A Bill to give New York State a Framework for its $100 Million Plan to Buy Distressed Hotels and Office Properties and Convert them into Permanently Affordable Housing was Pushed forward by the State Legislature, Wednesday. Gov. Andrew Cuomo (D) has Not Committed to signing the Bill.
The Housing Our Neighbors With Dignity Act (A6593B) would Require that at least 50% of the Converted Properties be set aside for those experiencing Homelesness. The Rest would go to Tenants who make 50% to 80% of their area Median Income. The Properties would be Managed by Nonprofit Organizations and would be Protected by Rent-Stabilization Laws. Rents would be Capped at 30% of Area Median Income.
The Mmeasure was Primarily Sponsored in the Senate (S5257C), by Sen. Michael Gianaris (D-12th District, Queens), who was joined by Four Co-Sponsors: Sens. Alessandra Biaggi (D-34th District, Bronx/Westchester); Jabari Brisport (D-25th District, Brooklyn); Robert Jackson (D-31st District, Manhattan); and Samra Brouk (D-55th District, Rochester).
More than 200 Hotels in New York City are Closed or have Shut-Down Permanently. Office Buildings are reporting a measly 10% to 15% Occupancy Rate.
To keep from going Out-of-Business, some Hotels in the City have entered, into Contracts with the Government, to Temporarily house Homeless People, keep them from Overcrowding Shelters, and Reducing their Likelihood of Contracting Covid-19.
Cuomo announced, in January, that he would Propose Legislation to create a Five-year Period in which Developers and Property Owners could Permanently Convert Office Buildings and Hotels into Apartments through Relaxed Zoning Regulations that would encourage Residential Development. But Local Elected Officials balked at those Plans, claiming it was just another Giveaway to the City’s Real Estate Community and that it didn’t do Enough to Solve the Affordable Housing Crisis.
For the Real Estate Community, which has been Devastated by of the Pandemic, the New Legislation is part of Ongoing Conversations with the Private Sector, which is Excluded from Participating in the Bill’s Conversions.
“Enabling more commercial-to-residential conversions can play a significant role in creating more dynamic central business districts, strengthening the city’s retail and small-business sectors and producing much-needed housing including affordable housing,” said James Whelan, President of the Real Estate Board of New York. “To achieve that vision will require various approaches including close collaborations between the public, private and nonprofit sectors.”
“Public-Private Partnerships are important to the Measure because the Law’s Effectiveness would be Limited by the Availability of State Funding”, said James Power, a Kramer Levin Land-Use Lawyer.
“Repurposing Buildings saves Time and Money compared with Ground-Up Construction”, said Brenda Rosen, President and Chief Executive of Breaking Ground, New York’s Largest Supportive Housing Provider.
The Affordable Housing issue has been a source of Contention between Private Developers and Elected Officials.
New York City Mayoral Candidates, including Maya Wiley and Scott Stringer, have called for an End to the 421-a Tax Abatement Program, which encourages Developers to Build Residential Buildings and make 25% of them Affordable. My Condo is under the 421-a that Reduces my Property Tax.
Developers say Ending the Abatement Program would Reduce the Number of Available Affordable Units by Cutting-Off the Financial Incentive the Real Estate industry has to create them.
New York City also has a Removes School Tax when you reach 65. There also is a Reduction of Propert Tax for Disabled Veterans.
For some Developers, strict Zoning Regulations are a Barrier to the Creation of Housing, Affordable or Not. In certain Pockets of the City, such as Manufacturing Zones, Residential Development is Prohibited.
“We applaud the Legislature for passing a bill to provide for the conversion of underutilized hotel and commercial office space to affordable housing,” said Jolie Milstein, Chief Executive of the New York State Association for Affordable Housing. “The next step is to overcome longstanding barriers to the creation of affordable housing—which include exclusionary zoning restrictions and building-code challenges.”
Cuomo, for whom Affordable Housing has been a High Priority, will review the Bill, spokesman Shams Tarek said.
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