NYC’s hotels need homeless people to stay in business
Don’t look now, but more homeless people are coming to a nice hotel near you.
The Post reported on Thursday that the city now pays to put up a mind-boggling 11,000 homeless people in hotels — nearly one in six of the roughly 61,000 previously in shelters — costing taxpayers an average $222 a night compared with $150 a night in shelters.
The Big Apple’s hotels are making less money than they were a few years ago, and owners are scrambling for bucks as they see the value of their properties tumble. The recent creation of tens of thousands of new rooms, as well as competition from Airbnb, has driven down room rates and the city’s hotel market is “performing like mushy apple sauce,” says industry journal Hotel Management.
Mayor de Blasio, ever eager to throw Band-Aids at serious crises, offered to fill empty rooms with homeless people, taking large bunches of rooms, or even entire hotels, off owners’ hands, sometimes for more than they’d make from regular guests. And hoteliers are more than willing to play along. Their business, after all, depends on it.
The reasons are simple. The number of hotel rooms in NYC has soared astronomically from 76,400 in 2008 to 115,000 today — the biggest surge in nearly a century. Nearly 19,000 more are coming within three years. With so much competition, not even a record-high 61 million visitors to town each year can keep every hotel profitable.
Room rates of up to $1,000 a night at a few super-luxury hotel penthouses belie the wider, bottom-line reality. Most rooms often go for well under posted “rack rates.” As a result, owners’ returns on available rooms have fallen each year since 2014. Friends of mine from out of town who feared $500 nightly rates for closet-size accommodations were delighted on recent visits when they scored spacious rooms at well-located inns such as the Park Central on Seventh Avenue at 55th Street and the DoubleTree by Hilton at Lexington Avenue at 50th Street for barely over $200 including tax and fees.
Why the hotel-room explosion? The city’s thriving economy and low crime levels drew more business and leisure travelers. Zoning changes that began under former Mayor Michael Bloomberg allowed hotel construction in neighborhoods once reserved for manufacturing.
De Blasio’s temporary fix does the truly needy little or no good
New hotels are usually cheaper to build than office towers and luxury condo buildings. Many new projects were started several years ago by developers unable to see that a hotel boom could, like any other real-estate cycle, turn to bust.
Over-building has pushed down not only room rates but hotels’ underlying value. The high-profile, High Line-straddling Standard Hotel, widely perceived as a smashing success when it opened in 2009, sold last year for just $323.2 million — far below the $400 million it would have fetched in 2014 had the deal not fallen through.
De Blasio’s temporary fix does the truly needy little or no good. It puts them in neighborhoods where they can’t afford to buy basic necessities. And even the bleeding-heart New York Times reported on Jan. 4 that prostitution, drug use and violence “occurred at dozens of hotels” that were turned into shelters by the Department of Homeless Services last year.
No one should expect any better on housing matters from the mayor, who promised “progressive” remedies to aid the city’s poor but has treated them with utter contempt.
City Hall has failed abysmally to create “supportive” housing for the homeless. As The Post reported in September, a mere 48 new units have been completed nearly two years after de Blasio promised 15,000.
The city’s total homeless count has mushroomed to about 77,000, including those in shelters and on the street — a 13 percent jump since de Blasio took office, according to HUD figures.
On de Blasio’s watch, thousands of public-housing residents are freezing without working boilers. He incomprehensibly refuses to fire the head of NYCHA, who testified to the City Council that lead-paint inspections had been properly conducted when they hadn’t.
Meanwhile, the homeless colonization of hotels marches on. The dumping sites include proud older properties such as the Wellington, the New Yorker and Row NYC (formerly known as the Milford Plaza); new “boutique” ones like BKLYN House in Bushwick; and respectably-branded ones including Holiday Inn, DoubleTree and Best Western.
At this rate, Eloise might have more company at The Plaza than she bargained for.