By ARUN VENUGOPAL
April 24, 2024, 7:01 AM
On a recent afternoon, sneakered tourists streamed out of the various hotels located along a quiet stretch of Jamaica, Queens. The Radisson, a Hampton Inn, a Residence Inn by Marriott, and erstwhile JFK Hilton just a stone’s throw from JFK Airport represent the future of affordable housing in the city, as well as what is perhaps a missed opportunity.
Months of interior demolition work is concluding at the 350-room Hilton property on 135th Avenue, just east of the Van Wyck Expressway. A massive renovation will soon follow. The structure is set to reopen in October 2025 — not as a hotel, but as a 318-unit housing complex for low-income and formerly homeless New Yorkers.
The project, known as Baisley Pond Park Residences, is the result of a 2021 state law called the Housing Our Neighbors with Dignity Act, or HONDA. The measure was designed to convert hotels into housing. It took shape early in the pandemic, as the bottom fell out of the city’s hotel industry and tens of thousands of rooms suddenly became empty.
But nearly three years after its passage, housing advocates and others acknowledge that the HONDA program has little to show for it besides the Hilton project, which is being lauded for its planned amenities, services and design, and being lamented because it could very well be a one-off.
Top elected officials like Mayor Eric Adams and Gov. Kathy Hochul were among the project’s champions. In a December 2023 statement, the governor said the JFK Hilton’s transformation into housing would “help to bring our state one step closer to building the affordable, supportive and sustainable homes that New Yorkers deserve.”
“We had this massive window of opportunity,” said Amy Blumsack, the director of organizing and policy at Neighbors Together, which advocates for homeless and low-income Brooklyn residents, “and I think in some ways it was missed.”
The Hilton’s $167 million conversion is partly being paid for by $48 million in state funding – out of the $200 million allocated to HONDA. Housing and development experts say the program faced numerous challenges, including shifting market forces in the city’s hospitality industry spurred by the pandemic, red tape and opposition from unions, as well as insufficient political will to confront New York’s housing crisis. Its course was also affected by the migrant crisis, which started in 2022 as migrants were sent to hotel shelters by the busload.
“HONDA was started with all the good intentions,” said Vijay Dandapani, the president and CEO of the Hotel Association of New York City. But ultimately, he said, the funding was insufficient for the problem it sought to address. “It was not enough to move the needle.”
There are ‘all sorts of weird, esoteric rules in New York City’
Baisley Pond Park Residences will look out on a quiet residential neighborhood, half a mile from the airport. Despite its location near two busy highways and a bustling airport, the area has a placid, suburban feel. The sidewalks are noticeably clean and many of the houses across the street from the hotel sit behind white picket fences. Occasionally, an MTA bus stops nearby to let local residents off or take on tourists from the nearby hotels. The bus stop is conveniently located just 20 or 30 yards from Baisley Pond Park.
According to Slate Property Group, the private developer that acquired the property with its nonprofit partner RiseBoro Community Partnership, 274 of the 318 residential units at Baisley Pond Park will be studios, with 33 one-bedroom apartments and a smaller number of two- and three-bedroom units. Sixty percent of the completed units will be set aside for formerly homeless New Yorkers, while monthly rent for the remaining affordable housing units will range from $784 for a studio to $1,493 for a two-bedroom apartment.
But landing on a hotel property such as JFK Hilton – really any hotel that could be converted to housing under HONDA – wasn’t easy. David Schwartz, the co-founder and principal of Slate Property Group, said the company “looked at every hotel in the city,” but struggled to find sites with “a combination of good, decent rooms that are big enough for people to live in.”
Many potential sites were eliminated because their rooms weren’t big enough to include a kitchen, as is required under the NYC building code. Schwartz said other properties had big rooms but were situated within manufacturing districts, which meant they weren’t zoned for residential purposes. The ideal site, the company recognized, would accommodate at least 150 residents, which meant it could achieve economies of scale.
In many ways, the JFK Hilton, built in 1987, served the needs of the project. In addition to its size, the Hilton was blessed with “a huge lobby” and lounge, “so we have all this space to work with, which is really exciting,” said Emily Kurtz, the vice president of housing at RiseBoro Community Partnership.
The space allowed for the construction of multiple community rooms as well as a computer lounge and fitness room. In addition to staff tasked with onsite programming, there will be social services case managers. This is especially important, Kurtz said, given the population of many of the people who will be living at Baisley Pond Park.
“Residents will be coming directly from the shelter system, folks that have been in shelter for a while,” said Kurtz. “They’ll be provided permanent housing, with a key to a door, independent living and then supported by onsite supportive services staff.”
The entire project will take 21 months to complete, said Schwartz, versus the 36 months had it been a conventional ground-up construction, where the foundation alone might’ve taken six months to complete.
“It’s a lot less work,” said Schwartz, “and the beauty of the hotel rooms is that they all have windows to the outside and that’s really the trick is that they’re already set up. You have an elevator and stairs in the middle of the building, hotel rooms on either side. And it feels like an apartment building.”
