NEWS: NYC’s program to convert hotels into affordable housing is a zoning nightmare

With tourism down and many of New York City’s hotels empty amidst the pandemic, lawmakers last year created a program that aimed to convert some of the city’s unused hotels into affordable housing. The program isn’t going as planned, however.

The program allocated a $100 million budget aimed to help nonprofit developers get a foothold in the market and use the empty hotel space to provide housing for the 45,000 people living in homeless shelters and hundreds more on the streets throughout the city. (, 2022)

That money doesn’t seem to be enough. For-profit real estate developers have been winning the bidding war for the vacant hotels, with plans to turn many of them into more expensive apartment buildings. As a result, the program has received just one nonprofit applicant. (, 2022)

Part of the blame falls on the fact that the program does not address how difficult and costly it can be to change a building’s zoning and use type. Typically, a hotel in New York City is zoned for commercial use, not residential. A lengthy review by the Land Use Review Board is required for any change in use type.

Another difficulty arises from the Housing Our Neighbors With Dignity Act (HONDA), passed last year. The law requires all residences in the city to have a bathroom and kitchen/kitchenette. However, most of the hotels available for conversion would need significant and costly renovations to make that happen, making it tough for any nonprofit group to participate in the program. (, 2022)

Lawmakers have suggested increasing the program’s budget to $250 million, but it seems even that would not be enough to win the bidding war amidst soaring inflation and an oversaturated housing market. Furthermore, any zoning law amendments would take months, if not years. By then, the chance to convert these hotels to affordable housing will be gone.

Share On