Cities across the country are facing a housing crisis, with millions of homes needed and record-high office vacancy rates. To address this issue, many cities are encouraging the conversion of unused office space into housing. Regulatory barriers such as building codes, minimum unit sizes, and natural light requirements are driving up costs for conversions.
Cities like Minneapolis, San Francisco, Seattle, New York City, and Denver are implementing various strategies to streamline the conversion process. Despite these efforts, conversions have only made a small impact on the housing crisis, with just over 22,000 apartments created between 2016 and April 2024.
To promote conversions, cities and states are offering incentives and funding to developers. New York City, Chicago, and Washington, D.C. have introduced tax exemptions and funding opportunities for office-to-residential conversions. While some legislation supporting these conversions has faced challenges, experts believe that efforts to convert underused office spaces into housing will continue to increase nationwide. Ultimately, the goal is to provide affordable housing for all Americans, particularly underserved communities.
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