One of the lingering issues that only got pronounced during the onset of social distancing due to COVID-19 was the shortage of workforce housing explains Maxwell Drever. The middle-income groups, such as frontline health workers, delivery boys, and others, live far from the main city because of unaffordable options. They don’t qualify for tax credits and government subsidies, as their income is higher for eligibility. On the other hand, the pandemic caused a massive blow to many hotels, hurting their revenue and hopes of a quick revival to an extent where they cannot take an immediate sigh of relief.
The lack of proper accommodation prevents the median income group from leading a quality life. At the same time, companies and the national economy suffer from vacant posts and diminishing wealth generation opportunities. But every challenge comes with better possibilities also. Nevertheless, one standard solution to most of the problems can be converting distressed or empty hotels into permanent affordable housing for the workforce. Even though immediate recovery is not possible for most hotels, they can transform into multi-family buildings to receive a stable and steady income.
Maxwell Drever says that hotel owners can leverage this scenario on the back of the rising demand for workforce housing to stop their losses. Before this, they can analyze their property to understand its footprint and infrastructure compatibility with the housing requirements. So here is a quick glimpse of the same.
Analysis of the demand and supply of the building in an area
To make the best use of your asset, you have to assess the macroeconomic condition of your property’s location. Employment, demographics, population, and income can be essential contributors. More precisely, you need to know regulations, community redevelopment prospects, cost, competitiveness, sector-based profit calculation, etc. For this, you will have to study multiple components.
You can check the demand and supply gap in the affordable workforce housing in your area to identify opportunities and use them. It will also arm you with the knowledge of product design, pricing, and absorption rates.
Your location of the property has to meet your vision about its future. It will also help you delve deep into government rules and regulations around zoning, rezoning, and others.
Almost all multi-family accommodation has to include a standard set of amenities. You have to compare them with your hotel to understand whether it can provide them. Some believe that old hotels of the 1960s-1980s featured large rooms. These can be the most viable candidates for conversions. They can have enough space for amenities. At the same time, a physical feasibility study can also help you examine the overall building condition, including electrical, lighting, fire system, and finishing, etc. As Maxwell Drever says from floor size to common area and building codes, everything will be part of the observation.
So, these represent the type of action you can take to set your expectations right. You can predict the financial cost of the project and returns based on its nature and demand. Do a thorough study or hire an experienced real estate investor for reliable guidance if you find this overwhelming.