Did you know that the average person has to spend 40 to 50% of their income on rent? Some people may find it shocking to spend that much to have a place to live. Unfortunately, a lot of people don’t have much choice.
The job market is going through extreme fluctuations while the house prices and rent have been skyrocketing. And if things weren’t bad enough already, the COVID-19 crisis has made things so much worse.
In such conditions, what can the average middle-income person do? One option is to opt for workforce housing.
What is Workforce Housing?
Maxwell Drever says workforce Housing makes affordable housing more approachable for citizens earning 60% to 120% of the area median income (AMI). Middle-income workers, such as retail workers, police officers, public school teachers, people in healthcare, etc. are the prime targets for the program. There are certain criteria that need to be met for a household to be eligible for a workforce housing program.
The problem is that a good portion of the public can theoretically qualify for such programs. This can make it extremely difficult to provide affordable workforce housing. Yet, there is a way that can potentially solve this issue.
The Silver Living over the Downfall of the Hotel Business
Another big issue that occurred after the lockdown was the travel restrictions leading to a huge loss in the hotel business. Millions of rooms remained empty throughout the year in 2020. Between 2019 and 2020, the occupancy of the rooms fell by 459 million.
To talk about it in numbers, only about 44% of rooms were occupied in 2020, as compared to 66% in 2019. Although it is expected that occupancy revenue will increase to $25.9 billion by the end of this year, it will still be 34% below pre-COVID levels.
In addition, the unemployment rate in the hotel industry went up to 13%. This was more than twice as much as the unemployment rate of 6% in 2019.
However, the vacant and underutilized hotels/motels can be used to address the workforce housing shortage.
Brandon Hardin, a NAR Research Economist, discussed this in a blog about affordable workforce housing. “Adaptive re-use is not only economical but also can be more environmentally friendly in comparison to new commercial developments as adaptive re-use emissions, for example, are lower.”
Not only would this save the cost of new commercial constructions for workforce housing, but it can also help the hotels generate some revenue from their vacant rooms. Since a number of hotel rooms already have a bathroom and a small kitchen attached, they wouldn’t require any alterations to transform into workforce housing.
Will The Hotel Industry Start Thriving Again in The Near Future?
Ever since the travel restrictions have softened a little, the hotel industry has seen a slight improvement. Travelling is becoming more common than it was at the height of the pandemic. However, it can take time before things go back to normal. Even then, most hotels – even on their best days – have a good number of empty rooms.
Therefore, it is expected that the hotel industry will likely experience some dramatic changes in the near future. It is still to be seen whether there would be a resurgence of travel anytime soon, but a number of the empty spaces in distressed hotels are expected to be turned into affordable workforce housing.