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After a Year of Missed Opportunity, New York Revises Sputtering Hotel-to-Housing Plan

(CITY LIMITS) David Brand, June 13, 2022

When COVID-19 hit, policymakers saw an opportunity: The city had interconnected affordable housing and homelessness crises; the city also had hundreds of empty hotels hemorrhaging cash. But a year after the state passed a law funding the conversion of hotels to affordable housing, not a single one has happened. The experience of the Paramount Hotel on West 46th Street illustrates why.

Late last September, mayoral candidate Eric Adams campaigned in front of a boarded-up hotel in Sunset Park, describing it as the kind of place he wants to see turned into affordable housing through a $100 million state fund.

An empty building with a sordid history that antagonized neighbors, the Phoenix Hotel seemed to fit the bill for conversion. But there were two problems: First, the Phoenix did not qualify under the terms of the state’s Housing Our Neighbors with Dignity Act (HONDA) because it is located in a light manufacturing district, a few dozen feet from residential zoning. Thus, a conversion would have to happen the old-fashioned way—passing the city’s lengthy land use review process and “layers and layers of really outdated bureaucracy,” Adams said then.

Second, New York City’s hospitality sector had already begun to recover from its pandemic devastation. A few days after Adams’ visit, Phoenix staff removed the plywood and the hotel reopened, a manager told City Limits. That may have been an omen.

Nine months since that visit and a year since state lawmakers established the HONDA program, not a single hotel has been converted to housing in New York City. The state’s Division of Homes and Community Renewal (HCR), which administers HONDA, said it has still not received an application. Just two developers have come forward with informal proposals, the agency said.

There is some reason for optimism, however. The sputtering program got new life Tuesday, when Gov. Kathy Hochul signed into law revisions that should make it easier for housing providers to turn rooms into apartments.

READ MORE: New York’s Legislative Session Ends, With Mixed Results on Housing. Here’s What Passed & What Didn’t

The measure, approved last week by the state legislature, amends New York’s multiple dwelling law to allow hotels to become permanent housing while retaining their current certificates of occupancy and bypassing onerous code requirements. The legislation also overrides land use restrictions to allow such conversions in manufacturing zones located within 400 feet of a residential district—just like the Phoenix in Sunset Park. That zoning text was removed from the original HONDA bill before the vote last year, seriously restricting the number of potential conversions.

Source: City Limits