Since January 2021, several proposals have been presented to the New York State Legislature to allow underutilized hotels and / or office buildings, many of which are in financial difficulty due to the COVID-19 pandemic, d ‘be converted to residential use and bypass local zoning. or building code requirements that would otherwise prevent such conversions. These proposals varied in terms of geographic applicability, affordability requirements, and private sector involvement. By the end of the legislative session, it now seems clear that only one of the proposals, the Our Neighbors with Dignity Housing Act, a funding mechanism that does not replace local zoning or code requirements. building, will probably be adopted.
The first proposal was presented by Governor Andrew M. Cuomo as part of the state budget. The governor’s proposal would have allowed residential conversions of hotels with less than 150 rooms and some office buildings in certain areas of New York City, subject to an agreement with the Division of Housing and Community Renewal (DHCR) to provide at least 25% of dwellings as affordable housing. The state budget was adopted without the governor’s proposal. The state budget, however, provided $ 100 million for DHCR to support the conversion of distressed commercial properties into permanent affordable housing through a new program (the Affordable Housing Program for Adaptive Reuse), but did not include no details on the new program. The second proposal, presented by Senator Brian Kavanagh, chairman of the Senate Committee on Housing, Construction and Community Development, would have amended the Multiple Housing Act (MDL) to facilitate occupancy of Class B hotels located less than 800 feet from a residential area. as a permanent residence for low to moderate income households. Like the governor’s proposal, it seems to have no future in this year’s legislative session.
The third proposal, the Housing Neighbors with Dignity Act, sponsored by Deputy Senate Majority Leader Michael Gianaris and co-sponsored by Senator Kavanagh, now looks likely to pass. It was passed by the state legislature on June 9, 2021 and was handed over to the governor for signature.
Our Neighbors with Dignity Housing Act (HONDA). HONDA would apply statewide and, if enacted, amend the Private Housing Finance Act to allow the Housing Trust Fund Corporation (HTFC), a public utility company operated by staff. of DHCR, to fund acquisition or conversion by qualifying non-profit organizations. organizations of hotels and commercial office buildings struggling to convert to supportive or affordable housing. The converted properties would be owned, operated and managed by qualifying non-profit organizations.
HONDA would require all housing to be stabilized and affordable for households with incomes between 50% and 80% of the region’s median income at the start of a resident’s lease, with 50% of housing reserved for homeless households immediately before moving into the converted buildings. In New York, properties converted in accordance with HONDA (other than properties that (i) have less than 120 residential units or (ii) have entered into a regulatory agreement with a federal, state or local government entity that requires (x) at least 50% of the residential units in this converted property are to be reserved for homeless people, people with disabilities or homeless families with a disabled head of household, (y) the provision of on-site support services and (z) residential units remaining to be rented out to households earning up to 80% of the region’s median income) would be required to pay their building service employees, including, but not limited to, caretakers, doormen, building cleaners , porters, handymen, janitors, gardeners, gardeners, elevator operators and window cleaners, at at least the applicable wage in force. In addition, for troubled New York City hotels where workers are represented by a union, the union leadership should be notified prior to a hotel acquisition and the original owner of the property should certify that the union has accepted the acquisition. HONDA states that the additional operating expenses for the converted properties would be covered by a combination of grants, bonds, commercial rents or other sources of income. Unlike Bill Kavanagh and the Governor’s Proposal, HONDA does not amend Section 301 of the MDL to override state and local laws. Instead, each unit should contain, at a minimum, a living / sleeping area, a private bathroom with a tub or shower, and either a full kitchen or kitchenette with at least a 24-inch refrigerator, sink. , a hob, a microwave. oven and outlets for countertop appliances. HONDA would be deemed effective from April 1, 2021 and would not automatically terminate.
If passed, HONDA may provide limited opportunities to increase the supply of affordable and supportive housing statewide. However, its effectiveness will necessarily be affected by the availability of public funding and securing the right mix of grants to support operating expenses. It is not known whether HONDA can provide immediate relief to the majority of office and hotel building owners affected by COVID-19, as it does not extend current residential conversion opportunities. Conversions under HONDA should comply with applicable zoning and housing codes, including being located in an area that allows residential use.
 See âGovernor’s Proposed Trade Conversion Initiativeâ.