Internet Association Releases Study on the Effects of NYC Hotel Boom on Permanent Housing
HOOTON: “This report corrects the record surrounding housing costs and outlines the complexities of housing in New York, including the interplay of hotel growth and residential housing stock over the past six years.”
Washington, DC – The Internet Association today released a study detailing the interplay of hotel growth and residential housing stock in New York City over the past six years.
“This report corrects the record surrounding housing costs and outlines the complexities of housing in New York, including the interplay of hotel growth and residential housing stock over the past six years,” said Christopher Hooton, Chief Economist at the Internet Association. “Internet-enabled short-term rental platforms provide New Yorkers the ability to flexibly earn income when they need it. Sharing economy platforms enhance economic security for residents. It is essential that policymakers understand the complexities of housing prices and this report highlights some of the documented factors that go into housing supply in New York City.”
An unprecedented boom in hotels and hotel rooms has directly contributed to a loss of residential space, which represents a missed opportunity for increasing residential living area and units and increases demand and price pressures within the housing market.
Key findings of the report include:
- Rapid Hotel Growth: Hotel rooms increased by 34 percent from 2008-2014, far outpacing growth in residential units and population during the same period. This trend is set to continue, with the number of hotel rooms projected to increase by another 18 percent to approximately 120,000 active units by the end of 2016, and by 32 percent to 135,000 units by the year 2019. In 2014 and 2015 alone, the city brought on 61 new or renovated hotels, adding over 11,000 rooms to the total supply. And from January 2016 through the end of 2019, another 147 hotel projects are expected to come online.
- Hotels Taking Over Hundreds of Thousands Of Square Feet Of Residential Space: Hotel development between 2010-2016 has directly resulted in the loss of at least 750,000 square feet of preexisting residential space and 773 preexisting residential units. Of those units lost, over half (398, or 51 percent) were in buildings converted from a majority residential use to a majority hotel use in that period.
- Large Opportunity Cost of Hotel Construction: In addition to the loss of existing housing, new and expanded hotels took over building area that could have been used for permanent housing. If just half of the total new hotel space had been used for residential purposes, and 20% of that space was dedicated to affordable housing, more than 2.9 million square feet of market-rate housing and over 727,000 square feet of affordable housing could have been created.
In sum, the report highlights how hotels are, in some cases, eating up precious real estate while home sharing platforms are enabling New Yorkers to make ends meet and stay in their homes.
The study provides estimates for changes in New York City’s hotel and residential housing stock from 2010-2016 using the publicly available information from the city’s Primary Land Use Tax Lot Output (PLUTO) database.
To learn more about the hotel industry’s role in the New York City’s housing market, click here.