WASHINGTON (AP) — The Biden administration is launching a comprehensive effort involving multiple government agencies to stimulate the conversion of vacant office buildings into housing units. This initiative, announced on Friday, aims to address both the shortage of affordable housing and the surplus of empty office buildings resulting from the post-pandemic situation.
“This presents a great opportunity to increase housing supply and revitalize main streets. It’s a win-win situation,” stated Lael Brainard, the director of the National Economic Council. “We are harnessing resources from various government departments.”
To encourage the creation of new affordable housing units near transportation hubs like bus terminals and subway stations, several measures will be implemented. Secretary of Transportation Pete Buttigieg mentioned that his department will provide guidance to states and municipalities on accessing funding through two federal programs – the Transportation Infrastructure Finance and Innovation Act and Railroad Rehabilitation & Improvement Financing.
Buttigieg also stated that over $35 billion in lending capacity will be made available to offer below-market rate loans for financing both new housing construction and office conversions near transportation hubs.
The Department of Transportation is releasing new guidance to facilitate the transfer of unused properties or buildings owned by transit agencies to local governments or nonprofit organizations for conversion into affordable housing units. Buttigieg also mentioned the possibility of transferring underutilized buildings, like storage facilities, to private developers at below-market prices if they commit to including a negotiated percentage of affordable housing units.
In addition, the General Services Administration (GSA) will collaborate with the Office of Management and Budget to identify surplus federal properties suitable for development into affordable housing units.
The White House is publishing a Commercial to Residential Federal Resources Guidebook which outlines more than 20 federal programs from six agencies that can support these conversions. These programs include low-interest loans, loan guarantees, grants, and tax incentives for developers.
Many cities across the country have been grappling with half-empty downtown areas due to businesses adopting hybrid work models during the pandemic. Pete Buttigieg acknowledged this shift, stating, “The pandemic really changed the patterns of how many Americans live and work.”
With more employees working from home, businesses have abandoned large office spaces, leaving downtown property owners with partially vacant buildings and city governments facing reduced tax revenue. This trend may persist even after the pandemic, as businesses wait for long-term leases to expire before shrinking their office space significantly. In response, numerous municipal governments have embraced the idea of office-to-housing conversions, offering tax incentives to developers to offset the costs involved.
Deputy HUD Secretary Adrianne Todman emphasized that the new package of initiatives aims to accelerate the office-to-housing conversion efforts nationwide.
