Empty offices and hotels in New York may soon become homeless housing

A New York State Senator has introduced a bill that will allow New York City to buy financially distressed commercial buildings and turn them into housing for the city's low-income and homeless residents. Writes about it 6sqft.

The Affordable Housing Act, introduced by State Senator Michael Janaris, includes the purchase and refurbishment of office buildings and hotels that are up for sale. A similar bill could pass as commercial districts and tourist centers have not yet fully recovered from the impact of the coronavirus, and the housing crisis, especially in New York, continues.

State Governor Andrew Cuomo proposed a similar idea in his January address. The pandemic has led to a decrease in travel and an increase in teleworking, which has led to underutilized commercial space, the governor said.

Cuomo's plan includes clauses of a proposed bill that would establish a "five-year period" during which property owners can convert office buildings in New York into living space, including affordable housing.

“The housing problem in our cities has become aggravated. But the commercial real estate crisis offers an opportunity to overcome it, Cuomo said. "We need to convert vacant commercial space into supportive and affordable housing, and we need to do it now."

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Janaris's bill outlines the specifics of potential affordable housing and auxiliary housing that Cuomo's proposal is lacking. The bill, currently under consideration by the Senate, will create a program that will allow the state to “acquire, restore and retain distressed commercial real estate in order to maintain or increase affordable housing in New York for two years” after the bill is passed.

The property will then be sold or transferred to organizations that will operate and manage the property. According to the text of the bill, at least 50% of the converted real estate will be allocated for the homeless.

Affordable real estate housing will be limited to households with an income of no more than 50% of the median income for the county in which the property is located. Tenants will have full lease rights with rent no more than 30% of their income.

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“What we are doing now is seeing this huge stock of buildings now in crisis, so this is a smart way to tackle a lot of problems,” Janaris said.

The Real Estate Board of New York (REBNY) has advocated the program throughout the pandemic and backed Cuomo's proposal in January. REBNY Senior Vice President Payman Lodhi said older buildings will be easier to convert to residential as there are approximately 150 million square feet of office space available.

“If you just applied a 10% conversion rate, we think you could build about 14 housing units, and quite a lot of that could be affordable housing,” Lodhi said.