The optics of making hotel rooms available to low-income travelers just aren’t good, and that’s partly why funding for a potential federal housing program for visitors in federal hotels has hit a snag.
The federal government under President Donald Trump is planning to tap taxes raised from the premium rates that visitors pay to stay in government-owned or leased hotels for a potential $1 billion program to subsidize accommodations for low-income travelers. The proposed program falls in line with his presidential campaign pledge to devote $200 billion in infrastructure spending to improving the nation’s housing supply.
Supporters argue that the program, called the Guest House Recovery Fund, is an important way to help manage the nation’s transition from an age of rapid urban growth to a time of global economic growth and the rise of cities as the engine of the country’s economy. It could boost revenues for cities and states through new taxes by making those spaces available for low-income travelers. Hotels would see a decrease in revenue.
“We need to be a place that welcomes and serves the national and international traveler,” said Beth Brooke, president of the National Association of Hotel Owners, an industry group. “But at the same time, we need to be smart about preserving our properties.”
But a proposal to build the fund in the omnibus spending bill, part of a broader solution to pay for Trump’s infrastructure projects, is facing political opposition in Congress. Sen. Patty Murray, D-Wash., a member of the Senate Appropriations Committee and its top budgeter, told the Washington Post on Thursday that she would fight the inclusion of the $1 billion proposal in the spending bill. The House version of the omnibus bill also offers no funding for the hotel program.
“This is not a time to use housing dollars as a Band-Aid,” Murray said. “It’s not a time to create a new problem and then not fix it when it’s already there.”
Brooke said that the $1 billion was only a good start and that the industry wanted to see Congress add a total of $3 billion to the funding, starting with an initial $500 million next year. That could be a tough sell.
“Clearly we’d love to see that, but that’s a lot of money in an omnibus bill,” she said.
The hotel industry, which often sees its workers sleeping in their cars, had plenty of reason to support the program. Since the beginning of the year, 90 percent of city-owned hotels have made changes to make it easier for workers to find more affordable housing, according to a survey by the Coalition for the Homeless. In New York, as many as 100,000 hotel workers spend up to 60 percent of their income on housing, according to a report by the Alliance for Quality Housing and The Neighborhood Network.
Matt Kaufmann, a principal with commercial real estate firm KBS Hospitality, said that he hoped lawmakers would be willing to make the funding part of the omnibus bill.
“I’d like to see the conference committee hammer it out because I think it’s a good idea and it makes sense in an administration that likes to help low-income travelers,” he said.
Despite the political opposition, hotels and advocates still view the program as an economic development tool. Together, the chambers of commerce of San Diego, Boston, Charlotte, New York, Las Vegas and Washington, D.C., all have released position papers advocating the program’s inclusion in the legislation.
Kaufmann pointed to data indicating that the proposed hotel program would have a minimal impact on rates — as little as 1 percent — and that it could, over time, benefit the industry by providing a boost in new revenue.
Ultimately, he said, “we are more focused on revenue.”
“This is why so many businesses support this,” he said. “It’s not a risk.”