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A slow-going effort to convert New York City hotels into housing has reportedly moved forward at last, with one airport hotel in Queens set to be converted into apartments.
A struggling Hilton hotel, near John F. Kennedy International Airport, will be converted to nearly 300 affordable housing units, according to a plan unveiled last week by developer Slate Property group that was first reported by The New York Times.
The project will be the first to officially move forward since the program to convert hotels into housing was announced in 2021.
The Hotel and Commercial Conversions Program is to “provide low-cost second mortgage financing for the acquisition and creation of permanent affordable and supportive rental housing in New York State,” according to Homes and Community Renewal New York.
Democratic New York Gov. Kathy Hochul signed the bill into law making it easier to convert underused hotels in New York into affordable housing, according to an article on CoStar in June. It’s “part of a nationwide effort to address a tight market that pushed up residential property prices and rents,” the article reads.
The law “allows properties ranked as Class B hotels within residential zoning districts or within 400 feet of those districts to operate as permanent residential spaces,” according to the article.
New York’s program has been criticized as excruciatingly slow to get going, especially compared to a similar initiative in California that has already converted 120 sites — most of them former hotels — into 5,911 units of housing, many of them for low-income renters and the formerly homeless.
Both California and New York are in the grips of an intensifying housing shortage. In part, the legislation is an answer to the COVID-19 pandemic’s impact on New York’s hospitality market. When the pandemic largely emptied out hotels, they were presented — along with empty office buildings — as stopgap solutions to increase the housing supply.
Critics have panned New York’s initiative as inadequately funded, with only $200 million attached to the program. It has also been complicated by the return of tourism and with it hotel traffic to New York.
The conversion of the airport Hilton will cost $150 million, according to the announcement, with $48 million supplied by New York State through the 2021 Housing Our Neighbors with Dignity Act.
Apartments at the Hilton will be eligible for tenants within two years, once hotel rooms are renovated along with heating and cooling systems.
Advocates of the conversion program hope it will get the ball rolling for the slow-going program once more developers see it can be done.
“We have to make the pie bigger,” David Schwartz, principal of Slate Property Group told the Times. “We have to add more units than we’ve ever done.”
Gov. Hochul called the announcement an “important step” in a statement to the newspaper and said that the state has so far “failed to produce the housing that New Yorkers need.”
The full development team working on the conversion includes Slate along with the nonprofit RiseBoro Community Partnership and the real estate firm MSquared.