New Incentives for Office to Residential Conversions from the White House

Good news arrived today from Washington DC for anyone interested in revitalizing cities with office to residential conversions: “the Biden-Harris Administration is announcing new actions to support the conversion of high-vacancy commercial buildings to residential use, including through new financing, technical assistance, and sale of federal properties.”

What Role Will State and Federal Support Play in California’s Office to Residential Conversions?

This is an exciting development, as state and federal support will be critical for cities to make these conversions work. California has made some funds available for office building to residential conversions, as we wrote about in this post, but federal financial support and assistance with sharing knowledge will accelerate the effort. Individual cities like San Francisco are already changing their codes to make office to residential conversions a reality and learning what works (and what doesn’t) from other cities will make local policies more effective.

New Federal Funding and Repurposing Property 

• The Department of Transportation (DOT) is releasing new guidance on how the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation & Improvement Financing (RRIF) programs – which combined have over $35 billion in available lending capacity for transit-oriented development projects at below market interest rates, can be used to finance housing development near transportation, including conversion projects. 
• DOT is releasing guidance that makes it easier for transit agencies to repurpose properties for transit-oriented development and affordable housing projects, including conversions near transit. 
• 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 via converting offices to residential units.
• The General Services Administration (GSA) will expand on its Good Neighbor Program to promote the sale of surplus federal properties that buyers could potentially redevelop for residential use.

Conversions via Federal Funding

• The White House is releasing a Commercial to Residential Federal Resources Guidebook with over 20 federal programs across six federal agencies that can be used to support converting offices to residential units.
• To accompany the guidebook the White House is announcing training workshops this fall for local and state governments, real estate developers, owners, builders, and lenders on how to use federal programs for commercial to residential conversions and achieve additional goals including affordability and building zero emissions housing.
• DOT will be announcing new technical assistance through direct engagement with federal agencies and third-party intermediaries to support municipalities and developers seeking to use DOT tools to finance conversions.
• Through the Better Buildings Initiative, DOE also launched a commercial to zero emissions housing toolkit that includes technical and financial guidance on how to achieve zero emissions commercial to residential conversions. 
• And today, Treasury is posting a blog that describes tax incentives for builders of multifamily housing. 

Collaboration with States, Localities, and the Private Sector

• The White House is encouraging all state, local, tribal, and territorial entities to identify all available public tools and land disposition opportunities to facilitate office to residential conversions.
• The National Association of Counties (NACo) is expanding its focus to support county capacity to convert commercial properties to residential use, including by leveraging available federal programs and technical assistance efforts.
• The American Planning Association, in collaboration with the Lincoln Institute of Land Policy and Harvard University Graduate School of Design, is expanding its existing work with the planning directors of the 30 largest U.S. cities to include new programs on commercial to residential conversions.

Read more here, via the White House.