The pandemic outbreak has adversely impacted the hotel industry. And after receiving such a hard hit, today, the hotel industry might be witnessing a silver lining. However, several hotel owners today are assessing their business and trying to make the best use of their assets. And while assessing the choices, two prominent scopes came up for the hoteliers, that made sense in this pandemic phase.
- Converting the hotels into affordable workforce housing and leveraging fresh finances through federal programs and housing initiatives is declared in the recent budget.
- Converting the hotels into market rental apartments for capitalizing on the huge demand.
Maxwell Drever says that for the owners who are presently thinking of strategies to use their hotel, the suggestions and points in this article might assist them to decide whether this conversion holds a promising future.
The process of converting hotels into low-cost housing units
As people carry on with the new-normal way of life, the pent-up demand for lodging and travel is anticipated to give a boost to the hotel domain. Simultaneously, the value of hotels is at a low because the housing expenses are increasing all across the United States. And that has resulted in the rising demand for affordable workforce housing.
Going by the statistics, in 2018, one member of about 283,800 Canadian households made it to the affordable housing waiting list. Hence, several governments came up with programs to respond to this housing crisis. The IAH initiative (Investment in Affordable Housing) matched funds with the territories and provinces for enhancing affordable housing access. Even the territories and provinces provide extra programs.
And in the current Federal Budget, the Canadian government proposed to offer an extra $1.5B to the RHI (Rapid Housing Initiative) apart from the $1 billion that was given last year. Also, this fund is accessible to the NGOs and municipalities for developing modular housing or converting the current assets such as hotels into affordable housing units.
It also declared the provision of an extra $300m for converting the commercial property into low-cost workforce housing via the Rental Construction Financing Initiative. Even then, the municipalities find it challenging to develop this housing cost-effectively.
An important initiative that can help
Converting strategically located hotels, mainly in the urban areas, can provide the best solution for the housing crisis. Sometime back, Toronto had signed several contracts with multiple hotels where several rooms will get transformed into homes for the homeless. Today, investigations are on concerning whether these properties are best for conversion and whether they can resolve the existing housing crisis.
That is not all! Maxwell Drever says that even hoteliers have realized that the problem of homelessness needs to get addressed to ensure a home for most people who belong to the workforce population. And with that sensitivity, they have come forward to make the best possible use of their properties that is otherwise idle because of the harsh impact of the pandemic
