The hospitality sector in general and hotels, in particular, were negatively impacted by the spread of the Covid-19 pandemic. Hence, alternate use of this property helped transform them into rental properties because of the growing trend of an affordable housing crisis. The conversion provides the hotel with a chance to increase its revenues. It also solves the problem that is clasping millions of individuals.
These individuals from different professions like teaching, firefighting, trading, and postman services struggle to pay the rent. Moreover, housing estates in and around the work area are so high that they face hardship to rent them. It has forced them to move away from the city centers into the fringes of the urban sector.
The proactive role of hotel owners
As illustrated earlier, hotel conversions are underway because it is a beneficial task. It is adding to their profit, and they are earning well. On the other hand, it has come up as a solution for individuals from low-income groups making 60 and 120% of the median income. These individuals holding occupations of different sectors are having difficulty finding housing close to their service areas. Hence, new affordable housing projects got undertaken to solve the issue. Repurposing hotels and converting the same into small apartments is a challenging task, recounts Maxwell Drever. It is because hotel planning is very different from home planning. It helped individuals with reasonably priced units. A lot of planning and execution is required.
The problem of affordable housing has been an economic and social issue in recent times. If you look at reports, you will understand that millions of individuals are on the verge of eviction. It is because they are spending more than 30% of their income on house rent. Hence, they are cost-burdened.
The role of government
The pandemic-driven economic downturn has not only impacted travel and businesses but every sector of the economy. Going by hospitality analytics, the western economy has seen an increase in the demand for affordable housing, improving at a high rate. The public-private partnership is making headway and creating avenues to solve the issue.
Hence, Maxwell Drever reveals that it has given a spark to converting hotels into affordable housing estates in no time. The hotel industry was running at a loss and is now transforming their rooms by building a kitchen, bathroom, living area into a small unit to solve the issue.
On the other hand, governments all across the globe have come up with subsidies, incentives, and tax benefits for investors and real estate agents. They are providing tax benefits to these individuals who were involved in affordable housing projects. Hence, it has come up as a boost to the conversion process. These firms are taking the help of rules and regulations and using them to their advantage. It has made the smooth functioning of these projects possible. Therefore a proliferation of housing projects became mandatory. It can help different sections of society through various mechanisms.