In a bid to tackle the growing housing shortage and address the current surge in office vacancies, the Biden administration has unveiled a new multi-agency plan to convert empty office spaces into housing. As interest rates approach 8%, well above the pre-pandemic average of 3.9%, and office vacancies reach a 30-year high, this initiative aims to create affordable and energy-efficient housing options near transportation hubs.
The White House, in a fact sheet, stated that these measures will not only address the housing crisis but also reduce greenhouse gas emissions, with nearly 30% originating from the building sector. The plan includes financing, technical assistance, and the sale of federal properties to facilitate the conversion of high-vacancy commercial buildings.
Transportation Secretary Pete Buttigieg emphasized the opportunity to utilize existing downtown areas and central business districts that are already well-connected to public transit. By adding more housing near transportation hubs, the administration aims to reduce both housing and transportation costs.
Moreover, the Department of Transportation is releasing new guidance on how certain infrastructure funding programs, totaling $35 billion in lending capacity, can be used to finance housing developments near transportation. This includes the conversion of office blocks into residential spaces.
The administration is also streamlining the process for federal agencies to repurpose properties for housing projects. This involves shifting properties to local governments, non-profit organizations, and for-profit developments. Additionally, the General Services Administration will expand a program to promote the sale of surplus federal properties that can potentially be redeveloped for residential use.
To further increase the housing supply, the Department of Housing and Urban Development will open up the Community Development Block Grant fund, currently allocated $10 billion by the administration. This fund will support initiatives that address the housing shortage.
In order to provide guidance and support for these conversions, the White House is releasing a guidebook that outlines over 20 federal programs across six federal agencies. These programs offer grants and tax incentives to facilitate the transformation of office spaces into housing.
The COVID-19 pandemic has drastically altered the way Americans live and work, leading to a significant shift in office occupancy. As a result, many property owners are grappling with empty office spaces. Commercial real estate investment volumes fell by 64% year-over-year in the second quarter of 2023, and office vacancies have reached a 30-year high of 18.2%.
The Biden administration’s plan aims to address these challenges by repurposing vacant office spaces into much-needed housing. By leveraging federal resources and incentivizing the conversion process, the administration hopes to alleviate the housing shortage, reduce greenhouse gas emissions, and revitalize commercial real estate.
It is important to note that this article is based on information provided by the Biden administration and various federal agencies. The Associated Press also contributed to this report.
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