Former illegal Upper West Side hotel will become apartments for homeless and low income residents

As part of a larger plan to create much-needed affordable housing, Mayor Eric Adams has expressed his support for converting hotels to residential units. In the first such attempt by his administration, Adams announced on Monday plans to convert what had been an illegal hotel at 258 West 97th Street on the Upper West Side into 80 new units of housing primarily for formerly homeless and low-income New Yorkers.

The hotel, located in one of New York City’s priciest neighborhoods, has been made available for conversion thanks to a $1.1 million settlement–the culmination of a multi-year legal battle with the hotel’s former owner, Hank Freid. Freid’s company owned and operated dozens of illegal hotels, including apartments that were being used as short-term rentals in violation of the 2010 Multiple Dwelling Law requiring that buildings with a Single Room Occupancy (SRO) classification be permanent housing.

As the lawsuit, which began in 2017, slowly progressed, Freid sold his Upper West Side properties. However, the resulting settlement generated nearly $2 million in penalties. The terms of the settlement also outline how the city gained a permanent injunction against “illegally using or advertising the property for short-term rentals.”

The city will get $622,550 in penalties for sustained illegal activity and $477,450 as compensation for 333 violations, according to a press release from the mayor’s office. The lawsuit effectively halted the illegal use of more than 300 Manhattan homes in the 97th Street building and others.

The Fortune Society, a non-profit organization that supports successful re-entry from incarceration, has acquired the building and will be working with the Department of Housing Preservation and Development (HPD) and the Department of Social Services (DSS) to create apartments with rent protections, rehabilitation, and social services on-site.

The result will be 82 rent-restricted apartments, including 58 homes for the formerly homeless, nine units that will be made available via the city’s affordable housing lottery portal, Housing Connect, and 15 units that will be set aside for existing tenants along with city-backed protection to make sure they’re able to keep their affordable rents. One unit will be designated for an on-site super.

“Today, we are not only shutting down an illegal hotel operator but also creating 80 new affordable homes for New Yorkers struggling to get by,” Adams said in a statement. “The old approaches to the affordable housing crisis are no longer enough–which is why my administration is pursuing bold, innovative strategies like this one to create housing New Yorkers can actually afford.”

“We need a response with the urgency to match the crisis, and we will explore every opportunity, in every corner of the city, to create the affordable housing New Yorkers need and deserve.”

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