Eric Adams is the next mayor of New York City. 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. It’s something the city, struggling with near record-high homelessness among single adults, desperately needs.
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. 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.
Advocates applaud Adams’ goals, but acknowledge there are significant barriers to achieving his goal.
“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. 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.
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.
“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.
Adams’ 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. The law sets aside $100 million of state funds to purchase and rehabilitate distressed properties, including hotels, and transform them into affordable housing. 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. 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.
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. 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.
For all these reasons, converting hotels to affordable housing is expensive, but it is still cheaper than building those units from scratch. 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. 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.
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. He also points to a labor shortage in the industry as a challenge.
“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.
While conversions are cheaper than new construction, they are still expensive, and the overall cost of funding 25,000 units of supportive housing would be higher than the $100 million set aside by HONDA. This has raised questions from the hotel industry about Adams’ plan, which have so far been vague. In a statement to Next City, Hotel Association of New York president Vijay Dandapani said, “We are very supportive of Mr. Adams plan but are looking for specific suggestions on sources of funding for the program to better inform our members on the potential options.”
While most agree that supportive housing is sorely needed, providers have come under criticism recently by tenant advocates, who have pointed to poor conditions at some facilities and the fact that in some buildings, tenants can and have been evicted for not participating in activities. The use of HONDA funds may help stem this issue, as the law requires that any new housing built with the funds must ensure full tenancy rights.
“The housing shouldn’t be taken away by not engaging in services,” says Patricia Hernandez, director of the New York Metro Team for the Corporation for Supportive Housing. Hernandez is optimistic that housing can be used for different populations, including seniors and people leaving jail as the city attempts to close Rikers.
Mr. Adams said that he would focus the hotel conversions on boroughs outside Manhattan, saying it would be cheaper. But he would need to concentrate on Manhattan if he were to achieve his goal of 25,000 units. As City Limits reported, Mr. Adams’ number was based on a hotel association estimate that 20 percent of the city’s hotels had been shuttered due to the pandemic. But many of those shuttered hotels are in Manhattan.
“I don’t think you can do it without including the borough of Manhattan,” says Rosen, with Breaking Ground. Politics may also play a role. While not presented as part of his rationale for excluding Manhattan, it is possible Adams, like current Mayor Bill de Blasio, does not wish to concentrate homeless residents in the city’s tourism and business center, fearing it would harm the city’s economic rebound.
Over the summer, de Blasio moved homeless residents from single hotel rooms into dormitory settings. The mayor presented it as a positive way to connect people with services. (Rosen shares the mayor’s view on the moves to dorm-style shelters, saying those hotels did not have proper space for social support.) But reporting has shown that many residents were sent to crowded dorm-style shelters with little attention to their health needs. In some cases when there were no open beds, people were left to sleep on a shelter floor. Rosen believes the moves were necessary and that there was a high density of people placed in hotels in the city’s center, but that supportive housing, with its services, would not lead to the same set of complaints from neighbors concerned with visible homelessness.
While Adams’ plan still needs specifics, Rosen hopes that Adams will begin the conversions as soon as possible. “It would be a shame to watch a resource that could make a huge difference in the lives of vulnerable people, watch it fall away,” she says.
Editor’s note: We’ve corrected the acronym for Housing Our Neighbors With Dignity.
This article is part of Backyard, a newsletter exploring scalable solutions to make housing fairer, more affordable and more environmentally sustainable. Subscribe to our weekly Backyard newsletter.
Roshan Abraham is Next City's housing correspondent and a former Equitable Cities fellow. He is based in Queens. Follow him on Twitter at @roshantone.