The city of New York is facing a severe housing crisis, with a shortage of 473,000 apartments projected by the Regional Plan Association by 2032. In 2022, only 11,000 new apartments were built, a stark contrast to the 45,000 units completed in 2019. Alongside this housing crisis is an office vacancy rate of 20%, primarily affecting older and undesirable buildings.
One potential solution being considered involves transforming these outdated office spaces into residential properties. This idea has gained traction following Chicago’s plan to provide generous subsidies to landlords for converting vacant downtown buildings. However, this type of location-specific program may not have a significant impact on New York City, which boasts an office market nearly double the size of Chicago’s and thousands of troubled buildings.
One of the major obstacles preventing these conversions in New York is the city’s archaic zoning rules, which severely limit the areas and numbers of buildings eligible for conversion. The current proposals aim to ease these restrictions by allowing building conversions built as recently as 1991, instead of the previous cutoff dates of 1961 or 1971 in parts of Downtown Manhattan. Additionally, the proposed changes would expand the areas where conversions are permitted, covering nearly 90% of the five boroughs.
Urban planners argue that such comprehensive changes are necessary to encourage large-scale transformations from useless offices to residential properties. The state recently made strides in addressing both the office market strain and the scarcity of new homes by offering a 90% tax exemption for landlords who convert struggling office towers into rental apartments, provided that they designate 25% of the units as “affordable.
City Planning Commissioner Daniel Garodnick estimated that these rezoning proposals would make approximately 136 million square feet of offices available for conversion to residential properties. He explained that New York City is tackling this issue on a city-wide basis, offering support to struggling office spaces in every borough and enabling the transformation of various buildings into new housing options.
Despite these advantages, Mayor Eric Adams faces challenges in convincing the City Council to approve the proposed changes by the end of the year. Some council members may object due to concerns about job loss in areas like the Garment District or opposition to providing developers with “favors” not tied to affordable housing components. Other council members, particularly those with a NIMBY mindset, may resist any neighborhood changes that could disrupt their constituents’ way of life.
This presents a defining moment for Mayor Adams as he continues to promote his “City of Yes” vision while grappling with other pressing issues like the ongoing scaffold problem and the proliferation of illegal cannabis dispensaries since his pledge to shut them down. To succeed in making apartment conversions easier, Mayor Adams will need to demonstrate strong leadership and effectively navigate the complexities of New York City’s political landscape.
