Can Eric Adams really turn 25,000 hotel rooms into accommodation?


Photo: Andrew H Walker / Shutterstock

Last month, Eric Adams, the alleged 110th mayor of New York City, stood outside a boarded up hotel in Sunset Park, Brooklyn, to present his plan to tackle the growing homelessness problem. Convert enough properties like the one behind him into 25,000 permanent apartment rooms, as he proposed, and you would have room for about half of the people in the shelter system. It’s an idea that has been part of the political landscape for months, as Adams and other Democrats vying to lead the city have proposed the return of single-bedroom hotels, dormitory-style low-income housing in large numbers. party banned since the 1980s for its role in the deterioration of social conditions in the city after World War II. But his plan, as it stands, had few other details except that it would be focused away from Manhattan and the other boroughs. “If we invest now and streamline city rules to allow these conversions, we can create tens of thousands of new supportive housing units with services to get homeless New Yorkers off the streets,” he said. Adams said in a statement.

But in the weeks that followed, the proposal raised pointed questions about how Adams can actually bring his plan to fruition. A campaign insider directly familiar with the plan said the 25,000-room figure was taken from an investigation into the hotel industry that includes Manhattan buildings, and that Adams plans to bypass the usual complicated process for making zoning changes with a process called “one-off rezoning” – targeted changes to how individual buildings can be used, which is found to be unconstitutional in New York State. The rebound in the real estate market, the reopening of international travel and zoning laws make the entire project unlikely to be quick or cheap, and the campaign is already assessing what other programs will need to cut to fund it.

The Adams plan aligns with the priorities of the New York Hotel Trades Council, the powerful union representing hotel workers, at a time when the future of the hospitality industry is on shaky ground. HTC, which backs the plan (and endorsed Adams’ campaign), is also the force that strangled Airbnb in New York City and put forward a proposal that would have effectively frozen construction of new hotels. But critics of Adams’ plan fear it will have lasting effects on tourism – a major provider of New York’s tax revenue – by permanently reducing the supply of available rooms, excluding all visitors. except the richest and reducing the amount of money raised to fund social programs that help the homeless in the first place. “The real question is, ‘Are we having a negative impact on our economy by doing this and making it harder for one of our critical industries to come back? ”Said Ester Fuchs, director of the Urban and Social Policy program at Columbia University and former advisor. to Michael Bloomberg.

Hotels have been a growing target for conversions since the start of the pandemic, when the city paid for thousands of hotel rooms per night to reduce the spread of COVID-19 among the homeless population. Adams’ plan – which would make these rooms permanent housing – would rely on nonprofits, funded by the city, to buy the hotels and convert them. Shams DaBaron, a homeless advocate who supports Adams’ plan, said private ORS living spaces would make it easier for people to avoid drugs and alcohol – often a condition of probation – than places current gathering. “If you get people into homes quickly, you can better stabilize them and provide them with the services they need,” he said.

These buildings have not yet been sold or even put on the market. Building the PBOs will require the cooperation of a hundred hotel owners, and getting them to strike a deal will be difficult, if at all possible. “The problem with my industry is that we don’t have, say, American Airlines, which owns all the planes. Almost every hotel owner is a different entity or person, so it’s very difficult to get them to act together, ”Vijay Dandapani, president and CEO of the Hotel Association of New York City, told Curbed. There were, according to his group’s tally, around 123,000 hotel rooms in New York City in 2019, with around 19,000 more in the pipeline. Lately, around 40,000 are empty, and an investigation by the group found that more than half of them – around 25,000 – are likely to be permanently shut down anyway, Dandapani said. The Adams insider said an “aggressive” plan would convert 5,000 to 10,000 in the first year, but admitted it would become more difficult to do so afterwards.

There is also the issue of zoning. Most hotels are zoned for industrial or manufacturing districts, which do not allow permanent residences. Changes to these rules usually require the submission of proposals under the Uniform Land Use Review Procedure, followed by hearings before community councils, approval by district presidents, passage through city ​​council committees, the passage of the legislature and the enactment of the law by the mayor – approximately A 12 to 18 month process that, when completed, could allow the tourism industry to recover and have more weight to demand a higher price per room. In other words, the window in which the Adams administration could achieve such a feat may already be closing.

The Adams people want to act quickly, and an insider described plans for targeted “one-off rezonings” that would allow hotels to convert to ORS. “The current process is just too slow. We must – we have had to – profit from the market, ”said Evan Thies, Adams campaign spokesperson. He added that Adams’ plans to change zoning laws is a process that would take three to six months, including a possible public comment period. After that, he would go to the City of New York City Department of Planning, which is controlled by City Hall.

The problem is, “point zoning” has been banned in New York City since at least 1951. “Point zoning, by definition, is illegal – period,” said Michael S. Hiller, an attorney specializing in law. land use whose litigation has managed the Metropolitan Museum of Art to sink deeper into Central Park. Thies was dismissive of these concerns. Adams, he said, “is not afraid to fight to create more affordable housing wherever and whenever he can, as long as it doesn’t reduce the quality or damage it. ‘impact on the public safety of these areas and that this is done. in a well thought out way.

The price per building would be at the heart of any deal, and what owners find acceptable will vary widely. “Each building is different, and each capitalization is different,” explains Eric Anton, broker at Marcus & Millichap. “A building that was built in the 1930s that has rent-stabilized units and that was a low-end hotel – that could work. Whereas a more modern hotel – tall, skinny, 25 stories, built over the past 10 or 15 years – that probably wouldn’t be the case. Edward Cardenas, who heads regional sales and marketing for Chase Hotel Group, which owns a hotel in Queens, said buying owners between $ 225,000 and $ 250,000 a room would be a reasonable rate – down from around 300,000. $ a few years ago – and added that the cost of gut renovations to turn buildings into residences would roughly double the total cost. And some hotel owners will want more because they are doing well, sometimes outside the law. Ted Houghton, president of the nonprofit Gateway Housing, said he offered $ 200,000 per room to buy a hotel in Manhattan last year, but the owner would take no less than $ 350,000 – and would rather just illegally rent the rooms as permanent residences instead of wasting money on a sale. “You can’t do that,” Houghton recalls, telling the owner. He said, ‘Look at me. “And hotel owners will have less incentive to sell at low prices if city council follows through on a plan to require special permits to build new hotels,” said Edward Kober, senior researcher at the Manhattan Institute and former director planning of housing, economy and city infrastructure. “The city would not fundamentally solve its housing problem, but it would pay top dollar for hotel rooms scattered around the city and then it would have to pay more to convert them into housing,” he said.

City planners fear the Adams plan will affect the future of tourism in the city, pushing the price per room to unaffordable levels and sending tourists elsewhere. When asked to respond to criticism that Adams’s plan was in the best interests of HTC, Thies said, “I don’t agree with the premise of the question.” At its peak in 2019, New York tourism grossed $ 80.3 billion, according to the New York State Comptroller’s Office. According to an IBO tax revenue analysis for Curbed, the city would lose about $ 6 million a day in taxes if Adams’ plan were fully implemented and 25,000 units were taken out of supply.

Still, the potential benefits of ORS living for homeless people could be major. Having private and safe spaces for people with on-site medical services could help people stay healthy and give them time to find jobs and resources to leave the shelter system, he said. stated – which could ultimately lower the public cost of medical services, too. “What are we going to do with all these people, many of them black and brown, who are going to go to the shelters?” ” he said. “We must act now to save lives. “

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