Convert hotel rooms into permanent housing: Help the homeless in two ways

Keep the rooms filled. (Cindy Ord/Getty Images)

In response to the COVID-19 pandemic, the city has moved thousands of homeless adults to hotel rooms. The virus has shuttered most of the city’s hotels, with devastating financial consequences. Homeless people would seem to be at heightened risk of infection and hospitalization. As long as New York is designated a federal disaster zone, FEMA will pay for these rooms to reduce the risk of infection — so it makes sense to move at-risk individuals into them.

It’s a good approach, but it’s only temporary. Once the federal money runs out, we won’t be able to afford the hotels anymore and everyone will have to move back into congregate shelters. Moreover, we will miss the opportunity for a long-term solution that actually reduces the need for shelter.

We should take this opportunity to convert thousands of hotel rooms to affordable studio apartments. We can do it much faster and at lower cost than trying to build new units by using long-term bond financing at a time when the city’s operating budget is forced to shrink and bond interest costs are at historic lows. Thousands of low-cost studio apartments would be a perfect addition to the city’s affordable housing plan.

With hotels experiencing devastatingly low occupancy levels, and industry experts predicting a grim long-term future, it’s possible that 20% of hotels won’t survive. In a city with almost 123,000 hotel rooms, that could leave nearly 25,000 rooms available.

While many of these rooms could be economically viable as privately owned free-market rentals, reducing pressure on market rents in this important segment of the residential market, many others would be ideal for conversion to subsidized affordable or supported housing for seniors, homeless adults currently in shelter, and people with mental illnesses, substance use disorders, or recently released from incarceration who require additional social service and healthcare support.

This would not be the first time in the city’s history that hotels have been converted to permanent residences (and back again). Several luxury hotels now being used for temporary shelter still have a few remaining permanent residents from the last time this happened. Over the past two decades, as the economy grew, the owners of these buildings very aggressively moved to buy or push out those tenants so they could convert to luxury hotels. This time around, bonds and federal low-income housing tax credits could be used to help non-profits finance the acquisition and renovation of these hotels, resulting in far more permanence for current and future tenants.

The economic benefits for New York would be huge. Such a rapid addition to the city’s affordable housing stock would reduce rents overall and increase the supply of suitable apartments for single adults currently in shelter. Many people remain stuck in shelter despite holding housing vouchers because they simply cannot find an apartment. The supply is too short.

By providing affordable apartments for them to move in to, this solution should actually reduce the census in shelter — a goal which has eluded successive administrations going back more than a decade. It would also reduce city spending on shelter enough to fund the repayment of the bonds used to buy and renovate the hotels into housing.

And that would allow the city to focus on optimizing high-quality purpose-built shelters for the people who really need the structure and intensive transitional support — for mental illness, substance use disorders or criminal justice history — that a well-designed, funded and managed congregate shelter can provide.

This is a big idea, and making it happen will not be easy. It will require a lot of leadership in city government, but the long-term benefit could be truly transformational for thousands of homeless New Yorkers and our city as a whole. Sometimes a crisis makes it possible to do things that would not otherwise be imaginable. This is one of those moments. Let’s not miss our chance.