Have you surveyed the housing scene and hotel industry performance in the United States? If yes, you will read about several hotels that are getting converted into low-cost apartments for the workforce population says Maxwell Drever. The process is taking place now and has also been happening before the pandemic.
As the pandemic adversely impacted the New York hotel industry in 2020, the developers, politicians, and homeless services group reached a rare decision. Currently, it’s a once-in-a-lifetime situation to transform the struggling and distressed hotels into low-cost accommodation spaces for the workforce population and the people who are homeless.
California also witnessed a similar situation at the time of the pandemic. Here, the government agencies have assisted in converting approximately 120 sites, most of which are hotels to 5,911 housing units. And most of these units are acting as a permanent housing space for the low-earning renters and the homeless population. Maxwell Drever says that this act often gets stirr from a philanthropic mindset. However, for some hotel owners, this act generates from arriving at a practical decision to put their broken and unused hotels into operation.
Is this process beneficial?
The process of hotel conversions will especially benefit the people who are searching for workforce housing. It is outline as housing for families who earn between 60% and 120% of the AMI. And this bracket usually has an occupation like firefighters, police officers, nurses, teachers, construction and others who often find it challenging to come across a house near to their place of work, so that there is a situation of rent overburden. The majority of the low-cost housing gets develop for families below 60% of the AMI.
When the hotel rooms get rebuilt into small accommodation units. Usually between 300 and 500 square feet, this part of the population will stay in affordable homes. The chances are that they will stay in places close to their work. Which will bring down the issue of long commute every day and bring down the traffic.
The hotel conversions are a cheaper option than the new construction
The pandemic has negatively impacted the hotel industry. And as an outcome of the hotel industry’s predicament. The developers are taking over the hotels and motels that are financially distress. To provide a cheap option for developing multi-family units from the start. The affordable rental development and workforce housing projects might be cost-prohibitive owing. To the increased land price, building codes, restrictive zoning and various other factors.
For example, developing a new multi-family development project in a metropolitan region can cost between $150,000 and $200,000 every unit. Compared to $60,000 and $70,000 every unit of the conversion. And this reduced conversion cost leads to the capacity to provide reasonable rents. To the families in these units once the project gets complete.
Maxwell Drever says that the mass conversion of hotels into affordable workforce housing units. Does carry hope to address and resolve the housing crisis to a great extent. And ultimately, it can help in the socio-economic development of an entire country.