Some people would say that converting foreclosed, vacant, or damaged commercial properties into something else has always been a way to set them free from their neglected state while serving something more meaningful through their renewed form says Maxwell Drever. Although it is indubitable, one cannot deny that this concept is becoming slightly more relevant recently for three reasons. As a starter, affordable housing has become particularly important in urban regions and city centers where rents continue to go up while earnings don’t improve; this trend is even more drastic in some states than elsewhere in the country. Then, the risk of homelessness is a painful crisis that everyone is currently facing nationwide.
Another thing is the debilitating effect of the Coronavirus epidemic on the hospitality industry that suffered significant drops in booking and saw many small and large players bid farewell to this business. Meanwhile, some American states reported that one affordable housing unit takes about USD 500,000 on average to build when there is a need to have thousands of such accommodations. The estimated cost and the current design and delivery approach make things seem impossible.
However, Maxwell Drever stressed that the solution to all the problems is in this situation only – distressed or rundown hotels that are literally out of revenue. Hotels resemble housing units, and with all the basic amenities in place, they can efficiently reduce development expenses and ensure faster delivery. But one has to evaluate it well to understand its feasibility. Here is a quick glimpse of some critical factors.
Hotel codes tend to be stricter than apartment codes. Because they have to ensure an additional level of safety and security for their guests. Who may stay put for about 30 days or less. One doesn’t have to take pressure with the building’s construction type, area, and height as these can stay the same. Since the occupancy load will also be almost similar, you may not have to worry about exits. But if it is a considerably old structure, checking for fire safety measures becomes crucial.
When it comes to using land, one has to follow the zoning ordinance that directs the development of a property in a specific manner, informs Maxwell Drever. Because of the housing crisis, many norms have become flexible to incentivize developers. You can think about the parking lot and density, for instance. Furthermore, hotel rooms tend to be smaller than what you find in multifamily accommodation. So, you may have to combine two or three rooms to make them compliant.
Affordable workforce housing allows people to keep their rent cost to less than 30% of their monthly income. Because these primarily serve families and individuals with 60% or less annual income. A suitable unit will come with onsite amenities, decent parking facilities, or at least one car parking space against each. Since the requirements are so specific, it is understandable that zoning and building codes are just among the many things. That deserve close attention and scrutiny before taking a plunge into this.