ATLANTIC CITY (July 25, 2021) – The Casino Reinvestment Development Authority is trying a new approach in the way it addresses the city’s vacant rooming houses.
A rooming house conversion program developed in 2020 that would allow owners to take low-interest loans to redevelop the properties — where people rent rooms for stays of varying durations — had few takers.
Now, the authority is taking matters into its own hands and purchasing vacant rooming houses to demolish or rehabilitate.
“Instead of continuing with that (project) knowing it’s not working, we’ve changed focus,” Matt Doherty, the CRDA’s executive director, said Thursday. “We are now purchasing rooming houses. We already purchased one on Tennessee Avenue, and we were approved two more on Tuesday.”
In February 2020, the CRDA announced its rooming house conversion plan.
While being touted as a plan to clean up blight in the Tourism District, there were concerns from residents and business owners about how it would be implemented.
Residents of rooming houses were also worried about being displaced if the number of affordable living situations would be reduced. Only vacant homes were eligible for the project.
Some questioned whether the plan would be enticing enough to convince smaller investors to assume additional financial risk and whether the proposal was targeting just one aspect of a larger problem.
The project offered investors $1.2 million to demolish or renovate vacant rooming houses for “lawful” uses, such as apartments, hotels, mixed-use buildings or single-family homes.
That money was returned to the CRDA’s general fund during a meeting last month after officials said no investors took interest in the project.
One investor applied for a $320,000 loan to convert a rooming house at 26 S. Kentucky Ave, but the approval expired without the applicant signing the agreement. At the time of the approval, one board member raised concerns that the applicant submitted the proposal with limited financial flexibility.
According to the CRDA’s annual report for 2020, the authority purchased a rooming house at 155 S. Tennessee Ave. for $425,000. The structure was demolished in May.
On Tuesday, the CRDA was approved to purchase two more rooming houses on California and Memorial avenues.
“We are hoping to have more purchases in the fall,” Doherty said.
The exact number of rooming houses in the city varies, depending on the agency. The CRDA identified 53, while the state Department of Community Affairs lists 56.
Only 30 of the city’s rooming houses have proper land-use approvals, according to the CRDA.
In the past, city officials have said rooming houses are a burden on municipal resources and public safety, because they are often hot spots for criminal activity. In 2018, the Atlantic City Police Department responded to more than 800 calls for service to the city’s known rooming houses.
The number of people occupying rooming houses and their proximity to one another in certain neighborhoods violate city regulations. According to city and state law, the total number of people living in rooming houses in the city cannot exceed half of 1% of the total population. Based on 2018 U.S. Census population data, Atlantic City should only have about 190 people in rooming houses.