Map sale

From an ‘illegal’ hotel to homeless housing on the Upper West Side

The lobby of the Manhattan building, once known as the Royal Park Hotel, still attracts tourists: a sign advertises cheap shuttle rides to nearby airports, and rows of brochures promote musicals by Broadway and attractions like the Guggenheim Museum.

But no one has checked in since the pandemic swept through New York and crushed its tourism industry. Instead, the seven-story building on the Upper West Side is being converted into permanent housing for the homeless – part of an urgent effort to ease the city’s severe housing crisis. .

The story of Royal Park is, in part, a story of how what was once an apartment building became a flashpoint in the city’s long-running fight against building owners who illegally rent out rooms to tourists instead of long-term residents.

But it also underscores a significant way the pandemic could remake the city by turning struggling hotels and vacant office buildings into housing.

The need is acute. Between 2000 and 2017, New York City created 643,000 new jobs but only authorized about 390,000 new homes, according to city figures, which has helped drive up housing costs and push more people into homelessness.

Efforts to find new ways to increase housing supply are taking place elsewhere. California, which is dealing with its own housing and homelessness crisis, has decided to convert dozens of hotels into thousands of units. However, similar efforts in New York City have lagged, largely because land use rules and other restrictions make buying and converting hotels complex and expensive.

Governor Kathy Hochul has offered to relax some rules, and Mayor Eric Adams has also called for an overhaul of the city’s building codes to speed up conversion projects he says could provide tens of thousands of new units. .

But if tourism rebounds, those efforts could be stifled.

“Right now we are being presented with a time-limited opportunity that we would not pass up,” said Brenda Rosen, president and CEO of Breaking Ground, a housing-focused nonprofit.

Between 1990 and 2004, the group converted three hotels near Times Square into housing, primarily for formerly homeless people; bureaucratic hurdles and expense have kept the number low, Ms. Rosen said. In 2018, the group purchased a fourth hotel near downtown Brooklyn, slated to open in the spring.

The transformation of Royal Park also reflects a feud between the city and illegal hotel operators, who officials say have worsened a chronic housing shortage by limiting rentals to short-term guests in violation of city laws and of State.

City officials have fought legal battles for years with Hank Freid, a hotelier who owns Royal Park on West 97th Street, arguing that many of his hotels and inns were intended as permanent lodgings.

Earlier this year, the Fortune Society purchased the building for $11 million. The non-profit organization is focused on helping formerly incarcerated people, who will be many of the building’s new tenants.

“It was an opportunity to buy a property that we could never afford,” said JoAnne Page, president and CEO of the Fortune Society.

Mr. Freid has not said publicly why he sold the building. He did not respond to requests for comment and his attorney, Ronald J. Rosenberg, declined to comment through a spokesperson.

Conversions may be easier where the buildings were already intended for permanent living quarters, as the Royal Park was. At Royal Park and at least one other illegal hotel, another seven-story building on the Upper West Side that is be converted in housing for low-income seniors, many bureaucratic obstacles have been eliminated.

A spokesman for the city’s buildings department said records from the 1910s, among the earliest immediately available, indicate that Royal Park was originally a building. It was later converted into more than 100 single-occupancy units, or SROs, which typically have shared bathrooms or kitchens.

ORS were once a large part of New York’s affordable housing stock, but many were systematically phased out between the 1950s and 1980s as city officials and the public increasingly associated them with poverty and to crime.

Many have been demolished and replaced with luxury homes, especially in affluent neighborhoods like the Upper West Side.

Mr Freid, who owns other hotels in New York and Florida and runs a yacht charter business, bought the building in 2004, according to city records, and marketed it as a budget hotel for visitors. A listing of the hotel on the TripAdvisor site features the Royal Park as being close to shops and bars and a short train ride from Midtown and downtown.

In 2017, the city filed a lawsuit, accusing Mr Freid of illegally operating the hotel when it was meant to be permanent accommodation. The lawsuit also cited several violations, including a lack of adequate lighting around exits, obstructed emergency exits, and too few emergency exits.

Mr. Freid has argued in legal documents that many of the violations have been dismissed or resolved and that the building’s classification does not preclude him from operating it as a hotel.

But he ultimately decided to sell the building to the Fortune Society.

After the sale was finalized, the city settled its lawsuit and Mr. Freid agreed to pay approximately $1.1 million in penalties, although he admitted no wrongdoing.

Ms Page said the building will open to new residents next year. Of the 82 units, 58 are expected to be occupied by people living in homeless shelters, and another nine apartments will be occupied through the city’s affordable housing lottery.

The rest of the units are reserved for a small number of tenants who have lived in the building for years, even decades.

The building, according to the Fortune Society, will provide on-site support services, such as case managers to help those struggling with nutrition, employment and addictions.

The total cost, including rehabilitation and operation, is around $31 million, which Ms Page said the nonprofit was working to raise. The city also had to contribute.

Mr. Adams said the conversion was the type of innovative strategy his administration would pursue to address the housing need.

“We need an urgent response to address the crisis, and we will explore every opportunity, in every corner of the city, to create the affordable housing New Yorkers need and deserve.” he said in a statement.

Housing advocates and some Upper West Side residents said the deal was needed in a neighborhood that has grown wealthier and increasingly white.

But some residents have expressed concern about plans for the building and its future tenants, echoing tensions that erupted in the neighborhood in 2020 when homeless men were temporarily moved to the Hotel Lucerne, around one mile south.

In a public comment at a community board meeting in February, a woman who said she owned a neighborhood business and was only identified by Kim said she and other small business owners were “upset and worried about what’s to come.” She noted that they already were. struggling with issues like vagrancy, begging and shoplifting, from a video of the meeting.

The chairman of the community council that covers most of the Upper West Side, Steven Brown, said he was impressed with the Fortune Society’s willingness to engage with residents, but added that the council does not only learned about the project in mid-February, when the Adams administration issued a press release.

“I think the community council would have liked to be involved along the way,” he said. “I’m not saying it would have changed anything.”

Arturo Coto, 70, has lived in construction since 1988, three years after immigrating to New York from Honduras. Before the pandemic, he said he enjoyed meeting hotel guests from around the world.

He didn’t worry about new tenants as long as he continued to have affordable housing, even though he still had to share a bathroom down the hall and live without a sink or stove.

The monthly rent is around $346 and he lives largely off what he receives from Social Security. (Ms Page said units like Mr Coto’s are rent-regulated and the rent will remain the same.)

“There is not enough housing for people living on the streets,” Mr. Coto said. “I want these people to have homes, but also to live here.”

Ana Ley contributed to the reporting, and Susan C. Beachy contributed to the research.