Stephen Yang for BI
David Schwartz knows there's no quick fix for New York's housing crisis. But turning unused properties into apartments might help.
The market is ruthless, supply can't keep up, and over half of residents pay more than 30% of their income in rent — the threshold economists say is unaffordable. Schwartz, a property developer and lifelong Brooklynite, hopes a conversion of the historic Stewart Hotel can be part of the solution.
By 2029, the midtown Manhattan building's 611 vacant rooms are scheduled to become over 550 affordable apartments for low-income and formerly-homeless New Yorkers. It's part of New York City's ongoing housing push, which includes building thousands of new units and converting underused offices and hotels into homes. The Stewart project earned a shoutout in City Hall's recently released "Block by Block" plan. It's an example of local government, private actors, and nonprofits working together — a policy strategy that has been championed by the Mamdani administration.
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"It feels good to build projects that can house people that need it forever," Schwartz said. "New York only works if it works for everyone." The need for more accessible apartments is "virtually infinite."
This week, I joined Schwartz and Brenda Rosen — CEO of the nonprofit Breaking Ground, which is partnering on the project — on a tour of the 31-story hotel. Construction hasn't yet started, but the group is feeling optimistic.
Not only is the Stewart conversion "the right thing to do," but Schwartz said it's a solid investment as a developer. "The business side of it makes sense, because the supply and demand dynamics are very strong."
The hotel's cardboard-covered doors open to a stalled escalator and a grand art-deco lobby. Opened in 1929 as the Governor Clinton, it's dusty, dimly-lit, and paint is peeling from the walls. The high ceilings and gold-plated elevators seem unchanged from eras past.
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Slate Property Group and Breaking Ground bought the space for $255 million at the end of last year — after it closed around 2022 and briefly served as a migrant shelter. Financing came from a collection of state and city affordable housing subsidies, and contributions from partners like Wells Fargo, JP Morgan Chase, and the Low Income Investment Fund. The total project cost will be higher, and the team is still working on construction estimates.
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Schwartz said that having this financial backing is vital, and it's often a big barrier to building affordable housing. Land, construction, and architecture costs are the same as any other build, he said: "That's the challenge."
Once it's up and running, the building's tenants will be pulled from two main sources: New York City's existing Housing Connect Lottery system — which typically serves households living at or below 60% of the area's median income — and referrals for homeless individuals from Breaking Ground and the NYC Department of Homelessness.
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As we walked through the building, the team showed me samples of rooms that they plan to renovate into studio or one-bedroom apartments. Hotels are ideal for affordable home conversions, Schwartz said. The rooms already have windows and their own bathrooms, and some even have existing kitchenettes, reducing extra construction costs and logistical headaches that an office-to-apartment conversion might require.
Stewart's Midtown location also makes it a good housing candidate. It's near major subway and bus lines, job opportunities, and schools. The Prince George — another historic hotel Breaking Ground helped convert into affordable housing — is a few blocks away.
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New tenants at the Stewart can expect to pay rent that's about 30% or less of their income, which will likely be under $2,000 a month. With rent-stabilized units, Rosen said she expects residents will stay for the long term.
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The team behind the Stewart conversion is also building an on-site health and social services hub. In what were some of the hotel's old business centers and conference rooms, Rosen said the building will have a dedicated case manager, medical staff, and therapists available free of charge to residents. They'll also offer benefits counseling.
"It's an entire suite of programming that is designed around wellness," she said.
In the hotel's chandelier-clad lobby and ballroom, the building will offer a space to host weddings and special events. Revenue from those event rentals will go back into funding the affordable units and social services, Rosen said. It's also where she plans to host an annual tenant Thanksgiving dinner.
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While initial plans for the Stewart conversion predate the Mamdani administration, both Schwartz and Rosen said City Hall has been immensely supportive of the project. It also goes hand-in-hand with Mamdani's pledge to build 200,000 new affordable homes in the city, alongside pitches to make groceries, childcare, and transportation more affordable. All of these initiatives could help New Yorkers build lasting housing security, Rosen said.
The team also hopes the Stewart is a model for successful affordable housing in other cities.
"If we can build this in Midtown Manhattan," Schwartz said. "We can do it anywhere."
Stephen Yang for BI
from All Content from Business Insider https://www.businessinsider.com/see-the-vintage-hotel-nyc-is-converting-into-affordable-housing-2026-6
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