Biden admin launches multi-billion dollar push to transform empty office space into housing
The White House said the houses will be affordable and energy-efficient
MILE HIGH HOUSING COSTS
According to Freddie Mac, the average rate is approaching 8% this month, well above the pre-pandemic average of 3.9%.
The Biden administration on Friday announced a new multi-agency plan to convert empty office spaces into housing as part of an effort to tackle a housing shortage while office vacancies reach a 30-year high.
The White House announced moves to support the conversion of high-vacancy commercial buildings to residential use, particularly near transportation hubs. The moves include financing, technical assistance and the sale of federal properties.
"These announcements will create much-needed housing that is affordable, energy-efficient, near transit and good jobs, and reduce greenhouse gas emissions, nearly 30 percent of which comes from the building sector," the White House said in a fact sheet.
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Pedestrians crossing a street, July 11, 2023, in downtown Boston. ( (AP Photo/Steve LeBlanc, File) / AP Newsroom)
The Department of Transportation is releasing new guidance on how certain infrastructure funding programs with $35 billion in lending capacity can be used to finance housing developments near transportation, including the conversion of office blocks.
"These downtowns and central business districts . . . are already designed and oriented around public transit," Transportation Secretary Pete Buttigieg said on Friday. "Our intention is to make the most of this opportunity to add more housing near transit in ways that not only reduce the cost of housing but also reduce the cost of transportation."
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The administration is also releasing guidance smoothing the path for federal agencies to repurpose properties for housing projects, including by shifting them to local governments, non-profits, and for-profit developments. The General Services Administration will also be expanding a program to promote the sale of "surplus federal properties" that could potentially be redeveloped for residential use.
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Separately, the Community Development Block Grant fund — currently allocated $10 billion by the administration — is being opened by the Department of Housing and Urban Development to increase the housing supply.
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The White House is also releasing a guidebook with over 20 federal programs across six federal agencies that can be used to convert offices to houses — including grants and tax incentives.
The initiatives come after the relationship between worker and office was overhauled in some sectors due to the COVID-19 pandemic, with greater adoption of either hybrid or fully remote forms of work. This has left some property owners struggling with empty space.
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"The pandemic really changed the patterns of how many Americans live and work," Buttigieg said.
The White House cited statistics showing that commercial real estate investment volumes fell by 64% year-over-year in the second quarter of 2023, while office vacancies reached a 30-year high of 18.2%.
The Associated Press contributed to this report.