HPD Announces Funding Secured to Convert Illegal Hotel to Single-Room Occupancy Units for Supportive Housing

235 West 107th Street will be converted to permanent supportive housing. The building was previously used as an illegal hotel. Image Credit: Google Maps.On March 29, 2023, the Department of Housing Preservation and Development announced that $38 million in financing has been secured to change an Upper West Side illegal transient hotel into permanent supportive housing. The property, known as the Morningside Inn and located at 235 West 107th Street, was previously operated as an illegal hotel by the owner. The building will now help provide permanent housing through single occupancy units to adults facing chronic homelessness.

The six-story building, built in 1912, will have its 84 current individual units reconfigured to have private bathrooms. The reallocation of space will create 68 units with private bathrooms; only half of the units had a private bathroom with the previous layout. Each floor will have communal kitchens and dining areas to be shared by six to seven residents. The first floor and cellar will have a community room and dedicated case management and social services spaces, which will be managed by Goddard Riverside. Improvements will be made to the passages to the building’s north and east courtyards, and the property will be made ADA compliant. 

Additional improvements include elevator modernization, facade repair, and new flooring. Energy efficiency upgrades include an all-electric variable refrigerant flow system for heating and cooling to replace the outdated boiler and steam pipe system. 

Fifty-four residents will receive supportive services and rental assistance through the 15/15 Supportive Housing Initiative, six will be available through the city’s housing lottery at 60 percent area median income, and eight units will serve existing long-term residents who will keep their deeply affordable rents. 

Financing included a $18.4 million capital subsidy from HPD’s Supportive Housing Loan Program, a $14 million construction loan from Chase, and $700,000 in Reso A funding from Manhattan Borough President Mark Levine and Council Member Gale Brewer. The project will also generate $13.6 million in equity through selling 9 percent Low-income Housing Tax Credits and will also receive a permanent loan from the NYCERS Pension Fund with SONYMA Insurance.  

The previous owner had received over $280,000 in fines for the illegal hotel dating back to 2012 from the Mayor’s Office of Special Enforcement. The building is legally zoned for permanent residential use. Rockabill Development and Goddard Riverside acquired the building in March 2021 to convert it to permanent supportive housing. The building will be renamed in honor of former Goddard Riverside Executive Director Stephan Russo, who advocated for and helped pioneer the supportive housing model. 

Construction is expected to begin next month. ConRock Construction is the General Contractor for the project. 

HPD Commissioner Adolfo Carrión, Jr. stated, “With our partners, Goddard and Rockabill, HPD is proud to get this illegal hotel back into productive use for those who need it the most. Our Supportive Housing Rehabilitation program ensures homes are affordable to low-income New Yorkers, on-site services are available to formerly homeless households, and buildings are rehabilitated to meet our high design standards for preservation. Thanks to our partners and our team here at HPD for making this transformative project possible.”

Christian Klossner, Executive Director of the Mayor’s Office of Special Enforcement, stated,  “Protecting the City’s housing stock has been the cornerstone of the Office of Special Enforcement’s work on illegal short-term rentals. We are pleased that years of inspections, dozens of violations, and nearly $280,000 in fines have resulted in this illegal hotel being sold to trusted partners who are restoring the building back to its lawful use housing New Yorkers.“

Roderick L. Jones, President of Goddard Riverside, stated, “Every day our outreach teams speak with people living on the street who say they’d come indoors if they could have their own room. We look forward to opening the Stephan Russo Residence to give those people a chance at a better and more dignified life. We believe the neighborhood will also benefit when more people are housed. We appreciate the support we’ve gotten from Upper West Siders and we look forward to being your neighbor on this project, along with our many existing programs around the UWS.”

By: Veronica Rose (Veronica is the CityLaw fellow and a New York Law School graduate, Class of 2018.)




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