A state lawmaker introduced legislation this week that would allow New York to buy financially distressed commercial buildings and convert them into housing for low-income and homeless New Yorkers. The Housing Our Neighbors with Dignity Act, sponsored by State Sen. Michael Gianaris, includes the purchase and conversion of office buildings and hotels that are up for sale, as the Wall Street Journal first reported. The proposed legislation comes as commercial districts and tourist hubs have yet to recover fully from the impact of the coronavirus and as the housing crisis, particularly in New York City, continues.
Gov. Andrew Cuomo proposed a similar idea during his State of the State address in January. According to the governor, the pandemic has reduced travel and increased remote work, leading to underutilized commercial space.
Cuomo’s plan involves proposed legislation that would create a “five-year period” during which property owners can convert office buildings and hotels in New York City for residential use, with affordable and supportive housing included.
“The housing problem in our cities has gotten worse. But, the crisis of growing vacancies in our commercial property provides an opportunity,” Cuomo said during his speech. “We should convert vacant commercial space to supportive and affordable housing and we should do it now.”
The bill introduced by Gianaris lays out specifics about the potential affordable housing and supportive housing that are lacking from Cuomo’s proposal. The legislation currently being considered by the Senate would create a program that allows the state to “purchase, acquire, restore, and hold distressed commercial real estate for the purposes of maintaining or increasing affordable housing in New York City for two years” after the bill’s enaction.
The properties will then be sold or transferred to organizations that would operate and manage the housing. According to the text of the bill, at least 50 percent of the converted properties will be set aside for those experiencing homelessness.
The affordable housing at the properties will be limited to households with income at or below 50 percent of the area median income for the county in which the property is located. Tenants would have full tenancy rights, with rents set at no more than 30 percent of their income.
“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,” Gianaris told the Journal.
The Real Estate Board of New York (REBNY) has advocated for a conversion program throughout the pandemic and came out in support of Cuomo’s proposal in January. REBNY senior vice president Paimaan Lodhi told Fast Company older buildings would be easier to convert to residential use, with about 150 million square feet of Class B and C office space available.
“If you were to just apply a conversion rate of 10% we think you could get something like 14,000 units built, and a pretty sizable portion of that could be affordable housing,” Lodhi told the website.
[Via Wall Street Journal]