In the efforts to provide a roof under the head of homeless and less fortunate New Yorkers, a new State senate bill aims to allow the State to purchase financially distressed hotels and office buildings and turn them into affordable housing.
The bill sponsored by Queens Democrat State Senator Michael Gianaris also targets to provide shelter for those feeling a dangerous situation. Gianaris told "The Wall Street Journal" that the bill will only be available to struggling commercial real estates that are up for sale due to economic woes.
"We have known for decades that there's a massive affordable housing crunch, so this is something that's been in need for forever," Senator Gianaris.
"What we're doing now is finding this huge stock of buildings that are in distressed condition right now, so it's a smart way to tackle multiple problems," he added.
Commercial Real Estate Limitations
Under the proposed bill, the companies would sell hotels and office buildings to the State, which will convert the properties to affordable apartments so the homeless and financially challenged people can have a place to call home.
The bill will only allow hotels with less than 150 rooms, which comprised many hotels in Manhattan.
Before the COVID-19 pandemic, New York City's commercial real estate business has been thriving over the year. Like any other state, the city's commercial district has been highly affected by the health crisis.
In Manhattan alone, the vacancy rate in commercial real estate increased to 13.3 percent during the third quarter of 2020. According to a report from real estate services firm Cushman & Wakefield, this number has been the highest vacancy rate recorded in the city in the past 24 years.
New York City Mayor Bill de Blasio and his administration have expressed support for Senator Gianaris' proposal.
Governor Cuomo's Similar Plan
The bill introduced last week was quite similar to New York Governor Andrew Cuomo's proposal to convert large workplace and hospitality properties into residential.
During his 11th State of the State address last January, Cuomo said that the health crisis could be an excellent opportunity for Manhattan's central business district to innovate and address the shortage in affordable housing.
Since the pandemic has put the tourism industry on hold and employees continue to work from home, most of the spaces were left empty to prevent further spreading the COVID-19.
"The housing problem in our cities has worsened. But the crisis of growing vacancies in our commercial property provides an opportunity. We should convert vacant commercial spaces into affordable, supportive housing, and we should do it now," Andrew Cuomo said.
According to the New York Post, Cuomo's office will create five years plan allowing midtown Manhattan landlords to convert their commercial spaces into residential properties. While Cuomo did not layout further details of the project, a spokesperson from his office said that the proposal's facts would be presented soon.
However, Senator Gianaris described Governor Cuomo's plan as "vague" and would only create market-rate or luxury housing.
