Hotels around the city remain reliant on a profitable occupier outside of tourists and business travelers: the city itself.
Mayor Eric Adams’ administration quietly signed a $929 million contract extension with the hotel industry to occupy space for emergency shelters, the New York Post reported. The contract started at the beginning of the year and is set to run through next June. The contract was competitively bid, according to the mayor’s office.
The hefty dollar figure represents a maximum, not a guarantee.
There are roughly 86,000 homeless individuals and asylum seekers in the city today. It costs $352 per night to house someone in an emergency shelter, according to city officials.
The hotel rooms will be used by social services vendors, according to the Department of Homeless Services. The Hotel Association of New York City will match the city with hotels willing to set aside rooms for shelters in exchange for rent payments; the association collects a fee for administrative expenses.
Critics of the latest contract argue that it takes hotel units off the market, potentially increasing the costs for guests to rent a room in the city; last year, the average daily price for a hotel room in New York City reached an all-time high of $417. Additionally, treating the hotel industry as a sole source instead of making hotels bid against each other arguably affected the contract details.
Hotels became a source of emergency lodging during the pandemic as the city dealt with a surge of migrants. The city is required to provide emergency shelter to those in need as a result of the right-to-shelter policy.
Since 2022, the city has spent $3.12 billion on shelters and costs for housing migrants. At the peak of the migrant surge, 150 hotels housed migrants in tens of thousands of rooms across the Big Apple.
In recent months, however, prominent shelters have been closing, including the shelter at the famed Roosevelt Hotel in Midtown Manhattan, presenting an uncertain future for many of the properties and their owners.
— Holden Walter-Warner
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