Eric Adams touts hotel conversions as part of plan to tackle homelessness in New York

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The Democratic mayoral candidate has said he wants to convert closed housing outside Manhattan into 25,000 permanently affordable supportive housing units. Although his plan is light on the details, it thrills housing advocates.

David Marque

Eric Adams announced in Brooklyn on Monday that he plans to convert struggling hotels into homeless housing.

The empty 39th Street hotel in Sunset Park first closed in 2015 after a police raid revealed it to be a brothel. The following year, the Flushing-based property owner leased the place to a new operator, who quickly changed the name. The Phoenix Hotel was meant to hint at a fresh start, though many neighbors wanted a school on the site instead.

Then the Phoenix sank. The barricaded hull, with grimy curtains still hanging from the windows, is one of three hotels located on a two-block stretch of 39th Street.

On Monday, Eric Adams called for a further renaissance of the Phoenix, this time as permanent supportive housing for homeless New Yorkers. The 44-unit hotel would be part of Adams’ plan – light to detail – to convert closed housing outside of Manhattan into 25,000 units of permanently supportive and affordable housing.

Adams, the Democratic mayoral candidate, said he would post more information about the hotel’s conversion plan on his website, but noted that he wanted to improve coordination between city agencies and streamline the bureaucratic process that delays the production of affordable housing.

“When somebody is trying to convert that, what they have to go through every time we try to do a conversion are just layers and layers of really outdated bureaucracy,” Adams told reporters at Sunset Park. . “We set the rules to accommodate what the city no longer looks like and so we need to deepen the rules that we have in place and whatever agency is responsible for maintaining those rules to eliminate them. so that we can make this conversion.

Adams campaign spokesperson Evan Thies said the ambitious goal of 25,000 units is based on an estimate from the Hotel Association of New York, which says that 20% of hotel rooms in the city could be closed permanently due to the pandemic. But many of these pieces are unlikely to be part of Adams’ nascent proposal. On the one hand, most are located in Manhattan, and Adams says he wants to convert cheaper hotels in the other four boroughs. And second, several of the 160 hotels currently closed are old and probably too expensive to be easily converted into accommodation, said HANY president Vijay Dandapani.

Regardless of the actual target, Adams’ support for hotel conversions has thrilled housing advocates, social service providers and nonprofit developers, who say a centralized city hall strategy will make plans. a reality. The proposal builds on New York’s new Housing Our Neighbors With Dignity Act (HONDA), which unlocks $ 100 million in public funds to turn commercial buildings and hotels into affordable housing especially for New Yorkers and individuals. homeless, a fraction of what it would cost to buy and convert hotels across the city.

“Let’s get bigger and better. This crisis demands a fairly broad response, ”said Laura Mascuch, executive director of the Supportive Housing Network in New York.

HONDA-funded properties would reserve 50% of housing for homeless people and 50% for New Yorkers earning no more than 80% of the region’s median income, or $ 66,880 for a single adult in the five boroughs. According to the city’s latest census, 45,305 people were staying in the Department of Homeless Services’ homeless shelters on Sunday, including 16,162 single adults.

Adams said Monday he supported the creation of “modernized ORS” or one-room occupancy units, as an inexpensive way to deal with the affordable housing and homelessness crisis. The nonprofit developers were in favor of legislation that would allow the creation of new SROs, which historically featured shared bathrooms and kitchens, but were banned in the 1950s. However, HONDA legislation requires that each apartment has a kitchen and a bathroom.

The HONDA law also limits the number of hotels that can be automatically converted to include only buildings located within 400 feet of residential areas and outside industrial activity zones. All other residential conversions would have to go through the city’s land use planning process, thus extending development. The Phoenix is ​​located in an M1 light manufacturing district, a few dozen feet from residential zoning, according to a City Planning Department map. An earlier version of the legislation would have allowed the automatic conversion of buildings located deeper in the manufacturing areas.

The Adams website is currently calling for “certain zoning adjustments and other rule changes” that “may allow for proper conversions and add a desperately needed housing stock, particularly in hotels in the outer boroughs.” He did not provide details when asked about these adjustments.

Finding a way around those constraints would speed up projects, which are already delayed by the city’s regulatory requirements, said Breaking Ground executive director Brenda Rosen. His organization has converted various hotels into supervised housing and is currently renovating a 500-unit building in DUMBO.

David Marque

Among the closed sites Adams wants to turn into housing: the old Phoenix Hotel on 39th Street in Sunset Park, which is now empty.

State Senator Michael Gianaris, HONDA’s main sponsor, said the legislation is an important start but will only fund a fraction of the units needed. Typically, nonprofit developers say it costs around $ 500,000 to convert hotel rooms to permanent accommodation, and Gianaris said large-scale hotel buying and conversion will be focused across the city.

“Having a partner at town hall will help,” he said.

Although the pandemic devastated New York City’s tourism economy, there were more than 25,000 hotel rooms under construction in July, according to hospitality consulting firm Lodging Econometrics. There are now more than 150,000 hotel rooms in New York City, more than double the approximately 74,000 in operation in 2007.

Since 2012, at least 214 hotels have received an occupancy certificate allowing them to open to customers, including 29 online since early 2020, said the Ministry of Buildings.

The residential conversion proposals have won backing from the city’s Hotel Trades Council (HTC), a union of hotel workers that backed Adams in the Democratic primary, which says the oversaturated market threatens union jobs.

Even before COVID drastically curtailed tourism, we saw unchecked hotel overdevelopment jeopardizing well-paying jobs and community safety, and now with thousands of rooms to build but no clients to fill them, the problem only got worse, ”said HTC Chairman Rich Maroko.

Dandapani, the head of the Hotel Association, said the sale may be the best option for owners with little hope of recouping their losses of the past 18 months. Earlier this month, hotels were 64% occupied, up from 90% in a typical year, he said. Revenue is down 45% across the industry, he added.

But Dandapani disputed a claim made by Adams: Many “hotels in the outer boroughs were really built as homeless shelters,” Adams said Monday.

Dandapani said he had heard this theory many times, but found it unlikely that anyone would go through the necessary certification and construction processes just to attract lucrative housing contracts from the city.

“You have seizures and they saw it cyclical so they said give me a hedge?” Let me go out and create a hotel that looks like a hotel but is actually a homeless shelter, ”he said. “It’s misinformed… Anyone who says it’s done on purpose doesn’t get the big picture.”

Properties won’t come cheap, warned Yariv Ben-Ari, a lawyer in Herrick’s real estate department who works with hotel owners.

“Buildings in these areas may not perform well and may be a new source of income,” Ben-Ari said. “But if my building is worth $ 20 million, I’m going to be paid $ 20 million.”

It is not known whether the owners of the Phoenix Hotel are interested in selling the property at 517 39th St.

Hang Dong Zhang, the real estate agent listed as the owner on the property records, did not respond to phone calls seeking comment on this story. The building is owned by an LLC called Kings King Realty.

But the cost of buying and converting should be secondary to the benefits of permanent affordable housing for homeless New Yorkers, said Shams DaBaron, an activist known as Da Homeless Hero.

DaBaron was granted permanent housing after spending years in urban shelters and overcoming COVID-19 at the start of the pandemic – an experience which he says led to his rebirth.

“I almost fell from this deadly virus, but it was after this experience that I resurrected like a phoenix from these ashes,” he said. “But despite being housed, my brothers and sisters, including more than 14,000 children, still do not have permanent housing.”


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