(GATEWAY HOUSING) Ted Houghton, March 29, 2022

Albany legislators can still include essential relief in upcoming budget.

Last year’s adopted state budget appropriated $100 million to convert distressed hotels to permanent affordable and supportive housing under the Housing Our Neighbors with Dignity Act (HONDA). But just before passage, the essential regulatory relief that would make such conversions possible was removed from the legislation. As a result, none of the HONDA funding has been spent, and not one hotel distressed by the pandemic has been acquired or converted under HONDA in the last year.

As we enter the last days of the state budget negotiation, we hope the final budget includes $150 million more for HONDA, as has been proposed by both houses.

But this important new resource for permanent affordable and supportive housing for homeless New Yorkers will likely remain unspent unless the budget also includes regulatory relief introduced by the two Housing Committee Chairs, Senator Brian Kavanagh and Assembly Member Steve Cymbrowitz, Senate Bill 4937B and Assembly Bill 6262A. The identical bills respond to, and improve on, similar regulatory relief included in the Governor’s Executive Budget Proposal. With the Governor, Senate and Assembly all in agreement that relief is needed to convert hotels to affordable housing instead of shelters, and with Mayor Adams and other local elected officials calling for help to convert hotels, we hope that the Governor and the Legislature will ensure this essential legislation is included in the budget. We don’t have time to waste.  

Two articles published yesterday illustrate the issue:

“New York Law to Turn Vacant Hotels into Homeless Housing is Failing” – Martin Z. Braun, Bloomberg City Lab The title says it all in this article about the regulatory barriers that remain in place and continue to thwart New York’s effort to convert hotels into affordable housing. Assembly Member Cymbrowitz, one of the champions of the hotel conversion effort, promises that regulatory relief will be passed after the budget is finalized. But the article shows how quickly the window is closing on the opportunity to acquire hotels, as tourism returns, hotels reopen and acquisition and development costs increase. Advocates urge Albany to provide relief as soon as possible.

“From ‘Illegal’ Hotel to Housing for the Homeless on the Upper West Side” – Mihir Zaveri, New York Times 
This article recounts the Fortune Society’s January 2022 acquisition and preservation of an old SRO hotel on the Upper West Side, still the only hotel that has been successfully acquired for conversion to permanent affordable housing in New York City since the onset of the pandemic two years ago. Assisted by Gateway Housing, Fortune was able to acquire the hotel to turn it into housing because the hotel was operating illegally in a building already approved for housing, so regulatory relief was not needed in this specific (and unusual) instance. The article cites the comparative experience of California, which also made sure to pass regulatory relief when it allocated $1 billion for what is now an initiative converting over 100 hotels into more than 6,000 permanent affordable housing units for formerly homeless individuals.

The former Royal Parc Hotel and future Fortune Society Castle IV Residence