California’s ‘magic recipe’ for reducing homelessness

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“Do we want to end homelessness or not? “

TThe idea of ​​converting hotels and motels into lodgings is not new. But the pandemic – which has plunged hotel occupancy rates to 37% and interest rates to all-time low – has turned out to be an opportunity.

“The prices were really high when we looked at this four or five years ago for homeless veterans,” said Douglas Guthrie, president and CEO of the City of Los Angeles Housing Authority. “When Covid-19 hit, a lot of these homestead places had serious financial problems, so the prices went down and became much more reasonable. “

Many hotels were already in trouble before the pandemic hit, thanks to the rise of AirBnb. And the American Hotel and Lodging Association doesn’t expect the industry to recover from the pandemic until 2024.

The trend towards converting hotels is therefore booming. And it’s not just high-cost cities that are considering vacant hotels as a potential solution to the housing shortage: A community land trust has converted a Baymont Inn and Suites in Essex Junction, Vt., Into housing using the Federal coronavirus relief funds and hotels in such remote towns as Branson, Missouri, and Kissimmee, Fla., have been redeveloped into workforce housing with private funding.

“The economic drivers are there to keep this trend going – housing affordability, which drives up demand for rental housing, and housing shortage in general,” said Gay Cororaton, senior economist and research director at housing and commerce at NAR. , which released a report on converting vacant hotels to multi-family homes earlier this year.

These factors also continue to increase homelessness, including in California. The government’s annual tally to gauge the number of homeless people on any given night has been canceled this year due to the pandemic, so it’s unclear exactly how the crisis has affected homelessness rates.

But encampments have grown in major cities across California and nationwide, though it’s unclear how much this boils down to new visibility following CDC guidelines urging officials not to clean up settlements. during the pandemic.

Homekey boosters readily admit that the program was never going to solve the state’s homelessness problem:. “

Washington was sufficiently impressed with the approach to establish a new $ 5 billion homelessness program at HUD in the March Relief Program which includes money for “the purchase and development of” non-collective shelters ”.

Ross, who oversaw the Homekey project before being appointed to his current role overseeing California’s use of funding under the new HUD program, admitted that the economics of conversions could change in the future. – interest rates are already on the rise, many hotels will return to normal. occupation, the political emphasis on homelessness may fade – but said “we can really deploy these tools in different ways and still have very significant results.”

“Just because we’re not on the same pandemic and lockdown level as we were last year doesn’t mean we can’t be successful yet,” Ross added.

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