Creating Affordable Housing from Old Motels

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One of the most serious problems for Americans today is the issue of affordable housing. In markets like Los Angeles, Boston, and New York, housing costs present a serious challenge to young professionals and growing families. Cities like San Francisco and LA have seen incredible increases in homelessness related to this problem.

One possible solution is turning old motels into affordable housing. This idea has gained traction in some Southwestern states, particularly New Mexico. Older motor court style motels were popular during the mid-20th Century. During that time, many families took road trip type vacations. Today, many families prefer to fly. Instead of holidaying in the US, they may prefer to go overseas where the exchange rate makes it possible to stay in a more luxurious setting for the same amount of money.

Because of these changes to the marketplace, there are many old motels that are going unused and uncared-for. This is especially true in the Los Angeles area. Many of these hotels are already housing people who are basically homeless. They have to boot them out before 30 days, however, so they don’t achieve tenant status and the protections that come with it.

Converting hotels to low-income housing does have some challenges. Without room dividers, single people and couples are the most suitable tenants. Many of these 1950s-era establishments also require upgrades to the showers and ventilation systems to meet more modern standards.

In downtown Los Angeles, some of the hotels being rehabbed are even older, dating to the 1920s. That means that not every room has its own toilet and bath. Residents must share facilities. This can be a tough sell, both to potential tenants and housing advocates. Modern housing standards typically call for windows, two exits, and a reliable water source in each dwelling.

However, even older hotels in DTLA have been successfully renovated as apartments. These include the St George. and New Mexico’s old roadside Route 66 motels. They have been an important addition to the housing stock there. Locations like the Studios at Hotel Berry have helped revitalize the neighborhood. Best of all, local taxpayers are not overly burdened by these projects. Federal money in the form of low-income housing tax credits is available for these renovations.

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Written by

Ephraim Vashovsky is President of Vasco Ventures, one of New York City's leading real estate investment firms |

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