In a significant move to combat homelessness and expand affordable housing options, New York City has successfully transformed a notorious illegal hotel located at 235 West 107th Street into permanent supportive housing. This $38 million project, a collaboration between the NYC Department of Housing Preservation and Development (HPD), Rockabill Development, and Goddard Riverside, marks a crucial step in preserving Single Room Occupancies (SROs) as a vital resource for vulnerable New Yorkers. The initiative directly addresses the city’s commitment, outlined in Mayor Adams’ Housing Our Neighbors Blueprint, to accelerate the creation of supportive housing and provide stable homes for individuals with a history of chronic homelessness.
The property on 107th Street, formerly operating as The Morningside Inn, had a long history of illegal transient hotel operations, resulting in over $280,000 in fines issued by the Mayor’s Office of Special Enforcement (OSE) since 2012. Despite being legally zoned for permanent residential use, the previous ownership misused the building, exacerbating the city’s housing crisis. Recognizing the potential to repurpose this valuable SRO property, Rockabill Development and Goddard Riverside acquired it in March 2021 with a clear vision: to convert it into a haven of permanent supportive housing. This transformation underscores the importance of SROs, which once constituted a significant portion of New York City’s housing stock, in offering flexible and affordable housing solutions for extremely low-income residents.
HPD Commissioner Adolfo Carrión, Jr. emphasized the city’s commitment to this project, stating, “With our partners, Goddard and Rockabill, HPD is proud to get this illegal hotel back into productive use for those who need it the most. Our Supportive Housing Rehabilitation program ensures homes are affordable to low-income New Yorkers, on-site services are available to formerly homeless households, and buildings are rehabilitated to meet our high design standards for preservation.”
Katie Devine, Principal at Rockabill, highlighted the broader significance of the 107th Street project: “At a time when the need for high-quality supportive housing has never been greater, the responsible preservation of SROs is smart public policy and adds to the social safety net for extremely low-income New Yorkers. Rockabill is proud to champion the revival of SROs as permanent supportive housing and reaffirm the critical role this housing model has played in the lives of New Yorkers for more than a century.”
The newly named Stephan Russo Residence, in honor of Goddard Riverside’s former Executive Director, directly responds to the urgent needs of individuals experiencing homelessness. Roderick L. Jones, President of Goddard Riverside, explained, “Every day our outreach teams speak with people living on the street who say they’d come indoors if they could have their own room. We look forward to opening the Stephan Russo Residence to give those people a chance at a better and more dignified life. We believe the neighborhood will also benefit when more people are housed.”
Christian Klossner, Executive Director of the Mayor’s Office of Special Enforcement, noted the culmination of efforts to reclaim housing stock: “Protecting the City’s housing stock has been the cornerstone of the Office of Special Enforcement’s work on illegal short-term rentals. We are pleased that years of inspections, dozens of violations, and nearly $280,000 in fines have resulted in this illegal hotel being sold to trusted partners who are restoring the building back to its lawful use housing New Yorkers.“
The renovation of the 107th Street building, originally built in 1912, involves a comprehensive reconfiguration of its 84 units. To enhance living conditions and meet modern standards, units are being redesigned to include private bathrooms, a significant upgrade from the previous shared facilities. This modernization will result in 68 units for residents, plus one superintendent’s unit. Each floor of the six-story building will feature communal kitchens and dining areas, fostering a sense of community among residents. Furthermore, the first floor and cellar will be transformed into a community room and dedicated spaces for case management and social services, crucial for supporting residents as they transition from homelessness. Accessibility will be improved throughout the building, ensuring ADA compliance and enhancing access to outdoor courtyards.
Beyond unit renovations, the project encompasses significant building-wide upgrades. These include elevator modernization, exterior façade repairs, new flooring, and comprehensive energy efficiency measures to align with city and state energy codes and Enterprise Green Community standards. A key energy efficiency upgrade is the replacement of the old boiler system with a modern, all-electric variable refrigerant flow (VRF) system, offering energy-efficient heating and cooling with individual unit controls. Construction is scheduled to commence next month, with ConRock Construction serving as the General Contractor.
The Stephan Russo Residence at 107th Street will provide 68 affordable units, with 54 designated for supportive housing through New York City’s 15/15 Supportive Housing Initiative, targeting chronically homeless individuals. Six units will be available through the city’s Housing Connect lottery at 60 percent AMI, and eight units will remain affordable for existing long-term residents.
The financial structure of the project is complex and multi-layered, reflecting the collaborative effort involved. Key financing components include an $18.4 million capital subsidy from HPD’s Supportive Housing Loan Program, a $14 million construction loan from Chase, and $700,000 in Reso A funding from Manhattan Borough President Mark Levine and Councilmember Gale Brewer. The project also leverages $13.6 million in equity through Low-income Housing Tax Credits (LIHTC) with CREA as the syndicator and Citizen’s Bank as the investor. Permanent loan financing is provided by the NYCERS Pension Fund with SONYMA Insurance, and acquisition financing was secured from Enterprise Community Partners and the New York City Acquisition Fund.
Local representatives have voiced strong support for the project on 107th Street. Council Member Gale Brewer, a long-time advocate for the Upper West Side, stated, “As a longtime representative and resident of the Upper West Side, I know how much we need additional housing for people living on the street. I’m proud to partner on this new residence with Goddard Riverside, a respected provider that runs four supportive housing buildings in Manhattan, including two in my district that have been there since the 1990s. I’m confident that this residence will be a good neighbor.” Council Member Shaun Abreu further emphasized the need for action, “We talk and talk about affordable housing, but it means nothing unless we actually build permanent, accessible, and supportive housing for low-income New Yorkers. I am so proud to support this project, which revives a defunct hotel and follows through on our promises to invest in affordable, long-term housing for our most marginalized communities.”
Sharmi Sobhan, Executive Director of Chase Community Development Banking, highlighted the critical need for such projects: “We are proud to partner with Rockabill Development and Goddard Riverside on the rehabilitation of the Stephan Russo Residence at a time when affordable housing continues to be a critical need in New York. These high-quality units will be an indispensable asset for the community, increasing the local stock of affordable housing and transforming the lives of individuals with the addition of onsite supportive services.” Neala Martin, SVP – Originator at CREA, echoed this sentiment, “CREA is honored to be a part of the transformation and rehabilitation of 235 West 107th Street. We applaud the many development and financing partners for their contributions, as well as their commitment to providing opportunities through affordable housing for New Yorkers experiencing homelessness.”
The transformation of 235 West 107th Street into the Stephan Russo Residence represents a significant victory in the ongoing effort to address homelessness and expand affordable housing in New York City. By converting an illegal hotel into permanent supportive housing, this project not only provides much-needed homes for vulnerable individuals but also revitalizes a valuable SRO property, ensuring its continued contribution to the city’s affordable housing landscape. The collaborative approach, involving city agencies, non-profit organizations, and financial institutions, sets a positive example for future initiatives aimed at creating inclusive and supportive communities.
