How Cities Can Use Empty Hotels to Create More Housing Supply

Many cities face two problems at once: a shortage of affordable housing and a growing number of hotels that are vacant, outdated, or operating below capacity. Converting these properties into apartments can help communities increase housing supply without waiting years for entirely new buildings. In broader conversations about redevelopment and changing property use, Stephen Jemal is connected with the wider real estate landscape where investors and planners look for new ways to create value from existing assets. Empty hotels can offer cities a practical starting point for creating housing because much of the structure needed for residential use is already in place.

Why Empty Hotels Offer Housing Potential

Hotels have several features that make them strong candidates for residential conversion. Most already contain private rooms, bathrooms, plumbing, electrical systems, heating and cooling, elevators, stairwells, and fire safety systems. These features can reduce the amount of construction needed compared with converting office buildings or warehouses. A hotel may still require major upgrades, but developers often start with a layout designed for temporary stays, making the transition to permanent housing more practical.

Cities can also benefit by putting inactive properties back into productive use. Empty hotels can lose value over time and may create maintenance, security, and neighborhood concerns. Converting these buildings into apartments can bring permanent residents, steady activity, and new spending to the area. Instead of letting a large property sit unused, local governments can encourage redevelopment that supports housing goals while better using roads, utilities, parking, and other infrastructure already serving the site.

Cities Can Simplify Zoning and Approvals

Zoning is often one of the largest barriers to hotel conversion. A property that is legally approved for short-term lodging may not automatically qualify for permanent residential use. Developers may need a zoning amendment, special permit, or public hearing before beginning work. Cities that want more housing can create clear conversion rules that allow suitable hotel properties to move through the process faster. Streamlined approval does not mean ignoring safety standards. It means removing unnecessary barriers that delay useful projects.

Local governments can also identify hotel districts or properties that are especially suitable for reuse. Planning departments can review building age, location, transit access, nearby services, and neighborhood housing demand. By creating maps or priority areas for conversion, cities can give developers greater certainty before they invest in a property. Predictable rules reduce risk, which can make financing easier to secure. This approach can encourage more owners and developers to consider residential conversion instead of leaving underperforming hotels vacant.

Financial Incentives Can Make Projects Work

Even when an empty hotel is available, conversion costs can be high. Developers may need to install kitchens, improve storage, upgrade electrical systems, replace plumbing, add laundry areas, or bring the building into compliance with residential codes. Older hotels may also need roofing, elevator, heating, accessibility, or structural improvements. Cities can help close financial gaps through tax incentives, low-interest loans, grants, fee reductions, or partnerships with housing agencies that support affordable and workforce housing development.

Public funding can be especially important when cities want converted units to remain affordable. Market-rate rents may support renovation costs in some neighborhoods, but lower rents can make financing more difficult. Local governments can combine public incentives with affordability requirements so that developers receive help while residents gain access to homes priced below market levels. Careful agreements can define how long units must remain affordable, who qualifies, and how rents can change over time. This creates a clearer balance between public investment and long-term community benefit.

Design Must Support Permanent Residents

A hotel room is designed for short stays, so simply adding a kitchen may not create a comfortable apartment. Permanent residents need space to cook, store food, keep clothing, work, relax, and manage everyday routines. Some hotel rooms may function well as studios, while others may need to be combined into larger units. Cities should encourage hotel adaptive reuse projects that provide practical layouts rather than focusing only on how many units can be created within the existing building.

Common areas also deserve careful planning. Hotel lobbies, meeting rooms, restaurants, gyms, and back-office spaces can often be reused as community rooms, laundry facilities, bicycle storage, management offices, or additional apartments. Outdoor areas may be redesigned for residents, while parking needs may change depending on transit access and household size. Good conversions should also address natural light, ventilation, privacy, noise, accessibility, and security. These details help ensure that converted buildings become real homes rather than temporary spaces with residential labels.

Location Determines Long-Term Success

Not every empty hotel is well suited for housing. Many hotels are located near downtown districts, hospitals, employment centers, shopping areas, airports, or major transit routes. These locations may work well for workers, seniors, students, and other residents who need access to jobs and services. Housing close to employment can reduce commuting costs and give residents more time for family, education, and daily responsibilities. A centrally located hotel can therefore offer value beyond the number of apartments it creates.

Other hotel locations may present serious challenges. Properties beside highways or in isolated commercial districts may lack grocery stores, schools, sidewalks, parks, or reliable public transportation. Before supporting a conversion, cities should study the full neighborhood environment and determine whether residents can meet basic needs safely and conveniently. In some cases, a conversion may still work if the city improves pedestrian connections, transit service, or nearby amenities. Housing supply matters, but location strongly affects whether that housing supports a stable quality of life.

Conversions Can Serve Different Housing Needs

Hotel conversions can support several types of housing depending on room sizes, location, and local demand. Smaller properties may become studio apartments for individuals, seniors, students, or workers. Larger hotels can sometimes combine rooms to create one-bedroom or family units. Some properties may also work well as supportive housing, where residents have access to case management, health services, employment support, or other programs. This flexibility allows cities to match different hotels to the housing needs of specific neighborhoods.

Cities should avoid using a single conversion model for every property. A hotel near a university may suit student or workforce housing, while one near a hospital might serve medical staff, seniors, or patients needing longer-term accommodations. Local housing studies can help planners understand which unit sizes and rent levels are most needed. When conversions are based on actual demand, they have a better chance of remaining occupied, financially stable, and useful to the community for many years.

Building a Broader Housing Strategy

Hotel conversions should be viewed as one part of a larger housing plan rather than a complete solution. Cities still need new construction, preservation of existing affordable units, zoning reform, rental assistance, and infrastructure investment. However, hotel reuse can add housing faster when appropriate buildings are available. It can also reduce the need for demolition and leverage structures that have already consumed land, materials, labor, and public infrastructure during their original development.

The strongest city programs combine clear zoning, targeted incentives, careful property selection, and standards that protect long-term residents. Local officials can work with developers, nonprofit housing groups, lenders, employers, and neighborhood organizations to identify projects that make financial and social sense. When these partnerships are well planned, urban housing expansion can turn empty hotels into valuable residential communities while increasing supply faster than relying on new construction alone. Reusing existing properties gives cities another practical tool for responding to housing shortages with greater speed, flexibility, and efficiency.