Transitional Housing in NYC (440 W 41st Street)

Overview

In October 2022, a newly-renovated, 13-story, 109-unit transitional housing development opened for families experiencing homelessness in New York City’s Midtown Manhattan Hell’s Kitchen neighborhood. It is an example of an innovative approach to addressing homelessness, whereby private partners raise the money to buy and renovate properties, nonprofit organizations provide the much-needed on-site social services to the residents, and the local government provides a long-term subsidy to operate the project. Westhab is the non-profit operator of the homeless shelter and provides on-site services, including daycare, social services, adult education, and training.

Context:

The number of homeless New Yorkers in municipal shelters is now 18 percent higher than it was ten years ago, with the number of homeless single adults 97 percent higher than it was ten years ago (source).
1 out of every 106 people in NYC is homeless, and 13% of our nation’s homeless population lives in NYC, outstripping every other city in the U.S. (source).
Over the course of 2020, 122,926 different homeless adults and children slept in the NYC municipal shelter system. This includes more than 39,300 homeless children (source).
Homelessness has reached its highest levels since the Great Depression (one page fact sheet, The State of the Homeless report, by Coalition for the Homeless)
50,000 migrants stay across 100 hotels and other facilities across in Manhattan (NYTimes)

Mission: Provide transitional housing for families experiencing homelessness – families have a place to call home (up to one year) as they are placed into permanent housing nearby or elsewhere.

Gallery

Site

Owner: The developer and owner of the project is a partnership between Standard Communities and Camber Property Group, who purchased the project in 2021.

Previous Use: Partially vacated, underutilized temporary-stay facility.

Use Arrangement: The developer team (Standard and Camber) rents the property to the operating nonprofit, Westhab. Westhab has a nine-year contract with New York City’s Department of Homeless Services to manage the property and run on-site case management services for the property’s residents. Westhab pays the developer team a fair-market rent for use of the entire building.

Site Selection Criteria Considerations: The underutilized property was in the foreclosure process and available for purchase at a time when the City needed more transitional housing services, especially in the Midtown Manhattan neighborhood, and there was a local developer team that could execute on a plan.

Funding

Upfront Development*	$55 million	$41 million purchase + $9 million renovation + $5 million financing, soft, closing, and other costsFunded by private equity (with a social impact lens) and balance-sheet bank loan
Cost Per Unit*	$500k	109 units in total
Operating Costs*	–	–
Cost Per Unit*	–	–

*approximations

Development

Lead Deal Coordinator		Standard Communities and Camber Property Group.
Community Engagement		Westhab
Lead Government Agency		New York City Department of Homeless Services (Dept. of Social Services)

Operations

Lead Provider

Operator	Westhab, a Yonkers-based 501(c)3 nonprofit providing housing, shelter, and employment services to unhoused and low income families, provides the on-site case management and property management.https://www.westhab.org/
Agreement	9-year operating agreement, coinciding with the term of the building lease.
Staffing	Day-shift workers Shelter Manager Program Supervisor Logistic Coordinators Case Managers Security Janitorial Back-end Admin
Services Provided	Facilitating the property’s residents in finding long term housing solutions, to move from current transitional facility into a home nearby or elsewhere that is best for the resident.

Operating Expenses	On-Site Personnel Maintenance Client Services