Crain’s New York Business: OPINION: City’s affordable housing crisis needs big new ideas

By Will Blodgett, founding partner of Fairstead

March 30, 2021

 

A proposal expected to be included in the state’s executive budget later this week to allow the conversion of unused office and hotel space for residential purposes has been met with skepticism by some.

 

Designed as an emergency measure to help activate vacant space as we recover from the pandemic, the proposal has left some wondering whether it’s even feasible to undertake such conversions and if the demand exists to reposition empty commercial spaces as new housing in the short time allotted by the proposal, which would sunset in 2024.

 

But the plan presents a golden opportunity to provide affordable housing where land is scarce and the cost of ground-up affordable housing development is often prohibitive.

 

Think it can’t be done? We’re doing it right now on Manhattan’s Upper West Side.

 

Look at our conversion of the former Park 79 Hotel into high-quality, deeply affordable senior housing paired with a suite of on-site social services provided by venerable neighborhood nonprofit Project FIND.

 

At a time when developers are pursuing ultra-high-end senior housing projects uptown and in cities across the country, this $60 million project, set to open early next year, will create 78 homes with rents between $500 and $700 a month on 79th Street near Columbus Avenue–at the heart of one of the most expensive neighborhoods in the country.

 

The executive budget proposal mirrors others around the country, including California’s plan to spend more than $800 million on hotel to affordable housing conversions, and would make future conversion projects like Park 79 come to fruition faster, helping to put people back to work to create the affordable housing our city needs.

 

To be sure, hotel conversions are far from the only solution to addressing the housing crisis. A robust array of policy measures is needed and the bottom line is clear: Our city needs to build and preserve more affordable housing in every borough.

 

At the same time, some have raised valid concerns that converting hotels or any other commercial spaces into new housing is a bet against New York City’s economic recovery. I don’t necessarily disagree. Rather, we think the crisis presents a more nuanced opportunity when it comes to hotels.

 

After all, look at the near-term outlook for the industry. In a December survey, the Hotel Association of New York City found that its members believe 20% of the city’s hotel rooms are lost forever, and only half of those surveyed think the industry will recover to pre-pandemic levels.

 

This deep concern for the future of our city’s hospitality industry is all the more reason for property owners with significant vacancies to convert those spaces to housing. This is especially true of hotels and motels, which have certain features such as existing rooms with available plumbing and electricity options that wouldn’t require massive overhauls as empty office space would.

 

Of course, I’m hopeful that many hotels will decide to weather the storm, ready to open their doors to tourists when they return. And it’s clear new hotel development will still be needed in the coming years. But the city’s affordable housing crisis underscores the need to think big and creatively right now about the best policy solutions for all New Yorkers as recovery work begins. That means finding more ways to provide more deeply affordable, high-quality housing.

 

The upcoming budget proposal lays the groundwork, and Park 79 provides the blueprint for how it can be done.