What's Happening?
A former JFK Hilton hotel in Queens is being converted into the Baisley Pond Park Residences, a 318-unit affordable housing complex for low-income and formerly homeless New Yorkers. This project, set to open
in October 2025, is a result of the 2021 Housing Our Neighbors with Dignity Act (HONDA), a state law designed to facilitate the conversion of hotels into housing. The $167 million conversion is partly funded by $48 million in state money from the $200 million allocated to HONDA. Despite initial high hopes during the pandemic when many hotels were empty, the Hilton project is one of the few successful conversions under HONDA. Challenges have included insufficient funding, shifting market forces in the hospitality industry, bureaucratic hurdles, union opposition, and outdated zoning laws. Mayor Eric Adams and Governor Kathy Hochul have championed the project, with Hochul recently including tax breaks for developers undertaking office conversions if 25% of units are affordable.
Why It's Important?
The limited success of the HONDA program highlights significant obstacles in addressing New York City's housing crisis through hotel conversions. While the Baisley Pond Park Residences will provide much-needed affordable housing and supportive services for vulnerable populations, the broader program has not met expectations. This indicates that despite legislative efforts and available funding, the complexities of real estate development, market dynamics, and regulatory frameworks continue to impede large-scale solutions. The situation also underscores the ongoing debate about the most effective strategies for creating affordable housing in high-cost urban areas, impacting housing advocates, developers, and policymakers. The artificial inflation of the hospitality industry due to migrant housing in hotels has also reduced the availability of properties for conversion, further complicating efforts.
What's Next?
Despite the slow progress, some stakeholders remain optimistic about future conversions. The New York State Homes and Community Renewal agency anticipates approving at least two more hotel conversions. Governor Hochul's new budget deal, which includes tax breaks for developers who convert office buildings into affordable housing, could incentivize more projects. However, the city's outdated zoning laws remain a significant barrier, and Mayor Adams' administration is working to change them. The eventual exit of migrants from hotels could also lead to more properties becoming available for conversion, especially if these hotels require substantial renovations. The success of Baisley Pond Park Residences is seen by some as a potential model that could encourage more developers to undertake similar projects once the initial hurdles are overcome.
Beyond the Headlines
The experience with the HONDA program reveals deeper systemic issues within urban development and housing policy. The initial vision of converting empty hotels into housing during the pandemic was a pragmatic response to dual crises: a struggling hospitality sector and a severe housing shortage. However, the implementation has exposed the intricate web of economic, political, and regulatory factors that govern urban change. The resistance from unions, the complexities of zoning, and the financial viability of such projects underscore the difficulty of rapid, large-scale urban transformation. This situation also raises questions about the role of government in real estate markets and the balance between market forces and social needs, highlighting the need for more comprehensive and adaptable policy frameworks to address complex urban challenges.
