West Side Rag » State legislation pending to facilitate conversion of distressed hotels into permanent affordable housing


Posted on May 15, 2022 at 02:52 by West Side Rag

The Park Royal Hotel, 258 W. 97th. Photograph by Joy Bergmann.

By Bob Tannenhauser

A controversial topic was discussed at a recent meeting of the CB7 Housing Committee: the conversion of ‘distressed’ hotels into permanent affordable housing.

A bill to overcome current legal barriers to such conversions, called the Kavanagh Bill, is currently pending in the New York State Senate.

An existing law — the Housing Our Neighbors with Dignity Act (HONDA) – is already allocating $200 million for the acquisition of distressed commercial properties, i.e. office buildings and hotels, which will be operated by non-profit organizations as housing with support services. Supportive housing is permanent affordable housing with on-site social services, such as case managers and job promoters.

Ted Houghton, president of Gateway Housing, a nonprofit organization providing technical assistance to nonprofits that provide supportive housing to previously homeless people, was the guest speaker at the meeting. Mr. Houghton explained the reasons for the dire need for permanent supportive housing in New York.

In 1955, there were approximately 93,000 mental hospital beds in New York. Deplorable conditions led to the closure of many hospitals, and by 2016 the number of available beds had dropped by 97%.

At the same time, many SROs – traditionally the first rung of the housing ladder – have disappeared. According to Braked, “Beginning in 1955, the city passed laws to restrict the construction of new ORS, and in the 1970s began offering tax breaks to homeowners to tear them down or convert them to almost anything else. , especially high-end apartments or tourist boutique hotels. Between 1976 and 1981, these incentives resulted in the loss of “nearly two-thirds of all remaining SRO units”, according to a CUNY report.

New construction of affordable housing has not kept pace with demand, Houghton said. “Over the past 30 years, New York City has seen an increase in the need for affordable housing by 1.5 million people, but only built 300,000 new units.” The problem has been exacerbated in recent years, he added, by the emptying of prisons and jails, in part due to the pandemic.

The pandemic has hit the hospitality industry, but also provided an opportunity to create permanent supportive housing by taking some of the struggling hotels and allowing nonprofits to operate them. The best model for this is the Royal Park Hotel at 97th and Broadway, purchased by the Fortune Society.

Under current law, the renovations needed to comply with city building codes when turning existing hotels into permanent accommodations are extremely expensive, Houghton said.

The Kavanagh Bill would allow the conversion without requiring a change of certificate of occupancy from hotel to accommodation and without major renovations. For example, instead of requiring a minimum of 150 square feet of living space, certain existing living space conditions and other issues such as elevator shaft and door size would be protected. The new units would have bathrooms and kitchens.

The chair of the committee, Louise Craddock, clarified at the start of the discussion that “we don’t want to recreate SROs. We want to create studios and apartments for people where they can live permanently. »

Ira Mitchneck raised the question of whether the available HONDA funding is sufficient. The first $100 million, Houghton explained, must be spent in New York. The rest can be spent in other areas of the state, as well as in the city. The HONDA funds would be seed funds to acquire distressed properties. The balance of the funding required for the renovations would come from “contract funding”.

Essentially, the sponsor would get a 30-year contract from the city whereby the city would agree to pay a certain amount per studio. This should allow the association to obtain the necessary funding, based on the source of income provided by the contract with the city. Houghton said HONDA money should be used for acquisition costs rather than expensive renovations.

As the meeting drew to a close, Sheldon Fine wondered if permanent supportive housing was the solution for those living on the streets, including people with mental health issues or those just released from prison. or jail. Mr Houghton agreed that if you put people straight from the street into housing, “as a rule it doesn’t work. There is a need for transitional housing,” he said. He noted that homeless people on the streets seem “more psychotic than I’ve ever seen” and “we don’t have a housing model for them.”


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