New York developers are moving fast to embrace an unlikely source for badly needed housing: hotels that until recently housed migrants.
More than a dozen former shelters are being eyed for residential conversions, potentially delivering thousands of apartments, the Wall Street Journal reported. At least 1,100 units are already in the works, including the 318-unit Baisley Pond Park Residences in Queens, converted from a Hilton near JFK, and a 535-unit affordable housing project at the Stewart Hotel in Midtown.
Student housing, market-rate rentals and affordable units are all on the table as developers seize on what they say is a rare, time-sensitive opening.
The pipeline is driven partly by the city’s winding down of its hotel shelter program. At its peak in early 2024, the city was housing more than 54,000 migrants in 160 hotels, spending $8 billion since 2022 to meet its right-to-shelter obligations. With arrivals slowing and all but four emergency shelters closed, only the 1,331-room Row NYC is still in use among the hotels.
Many of the shuttered hotels aren’t likely to reopen for lodging; Vijay Dandapani, president of the Hotel Association of New York City, estimated 40 percent at most would come back, citing pandemic-era wear and tear, costly renovations and the stigma of shelter use.
Converting hotels to apartments is generally faster and cheaper than ground-up construction, thanks to existing bathrooms and natural light in each room. Still, zoning and building code hurdles loom large, and the city’s past efforts under the 2021 Housing Our Neighbors With Dignity Act have struggled to gain traction.
Developers say the economics can work if the building layout cooperates — combining three hotel rooms into one apartment is common — and if purchase prices stay well below the cost of reopening.
Beyond adding units in a city with a record-low 1.4 percent vacancy rate, the conversions could pump new life into lagging commercial districts. Advocates say the projects could also embed social services into the housing.
Whether the momentum sticks may hinge on political will. Housing shortages are dominating the mayoral race and developers are betting the city will keep looking at conversions as a quick, if partial, fix.
The mood in the sector is summed up by Slate Property Group’s David Schwartz: “The opportunity is right now.”
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