On March 1 and March 2 KOB News 4 staff reporter Giuli Frendak reported on how the City of Albuquerque is moving forward with its plans to transform hotels and motels into housing units for low income housing. The plan is part of Mayor Tim Keller’s Housing First plan to address what he claims is a crisis in low income housing for the poor and near homeless. Following is the full Channel 4 report:
“The City of Albuquerque is asking local hotels and motels to play a role in one of its creative ideas to bring more housing units online quicker, and at a lower cost.
The city recently pushed out a request for information from any and all property owners who might be interested in selling. The city would then take the lead in renovating them into housing units.
“We’re just inviting property owners to submit some information to us about their property,” said Lisa Huval, deputy director of Housing in the Family and Community Services Department. “Things like number of rooms, what is the current zoning, are there kitchenettes, what is the condition of the property.”
The city is casting a wide net and won’t rule out any property size or location.
“I think for some folks maybe that property just isn’t producing the level of income it needs to be producing, maybe they’re interested in getting into a different line of business,” said Huval. “That could really be a range of properties across the city.”
The approach is just one piece of the city’s Housing Forward initiative it launched last fall.
“We know we have a housing crisis and part of solving the housing crisis is urgency,” said Huval. “We have to be able to bring more units online more quickly. This isn’t going to solve all of it, but this will help solve a chunk of it if we can do it well.”
Huval says communities in California, Texas, and Colorado have already used this model, and have proven conversion can be successful.
If you’re an owner considering selling your property, you can find the city’s request for information here.”
The link to the full news report is here:
KELLER’S “HOUSING FORWARD ABQ” PLAN
It was on November 10, 2022 that Mayor Tim Keller announced his “Housing Forward ABQ” plan to add 5,000 housing units to the existing housing supply by 2025. Keller called his plan “transformative” and it includes updates to Albuquerque’s Integrated Development Ordinance (IDO) to carry it out and motel conversion plan.
MOTEL CONVERSIONS
Mayor Keller’s “Housing Forward ABQ” places great emphasis on “motel conversions”. A zoning change already enacted by the city council in early 2022 year eased the process for city-funded motel conversions by allowing microwaves or hot plates to serve as a substitute for the standard requirement that every kitchen have a cooking stove or oven. “Motel conversions” includes affordable housing where the City’s Family & Community Services Department will acquire and renovate existing motels to develop low-income affordable housing options. Keller’s plan calls for hotel or motel conversions to house 1,000 people by 2025.
The Keller Administration proclaims that motel conversions are a critical strategy for addressing the city’s housing shortage. The city proclaims motels conversions are a simpler, lower-cost alternative to ground-up construction. It will require city social services to regularly assist residents. The homeless or the near homeless would be offered the housing likely on a first come first served basis and with rules and regulations they will have to agree to.
The existing layout of the motels makes it cost-prohibitive to renovate them into living units with full sized kitchens. An Integrated Development Ordinance amendment provides an exemption for affordable housing projects funded by the city, allowing kitchens to be small, without full-sized ovens and refrigerators. It will require city social services to regularly assist residents. The homeless or the near homeless would be offered the housing.
CITY BUYS “SURE STAY” HOTEL
One area of the city that has been targeted in particular by the Keller Administration for motel conversions is “Hotel Circle” in the North East Heights. The area is considered a “high crime” volume area because of the thousands of APD calls for service to deal with crime at the motels. Located in the area are not only a number of motels but it is also the largest shopping area in SE and NE Albuquerque near I-40. The businesses in the area include Target, Office Depot, Best Buy, Home Store, PetCo and the Mattress Store and restaurants such as Sadies, the Owl Café, and Applebee’s and other businesses.
On February 11 it was reported that the City of Albuquerque has executed a purchase agreement for the purchase of the Sure Stay hotel located at 10330 Hotel NE for $5.7 million to convert the 104-room hotel into 100 efficiency units. The $5.7 million purchase price for the 104-unit complex translates into $53,807.69 per unit ($5.7 Million ÷ 104 = $53,807.69 per unit). At a December 6, 2022 meeting on motel conversions, city officials said that the city’s estimated cost is $100,000 per unit to fix up or remodel existing motels.
Therefore, using the city’s own estimated remodeling costs for the Sure Stay Motel, an additional $10 Million will be needed to remodel the motel for low income housing. ($100,000 per unit X 100 efficiency apartments = $10 Million). Therefore, the entire Sure Stay conversion project will have an estimated cost of $15,700,000. ($5.7 purchase cost + $10 Million remodeling cost = $15,700,000)
The City Department of Family & Community Services purchased the Sure Stay Hotel by using Housing and Urban Development (HUD) funding of $3,059,662.12 in Community Development Block Grant and available funding from the city’s Public Facilities monies and from Foreclosure Prevention monies for a total property purchase of $5.7 million. The Department of Family and Community Services submitted a request to the HUD Albuquerque Field Office for the release of CARES and HOME American Rescue Plan funding to be used to purchase Sure Stay Hotel and the renovation project for the permanent housing with supportive services.
City officials said the purchase should close this spring and said the project’s total cost, including necessary renovations of the Sure Stay hotel will not be known until later this year as the city still must put the work out to bid. The goal is to have the housing open within a year. City officials have said funding is available for at least one additional motel purchase and is asking the New Mexico Legislature for funding.
CITY’S MOTEL CONVERSION PLAN EXPLAINED
It was On December 6, 2022, the City’s Family and Community Services Department and the Planning Department held a public meeting at the Albuquerque Convention Center to discuss the Keller Administration’s motel conversions plans. In attendance to present the program were Family Community Service Director Carol Pierce, Deputy Director Lisa Huval and Planning Department Officials. Notably absent from the meeting was Mayor Tim Keller with no explanation given. Not a single Albuquerque City Councilor attended the presentation.
