The Biden administration is looking to help the real estate industry convert empty office buildings into apartments.
The White House announced a plan to facilitate office-to-resi conversions, especially near mass transit, Bloomberg reported. The plan centers on freeing up resources and financing to help usher projects through bureaucratic and monetary roadblocks.
The Department of Transportation is releasing guidance on how a pair of programs with more than $35 billion in combined lending capacity can finance housing projects — including conversions — near mass transit.
The agency is also making it easier for transit agencies to repurpose properties for development and affordable housing, enabling them to transfer sites to affordable housing developers or local governments at no cost.
The Department of Housing and Urban Development is updating its guidance on the Community Development Block Grant fund, which has already allocated $10 billion during Biden’s presidency to boost housing supply.
The General Services Administration is getting in on the act too, expanding a program that encourages the sale of underused federal properties to housing developers.
To aid the initiative, the White House is releasing a guidebook about programs, such as opportunities for low-interest loans and tax incentives, that can be leveraged to support conversions. Training sessions and technical assistance will also be made available to municipalities and developers.
Office-to-resi conversions have been a pipe dream of politicians and building owners since the onset of the pandemic, given the glut of office space and high demand for housing. Conversions address both issues at once, but come with challenges that elected officials tend to overlook.
Even half-empty offices can have tenants with long-term leases, and zoning and building codes make conversions expensive if not impossible. In New York City, for example, every bedroom must have a window — a problem in a building with large floor plates.
Also, districts where offices are struggling the most lack amenities like grocery stores that residential properties need to attract buyers and renters.
— Holden Walter-Warner