The White House announced on Friday new actions to support the conversion of commercial buildings to residential as part of a broader effort to help with housing affordability.
Administration officials pointed out that office vacancies are very high and supply of affordable housing very low. Given the dynamic, the Biden administration is seeking to leverage the imbalance to help build more housing units.
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During a call with reporters, National Economic Council Director Lael Brainard said that this latest initiative will be “utilizing resources from across the government” in order to help with the issue of housing affordability and encourage commercial properties to be converted for residential usage.
“We know that commercial building vacancies are at an all-time high in some cities and communities across the country while housing supply in those same communities remains strained,” she said. “This presents an area of opportunity to both increase housing supply while revitalizing main streets.”
The Department of Transportation, led by Secretary Pete Buttigieg, announced expanded federal financing options for the development of housing located near transit hubs.
The Transportation Department is specifically issuing guidance that will make it easier to build housing near transit with programs that have a combined $35 billion in lending capacity, according to Brainard.
The Department of Housing and Urban Development also released new guidance on how existing funding can be used to help the housing situation.
“HUD is releasing an updated notice on how the Community Development Block Grant fund, $10 billion of which have been allocated during this Administration, can be used to boost housing supply — including the acquisition, rehabilitation, and conversion of commercial properties to residential uses and mixed-use development,” the White House said in a fact sheet.
During the press call, Buttigieg emphasized that some localities have already independently undertaken efforts to convert unused commercial office space into apartments and residential space. For instance, places like Washington, D.C., and New York, where office vacancy is still high, have been pushing for more conversions.
“Now the Biden-Harris administration is helping to advance those efforts to increase housing supply and reduce housing costs,” Buttigieg said. “These downtowns and central business districts that we’re talking about, they are often already designed and oriented around public transit, which makes it a good fit for our department to help to support.”
In Washington, D.C., Mayor Muriel Bowser has been pushing to get office-only districts rezoned for more mixed-use properties. Bowser has sought to bring 15,000 residents into downtown Washington, D.C., by converting unused office space into residential units.
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The district saw the largest number of office-to-apartment conversions in the country between 2020 and 2021, with 1,565 new units, according to data from Yardi Matrix, which provides data services for property managers. Philadelphia also notched more than 1,500 converted units during that time and Chicago added more than 1,100.
In addition to Friday’s announcement, the White House recently put out a fact sheet listing a few new efforts to boost homeownership, including a Federal Housing Administration policy allowing prospective borrowers to use income from renting out accessory dwelling units to count as income for the purposes of qualifying for an FHA mortgage.
