New York Gov. Kathy Hochul signed legislation on June 7, taking effect immediately, that will ease red tape for hotel owners and developers considering the conversion of underutilized, sometimes vacant hotels into affordable residential units.
The bill allots $200 million in public financing to convert distressed hotels hit hard during the pandemic into affordable housing desperately needed to shelter homeless and low-income New Yorkers during a time of record-high rental rates across New York City.
Until now, previous rules under the Housing Our Neighbors with Dignity Act (HONDA) apparently required owners and developers to jump through too many hoops to access the subsidies, as very few parties had applied for the public funding. The new bill (S. 4937C/A. 6262B) provides that eligible hotels will no longer need to apply for new certificates of occupancy for the change to residential units and a burdensome review process will be eased, instead allowing local housing authorities to approve these hotel-apartment conversion projects.
- Eligible hotels must be Class B and in or within 400 feet of districts zoned for residential use, may not be in industrial business zones and must meet certain other conditions.
- If the hotel workers are represented by a union, the bill requires union approval of each conversion project in order for it to go forward.
- The renovations must be financed by New York Sate in accordance with HONDA.
- The tenants of the affordable units can earn no more than 60% of AMI. The units are rent stabilized and subject to permanent affordability restrictions.
Hotel owners or developers with questions about the new law or the conversion process may contact Borah, Goldstein, Altschuler, Nahins & Goidel, P.C.. Our attorneys would be happy to take such inquiries.