Ariel Aufgang, the architect of the site, said creating kitchens in the studio apartments will be a challenge.
“There’s all sorts of weird esoteric rules in New York City about separating cooking spaces from living spaces,” said Aufgang. “You shouldn’t sleep in a room where people are cooking.”
But aside from the technical hurdles, Aufgang said there are also grace notes, including the covered pool near the lobby that will soon be turned into a garden.
“It’s enclosed in glass,” said Aufgang. “It’s going to be a lovely garden.”
‘The two puzzle pieces fit together’
The idea of turning the city’s hotels into affordable housing gained ground among policymakers and housing advocates early in the pandemic when tourism nosedived, leaving hotels sitting empty. Joseph Loonam, the housing campaign coordinator at Vocal New York, said “robust conversations” were happening by the end of March 2020, when the pandemic shutdown was kicking into high gear.
“It was hugely exciting and it had incredible potential,” said Blumsack of Neighbors Together. “There were all of these empty hotels just sitting there and all of these people who needed a safe place to stay due to COVID.”
“The two puzzle pieces fit together,” she said.
But there were different ideas about how to move ahead. Samuel Stein, a senior policy analyst at the Community Service Society, a social welfare organization, urged the state to buy the hotels.
“That was the way that the (HONDA) legislation was initially drafted,” said Stein. “And the response we got from the state government was, ‘that’s not our role. We don’t want to be in possession of real property.’ There was very little appetite from that for anybody.”
Instead, HONDA stipulated that at least 50% of the units go to homeless New Yorkers and required a nonprofit organization to purchase the site, either by itself or in partnership with a private developer. The state allotted funding to assist in the purchase, initially a $100 million fund that was eventually doubled.
But even that amount was inadequate, given how expensive New York commercial real estate is, said attorney Daniel M. Bernstein, who runs the Affordable Housing practice at Rosenberg & Estis, a law firm specializing in New York City real estate.
Bernstein said that $200 million “sounds like a lot, but in the context of developing affordable housing for low-income households, it’s actually only a couple of buildings worth, depending on the scale of the buildings,” and added that he’s advised eight to 10 clients on the matter.
Some hotel owners thought the subsidy was inadequate, he said, while other properties ran up against zoning regulations that made it hard to convert to housing.
“There were just a lot of headwinds,” he said.
In a statement, William Fowler, a spokesperson for the mayor, said, “the biggest barrier remaining to pursuing more hotel and office conversions — and other kinds of housing development, big and small — is the city’s outdated zoning laws, which is exactly why we’re working to change them.”
According to Dandapani of the Hotel Association of New York City, the thousands of migrants placed into hotel rooms by the city artificially inflated the hospitality industry, making hotels less susceptible to market forces.
“There are at this point some 15,000 odd rooms that are being catered to the migrant,” said Dandapani. “It’s obviously temporary. Nobody knows precisely how long it would last, but that has taken this inventory out of the market and resulted in compression, whereby other hotels that are not catering to the migrants can have better occupancies and better rates.”
Eventually, Blumsack said, “the interest was just not as much as we had really hoped,” and as the worst of the pandemic subsided, tourists began returning to the city and its hotels.
For many housing advocates, Baisley Pond Park is the exception that proves the rule about HONDA.
“The JFK conversion is great,” said Joseph Loonam of Vocal New York. “But ultimately, there’s just not enough motivation on the developer and on the government side to really get units online.”
Believers among the skeptics
While HONDA left many housing advocates frustrated, some people continue to hold out hope for the program.
For instance, Dandapani said the situation could change if migrants currently being housed in hotels move out, leaving behind properties that require expensive improvements.
“Whenever the migrants exit the hotels, the condition of the hotels is going to require substantial, and you can underline substantial, FF&E: that’s furniture, fixtures and equipment upgrades.”
Additionally, in her new budget deal Hochul included tax breaks for developers who take on office conversions if they agree to make at least 25% of the units affordable.
And a spokesperson for New York State Homes and Community Renewal, the state agency that oversees affordable housing, said that at least two more hotels are likely to be approved for conversions.
“HCR continues to work closely with nonprofit partners throughout the state who are seeking to convert distressed hotels and underutilized commercial buildings to the safe, modern, and affordable housing New Yorkers need,” said Charni Sochet, a spokesperson for HCR.
Schwartz of Slate Property Group is decidedly bullish on conversions, and despite his company’s considerable efforts to find an appropriate site in the JFK Hilton, estimated “there certainly are dozens and dozens of hotels that could be good candidates” across the five boroughs.
He predicted that HONDA would eventually win converts.
“When you do something new and innovative with government, there are a lot of people waiting to see if you can be successful,” he said.
The proof, he said, rested in Baisley Pond Park.
“A year from now we’ll see more of these,” he said.