing the structure. It requires that units have private bathrooms and kitchenettes, in line with a decades-long ban on constructing new single room occupancy units in New York City.įor all these reasons, converting hotels to affordable housing is expensive, but it is still cheaper than building those units from scratch. HONDA has strict guidelines, mandating that new housing will be for people on average making 50 percent of the area median income, and no one making more than 80 percent of the area median income. Unlike California’s legislation, HONDA does not include zoning reforms, meaning NYC hotels would need to go through the city’s contentious planning process prior to conversion. The legislation’s language references a similar push in California under Project Homekey, which has financed hotel conversions, tiny homes and RV Parks in San Francisco using federal relief dollars. The law sets aside $100 million of state funds to purchase and rehabilitate distressed properties, including hotels, and transform them into affordable housing. “We definitely see the huge value in doing both and seizing the moment in time that we have that probably won’t come along again for a very long time to convert hotels,” Rosen says.Īdams’ affordable housing plan would rely on funds set aside by the Housing Our Neighbors With Dignity Act (HONDA) signed by former Governor Andrew Cuomo last June. Rosen is among those who believe the city has to act quickly to convert hotels to supportive housing, fearing that the city’s current stock of underused hotels will return to the market if the city’s tourist economy returns within the next two years. Thirty years ago, the nonprofit undertook the first hotel to supportive housing conversion in the city, purchasing The Times Square hotel in 1991 and converting it into what is now 650 units of permanent supportive housing. “Even if we’re unable to reach the full 25,000, we believe in setting the goal high because it means you’re going to get more done,” says Brenda Rosen, CEO of Breaking Ground, a non-profit supportive housing provider. While the vast majority of homelessness in New York City is the result of a lack of funds and a lack of affordable housing, there are few options for those in need of clinical support.Īdvocates applaud Adams’ goals, but acknowledge there are significant barriers to achieving his goal. Supportive housing is permanent housing with on-site case work and social services, which can include therapists and social workers, and is typically set aside for people experiencing serious mental illness, substance abuse disorder or other high-need populations, problems which disproportionately affect the city’s single adult homeless population. It’s something the city, struggling with near record-high homelessness among single adults, desperately needs. He has already staked out big ambitions, announcing in September his plan to convert hotels into 25,000 units of supportive housing for people exiting homelessness. Eric Adams is the next mayor of New York City.
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