Currently, more than 20% of all office space in the U.S. is vacant, thanks in part to the COVID-19 pandemic, which had companies adopt full-time work-from-home or hybrid policies for their employees. But a new federal initiative, announced by President Biden, seeks to turn the empty real estate into affordable housing.
The U.S. is experiencing a growing crisis in the housing sector. President Biden’s administration is launching a multi-agency push to entice states and cities to convert office space into affordable housing. The push is something that some cities, like New York, have already been trying to do.
“Now, New York, of course, is the best city to live and work, so it is no surprise that people keep flocking here, but we simply do not have enough homes for them. But sometimes one problem can help solve another,” said Maria Torres-Springer, New York’s deputy mayor for Housing and Economic Development. “So, we have empty offices, not enough homes. Why don’t we turn outdated offices into apartments?”
Torres-Springer said regulations built up over decades have made it impractical and infeasible to turn commercial space into residential space in New York City.
The city is taking steps to ease those regulations. Still, city officials, including Mayor Eric Adams, said they need help from lawmakers in Albany, who Mayor Adams said failed to take critical action needed to facilitate the conversions in the last legislative session.
Now, the federal government has entered the conversation, announcing on Friday, Oct. 27, new actions to support converting commercial space into affordable housing across the country through financial backing, technical assistance, and the sale of government-owned properties.
The initiative especially encourages the conversion of commercial space near public transportation hubs, which the Biden administration said will help reduce greenhouse emissions in the long run.
Funding for both new housing and office conversions near transit will be made available through the Department of Transportation. According to Transportation Secretary Pete Buttigieg, more than $35 billion will be available for loans.
The White House added that it is releasing a guidebook with 20 government programs across six agencies to help support conversions by helping builders secure low-interest loans and loan guarantees, grants and tax incentives.
This push aims to create more affordable housing as the U.S. grapples with an ever-growing homeless population, and it also aims to reduce the long-term impacts of widespread office space vacancies at the same time.
