Maxwell Drever says the average millennial is spending 40% to 50% of their income just on rent. While it makes no sense to spend such a large chunk of your money on housing. Most people don’t have a choice. The average rent is skyrocketing, whereas the job market isn’t stable at all. And with the COVID-19 pandemic, things just got even worse.
What is Workforce Housing?
Workforce Housing is a program that provides affordable housing. To employees earning 60% to 120% of the area median income (AMI). It mostly targets middle-income workers, including police officers, health care workers, teachers, firefighters, retail clerks, and other similar jobs. A household needs to meet certain requirements to qualify for workforce housing.
However, Maxwell Drever is emphatic in his point that providing affordable workforce housing. So everyone can still be a huge issue, considering a good portion of the public can qualify for this program. Yet, there is a way to solve this issue.
A Decline in Hotel Revenue May Have a Silver Lining
The lockdown instilled after the spread of the coronavirus also caused another big issue. The travel restrictions led to a huge loss in the hotel business. Millions of rooms remained empty throughout the year in 2020. The occupancy of the rooms fell by 459 million between 2019 to 2020.
To give it more perspective, only about 44% of rooms were occupied in 2020, as compared to 66% in 2019. Although it is expected that the occupancy revenue will increase. By $25.9 billion by the end of 2021, it will still be 34% below pre-COVID levels.
The unemployment rate in the hotel industry went up to 13%. 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.
“Adaptive re-use is not only economical but also can be more environmentally friendly in comparison. To new commercial developments. As for adaptive re-use emissions. For example, are lower,” said Brandon Hardin, a NAR Research Economist, in a blog discussing affordable workforce housing.
Not only would this save the cost of new commercial constructions. Workforce housing, but can also help the hotels make some revenue. From their vacant rooms. Since most hotel rooms already have a bathroom and a small kitchen attached. They wouldn’t require too many alterations to be turned into workforce housing.
Will The Hotel Industry Continue to Struggle?
Over the past year, the hotel industry has seen a slight improvement. The COVID-related restrictions are slowly being erased. And traveling is becoming more common than it was at the height of the pandemic. However, it will certainly take time before things go back to normal. Even then, most hotels do have a good percentage of empty rooms – even on their best days.
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 the empty spaces in a lot of distressed hotels are likely to be turned into affordable workforce housing.