Govt. Kathy Hochul on Tuesday signed legislation expanding the state’s ability to convert struggling hotels into residential housing — releasing $200 million in state funds to fund the conversions.
The invoice allows hotels to keep their certificates of occupancy when moving to residential use instead of acquiring new ones and saves hotel conversion projects from undergoing a lengthy review process, addressing the concerns of developers who have blamed cumbersome regulations for the low number of candidates apply for state funding. Hochul said the legislation was crucial given the low supply of housing in the city district. booming rental market.
“As New York’s housing crisis continues to impact families, we’re taking bold action, embracing innovative ideas, and thinking outside the box to help ensure New Yorkers can access affordable housing. safe, livable and of high quality,” Hochul said in a statement. statement. “This new law allows us to tackle the affordability crisis head-on and convert empty and underused space into housing.”
Mayor Eric Adams has legislators in a hurry to pass legislation to address New York City’s limited affordable housing stock and increase the number of supportive housing beds for the city’s homeless population. The new rule, which applies to Class B hotels within or within 400 feet of residential neighborhoods, makes it easier for developers to access $200 million in funding the state has allocated to the Housing Our Neighbors with Dignity Act (HONDA), which first described a publicly funded hotel conversion mechanism when it was enacted last year.
However, not a drop of the first $100 million in state funding awarded in 2021 for hotel conversions was used and the New York State Housing and Community Renewal (UNHCR) – the agency tasked with funding the hotel conversions – has only received two project proposals in New York and one outside the five boroughs, a UNHCR spokesman said.
Deputy State Senate Majority Leader Michel GianarisHONDA sponsorblamed the low number of applications on the city the lengthy Uniform Land Use Review Process (ULURP) and developers being required to obtain an all-new certificate of occupancy – two hurdles that the Hochul-signed bill removes. From now on, only local real estate agencies — As the New York City Department of Housing Preservation and Development (HPD) — need to approve conversions.
“I spoke directly to interested parties who are some of the people who felt they couldn’t start these projects because they needed these changes,” Gianaris said. “I think we’re going to see an increase in interest.”
Projects to convert struggling hotels and office buildings into affordable housing will be owned and managed by non-profit organisations, according to the UNHCR. HONDA requires that half of the units be reserved for homeless people while the other half will be subject to 80% area median income cap for renters. Rents cannot exceed 30% of a tenant’s income, according to the text of the bill.
The hotel unions — whose industry was decimated when the coronavirus pandemic began – became an unlikely supporter of removing barriers to HONDA’s funding and the bill itself, as it contains a provision to protect unionized hotel employees from firing after conversion of a building, according to a spokesperson for the New York Hospitality Trades Council, a union representing nearly 40,000 hospitality and gaming workers. The union leadership must certify that the union has agreed to a conversion before it can take place, according to the bill.
“Thanks to Governor Hochul, the State Legislature, and the leadership of Mayor Adams, we now have a smart, thoughtful program that can protect the quality hotels that are critical to the recovery of our tourism industry while converting the failing hotel properties – which pay starvation wages and are a blight on neighborhoods – in a much-needed housing stock,” rich moroccanchairman of the board, said in a statement.
The HPD may face additional delays in administering the program even without a ULURP process, thanks to the staff shortage of about 400 people, which has slowed rental of affordable housing and supportive housing, Commercial Observer reported.
“I know Mayor Adams has prioritized conversions so I hope he will ensure agencies act quickly,” Gianaris said. “The faster we move, the better… It’s a very effective way of getting people back on their feet, getting them into homes, getting them the support services they need instead of just cleaning up [homeless] encampments and dumping them in shelters – which everyone can agree in some cases is worse than being on the streets themselves.
Adams – a strong supporter of the transformation of hotels into accommodation – has abolished homeless camps public spaces, forcing homeless people to move or accept a place in the city’s housing system, with limited success. The mayor also added $171 million within the budget of the city’s shelter system to accommodate the limited number of housing options for homeless people.
As New York City rents reach their highest level ever, affordable housing is key to preventing homelessness, Gianaris said. Median rent in Manhattan hit a record high of $4,000 and $3,200 in Brooklyn in May, according to a report by Douglas Elliman. About 15% of tenants reported a 20-50% increase in their rent, according to a survey of 1,500 inhabitants of openiglooa site for rating owners and listing apartments.
The average increase in New York was 7%, with Willimasburg, Brooklyn and several Manhattan neighborhoods seeing the most with jumps of more than 50%, according to the survey.
Celia Young can be contacted at cyoung@commercialobserver.com.
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