A trend growing in popularity around the country is converting motels and hotels into affordable housing.
When Greenville County officials condemned the Economy Inn in January, 80 people who considered the motel their home found themselves without shelter.
The Greenville Homeless Alliance stepped in and helped, beginning with arrangement of living quarters.
Leaders of the organization that works to increase options for homeless people in Greenville County say a lack of affordable-housing options is one reason people live in motels. Additionally, if someone has poor credit or a criminal background, it can be difficult to be approved for a lease on an apartment.
But motels can be relatively expensive and sometimes have poor living conditions amid higher rates of crime.
An alternative growing in popularity around the country is converting motels and hotels into affordable housing.
Roof Above, a homeless service provider in Charlotte, North Carolina, is in the process of doing just that.
The organization bought a former Quality Inn in Charlotte at the end of 2020 with all the furnishings and was able to use it immediately as an emergency shelter for women and children during the cold months of winter.
As temperatures have warmed, the hotel is no longer being operated as emergency shelter and is now under construction to be converted into permanent affordable housing that’s expected to open in December, according to Liz Clasen-Kelly, Roof Above’s CEO.
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The hotel has 88 rooms on 2.6 acres of land and sold for $5.45 million. It was built in the 1980s and was renovated in 2017.
The cost of the hotel, renovation of the rooms and creating a wing for additional support services will cost $12 million in all, with $2 million coming from the city of Charlotte and the remainder from private philanthropy.
“In terms of how much motels like this cost — that varies widely,” Clasen-Kelly wrote in an email. “The way these assets are appraised typically depends on their revenue stream, but if you are purchasing to convert to housing, that changes the appraisal.”
Texas, Colorado and California are converting motels, too
Charlotte isn’t the only city attempting a motel conversion like this. In January 2021, the city council of Austin, Texas, voted to purchase a hotel for $6.7 million to use as transitional housing for the homeless. The money came from the city’s police budget.
Read more: Austin is buying a hotel to house the homeless. The money is coming from the police budget
Housing officials say this is a trend in states like Colorado, California and Minnesota as well.
“It is not a brand-new concept,” said Donald Whitehead, president of the National Homeless Coalition. “I think what’s brand new is the scale that it is being done.”
It’s possible to happen in Greenville. To further incentivize developers to invest in affordable housing, City Council approved a zoning change in November allowing for hotels and motels to be repurposed into affordable housing. The change allows hotels and motels in commercial districts to convert into long-term residential use if a percentage of the units are geared toward people making at or below 80% of the area median income.
Greenville’s area median income is $56,609, according to U.S. Census data.
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The ordinance cites affordable housing as “the essential foundation upon which to build a more sustainable future for the city of Greenville.”
Greenville City Council member Lillian Brock Fleming sees the zoning change as one tool among a range of options to create more affordable housing in Greenville.
While the council has not explored whether any hotel inside city limits has low enough occupancy to make conversion feasible, Fleming said she believes there are more options outside city limits in the county.
At its last meeting, County Council approved $10 million to go toward affordable housing over the next two years. A plan breaking down where the money will go is to be announced in the coming weeks.
“Five years ago, I wouldn’t bet 50 cents that County Council would vote unanimously to something like this,” County Councilman Ennis Fant said.
There are two reasons county government isn’t likely to be interested in purchasing a motel and converting it to affordable housing, Fant said.
One, county officials would consider converting a hotel or motel to be a big undertaking that they would rather leave to private and philanthropic communities, Fant said.
And two, Fant is already working on a redevelopment plan for the Gantt area, where the Economy Inn was condemned and a number of other motels that Fant has described as problematic are located.
Fant said he is working with the county Planning Commission to foster commercial and residential development in the area, including low-income housing for those with criminal records or bad credit who have trouble renting elsewhere.
Read more: Greenville’s leaders still working to define what ‘affordable housing’ means
The Greenville Housing Fund, a nonprofit organization that works with both the city and county to provide affordable housing, has not shown interest in purchasing a hotel to this point.
“I think the question is going to be, when they sell, can the new owner actually comply with the (affordability) requirement,” said Bryan Brown, CEO and president of the Greenville Housing Fund. “That’s the question I have, because the affordability requirements, they do reduce your revenue. And if a buyer overpays for this project for this property, I think it’s going to be tough.”
To make a project serving those residents worthwhile to the developers who’d build it, extra subsidy would be needed to make up for what tenants don’t pay in rent, Brown said. And the subsidy that’s available is limited.
Susan McLarty, the Greenville Homeless Alliance’s coordinator, said the Homeless Alliance is interested in converting a motel into housing. The question is where the money would come from.
Homeless shelters often break up families if they have rooms with bunk beds or if the shelters are designated specifically for men or women. Hotel rooms set up for a shelter or transitional housing could be a way to keep homeless families together where people could bring as many belongings as they need to and even a pet.
“I think that’s something Greenville could consider,” McLarty said.
‘We bought a hotel’: Location was especially attractive in Charlotte
Clasen-Kelly with Roof Above in Charlotte presented her organization’s undertaking to the Greenville Homeless Alliance at a meeting in April.
“We bought a hotel,” Clasen-Kelly said. “This is a neighborhood that’s been a lower-income neighborhood, but it’s becoming very trendy.”
The hotel is located in Charlotte’s Lower South End, informally abbreviated by many to “LoSo.”
Other neighborhoods with catchy acronym nicknames have been in the process of gentrifying, like NoDa across town in Charlotte, short for North Davidson, and RiNo in Denver, Colorado, short for the River North Art District.
The LoSo location for Roof Above’s new project was important, Clasen-Kelly said.
“Young professionals are coming and moving in. But there’s traditionally been a lot of affordable housing there,” Clasen-Kelly said. “Not only was it centrally located, it’s walking distance to light rail, but we also know this is a neighborhood that’s going to be deeply impacted by gentrification. There’s something powerful about being able to put a footprint there.”
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The Quality Inn had low occupancy, so the owner was interested in working in partnership with Roof Above to make Clasen-Kelly’s dream a reality, she said.
Roof Above has done something similar before.
The organization built Moore Place, affordable housing created specifically for those experiencing chronic homelessness. The apartment complex offers on-site case management and medical care for its residents.
Roof Above seeks to do the same at the Quality Inn, where it will provide 88 new units for those in Charlotte who need housing most.
The Greenville Homeless Alliance is interested in something similar, but the biggest challenge will be finding funding.
The organization is a coalition made up of 75 partner organizations and more than 1,000 individuals who donate and volunteer. For the Greenville Homeless Alliance to purchase a motel, it would take a capital campaign composed of donations from the many philanthropic organizations and government agencies that partner with the group.
Genna Contino covers affordable housing and gentrification for The Greenville News. Contact Genna at email@example.com or on Twitter @GennaContino. Subscribe to The Greenville News at greenvillenews.com/subscribe.