Hotel, office conversion bill advances with deadline at hand

State-funded takeovers on track with legislative session ending Thursday

New York /
Jun.June 09, 2021 08:28 PM
Sen. Michael Gianaris (Getty, iStock)

Sen. Michael Gianaris (Getty, iStock)

Over the past few months, New York elected officials and real estate groups have floated proposals to convert distressed hotel and office buildings into housing. Now one such plan, a government-funded program for nonprofits to take over properties and convert them into affordable housing, is poised to move forward.

The state Senate passed a bill Wednesday that would allow the state’s Housing Trust Fund corporation — the agency that administers housing vouchers and other federally funded programs — to finance the purchase and conversion of such properties. Nonprofits approved by the state would control the properties, which would be permanently affordable.

The state bill, sponsored by Sen. Michael Gianaris, was considered by the Assembly’s codes committee on Wednesday and is expected to head to a full vote before the end of session on Thursday.

Under the bill, dubbed the Housing Our Neighbors with Dignity Act, at least 50 percent of converted units must be set aside for residents who experienced homelessness immediately before moving in. The properties would be dedicated to residents making an average of 50 percent and no more than 80 percent of the area median income.

The latest version of this bill, amended Sunday, requires building service workers in the converted buildings to be paid prevailing wages — a win for the union 32BJ SEIU. Under city law, such wages must be paid at affordable housing developments that contain 120 units or more and have received city funding of $1 million or more.

The latest version also does not include the creation of a social housing fund, which had been added to the measure in a version printed in May. The fund would have accepted grants, gifts, bequests or loan authority to finance the Housing our Neighbors with Dignity Program.

The latest iteration gives nonprofits more flexibility in the housing model they choose, requiring a regulatory agreement with the state or local housing agency that the apartments will remain permanently affordable. The bill no longer explicitly mentions community land trusts or other long-term ground lease ownership structures as an option for nonprofits acquiring properties.

It also leaves out provisions inspired by a separate bill introduced by Sen. Brian Kavanagh, which provided a shortcut for certain hotel conversions.

Gov. Andrew Cuomo had initially proposed hotel and office conversions with some affordable housing as part of the state budget. That proposal was criticized by elected officials and housing advocates for overriding local zoning rules and not creating enough affordable housing. The state budget ultimately included $100 million for conversions of distressed commercial properties, without any specific rules attached.





    Related Articles

    arrow_forward_ios
    Gov. Kathy Hochul (Photo by Sasha Maslov)
    At REBNY gala, Hochul pledges to “support” real estate
    At REBNY gala, Hochul pledges to “support” real estate
    (Getty/Illustration by The Real Deal)
    Rent board approves first full-year, post-Covid hike: 3.25%
    Rent board approves first full-year, post-Covid hike: 3.25%
    St Regis Hotel in Abu Dhabi, Former Afghan President Ashraf Ghani (Marriot, Prime Minister's Office (GODL-India)/GODL-India/via Wikimedia Commons)
    Ex-Afghan officials living in luxury properties
    Ex-Afghan officials living in luxury properties
    Jackson Township Mayor Michael Reina (Jackson Township, iStock)
    New Jersey town settles discrimination suit
    New Jersey town settles discrimination suit
    Jersey City mayor Steven Fulop, Kushner Companies' Nicole Kushner Meyer and render of One Journal Square (Getty Images, Kushner Companies)
    “Charlie, we did it”: Kushner breaks ground on long-delayed towers
    “Charlie, we did it”: Kushner breaks ground on long-delayed towers
    Raúl Gorrín and 20 West 53rd Street (Google Maps, iStock, Asilvabuena, CC BY-SA 4.0 - via Wikimedia Commons)
    NYC to auction Venezuelan media mogul’s Baccarat apartment
    NYC to auction Venezuelan media mogul’s Baccarat apartment
    Woodbury Common Premium Outlets in Central Valley, NY with Simon Property Group CEO David Simon (Simon Property Group)
    Simon to add 160K sf, hotels to Woodbury Common
    Simon to add 160K sf, hotels to Woodbury Common
    Gurney’s Montauk on Long Island (Gurney's Resorts)
    Hamptons hotel prices up 51% from 2019
    Hamptons hotel prices up 51% from 2019
    arrow_forward_ios

    The Deal's newsletters give you the latest scoops, fresh headlines, marketing data, and things to know within the industry.

    Loading...