The City presented a short “power point” slide to the audience entitled “THE PATH FORWARD”. The power point said in part that there are “several possible paths all of which the Department of Family and community services is exploring” to deal with the housing shortage.
Those options listed in the power point were:
“The city can acquire motels, contract with a contractor/architect to complete renovations and then identify an entity to own and operate the facility through a Request for Proposal (RFP), which is the city bidding process.
The city can acquire motels and then identify and entity to rehabilitate, own and operate through an RFP process. The RFP would include funding to rehab the motel.
The city can use an RFP to select one or more entities to acquire, rehab, own and operate a motel.
Currently, [the] City has funding available to complete at least two motel conversions.”
City officials with the Planning Department and the Family and Community Services Department said that the city’s estimated cost will be $100,000 per unit to fix up or remodel existing motels. The estimated cost per unit is ostensibly determined by the total cost of the remodeling and design plans to repurpose and entire structure or motel complex and bring it up to city construction codes (electrical, plumbing, and water and sewers codes) and complete clean up and remediation preparation of the structure and property. The total number of units is then divided into the total cost of the remodeling and repurposing of the structure itself.
City officials identified the “qualifying incomes” of the population that would be served by the motel conversions in terms of income levels. Those qualifying income levels listed were “Supplemental Social Security Income” recipients, “Social Security Disability” recipients, “Warehouse Workers”, “In Home Care” workers and “Tipped Workers”. The power point noted that the fair market value for an efficiency apartment in Albuquerque is approximately $666 per month.
According to the power point, the monthly cost of $666 is “naturally affordable for single adults who earn $27, 000 a year” which is 50% of the city’s Median Income level. It was noted that some of the units will be for subsidized or for affordable housing for those making $16,000 a year which is 30% of the city’s Median Income.
COMMENTARY AND ANALYSIS
One big take away from the City’s plans for motel conversions is that they are not intended to be used as “homeless shelters” such as the new Gateway Homeless Shelter on Gibson, but there is no guarantee that will not happen. The intent is that those who will be housed in them must have some sort of income, either through social security or other government assistance or be gainfully employed, and they must pay rent. The city has yet to publicly identify the screening criteria that will be utilized for occupants and the minimum income levels.
The second and most serious takeaway from the city’s plans for motel conversions is that the city’s estimated cost of $100,000 per unit to fix up or remodel existing motels is likely a huge waste of taxpayer money and financing. Mayor Keller and the city’s announced goal is to purchase enough motels and add 1,000 units to be made available by 2025. If the city in fact spends $100,000 per unit to fix up or remodel 1,000 units as it has stated, the estimated cost for the planned 1,000 units will be $100,000,000 not including purchase price of the motels.
Mayor Tim Keller at one of his telephone “town hall” meetings a few weeks ago announced that he wanted to purchase all the “derelict motels” on Central and convert them into low-income housing. It was a statement that took many of the public off guard and a reflection of his sure ignorance.
There are upwards of 150 motels along Central from the West side all the way to the Eastside of Albuquerque to Tijeras Canyon. Central is in fact historic Route 66. Many of those motels were constructed decades ago when Central was part of Route 66. Simply put, many times it is cheaper and makes more sense to demolish and rebuild.
Approximately 15 years ago, the city’s Safe City Strike Force took civil code enforcement action against a number of the 150 motels up and down central with many ordered shut down. The motel owners were ordered to bring their properties into code compliance that usually cost thousands before they were allowed to reopen.
The Safe City Strike Force was responsible for the demolition of at least seven (7) blighted motels that were beyond repair. Those motels were demolished because it was cheaper and made more sense to tear them down rather than spends hundreds to remodel. The Central motels that the Safe City Strike Force took action against include the Gaslight (demolished), The Zia Motel (demolished), The Royal Inn (demolished), Route 66 (demolished), the Aztec Motel (demolished), the Hacienda, Cibola Court, Super-8 (renovated by owner), the Travel Inn (renovated by owner), Nob Hill Motel (renovated by owner), the Premier Motel (renovated by owner) the De Anza (purchased by City for historical significance), the No Name, the Canyon Road (demolished), Hill Top Lodge, American Inn (demolished), the El Vado (purchased by City for historical significance), the Interstate Inn (demolished).
Simply put, Mayor Keller’s “motel conversion” plan is severely lacking on many levels. There has been a total lack of transparency by the city with the public and it has been very sketchy and short on details as to what motels have been targeted, the projected overall funding for the program, no details as to the private-public partnerships and no identifying those in the real estate and development community and the construction industry the Keller administration is working with.
The city is spending between $60 million and upwards of $100 million a year on affordable and supportive housing. Over the last two years, Keller has increased funding to the Family Community Services Department for assistance to the homeless with $35,145,851 million spent in fiscal year 2021 and $59,498,915 million being spent in fiscal 2022 with the city adopting a “housing first” policy. In 2021, the City spent $20.7 million for affordable and supportive housing. In the 2022-2023 budget, the City spent $42,598,361 total for affordable housing and community contracts with a major emphasis on permanent housing for chronically homeless. It is $24,353,064 more than the 2021-2022 fiscal year.
The biggest unanswered question is does the city have any business whatsoever going into the “hotel conversion” business and begin operating such facilities in addition to what it is already being spent? It is not at all likely that the city has a realistic plan in place to achieve its goal of 1,000-units relying on motel conversions.
What is down right troubling is that the City Council has been derelict in its oversight of Mayor Keller when it comes to his motel conversion plans and appears to be 100% on board with it. The Albuquerque City Council is essentially giving Keller a blank check to run around town with a smile on his face and a grin in his voice to buy all the derelict motels he wants along Central.