Converting Empty Office Buildings
Office space vacancy in Manhattan is 15% according to CBRE as of Summer 2023. From Buffalo to South Bend to Dallas - everyone is asking what do we do with office buildings because there are just less people working inside offices now.
The challenge is: office vacancies are up but retrofitting the buildings are often SO challenging because their floor plans are wide and don’t let light in. It is difficult to run mechanicals and utilities. You can read more about the trials and tribulations of retrofitting offices here from NPR.
The good news is, the Biden Administration announced their Housing Supply Action Plan which you can read here. The Bloomberg City Lab has covered this action plan with their thoughts - which you can read here.
“Buttigieg noted that urban downtowns tend to be situated near public transit, which brings office corridors under his purview. To that end, the department is releasing guidance for cities, states and developers to tap into financing from two of its flagship programs — which together account for more than $35 billion in lending — for rehab projects. Buttigieg said that new guidance will also allow transit agencies to transfer properties at no cost to local governments or developers for transit-oriented affordable housing developments.”
A piece from Biden Housing Supply Action Plan that is worth highlighting:
To that end, the Administration is taking the following immediate steps:
Leveraging transportation funding from the Bipartisan Infrastructure Law (BIL). Earlier this year, the Administration began using federal transportation programs to encourage state and local governments to boost housing supply, where consistent with current statutory requirements. For example, this year, the U.S. Department of Transportation (DOT) released three funding applications for competitive grant programs totaling nearly $6 billion in funding that reward jurisdictions that have put in place land-use policies to promote density and rural main street revitalization with higher scores in the grant process. Today, the Administration is announcing that DOT will continue to include language encouraging locally driven land use reform, density, rural main street revitalization, and transit-oriented development in BIL and other transportation discretionary grant programs.
Integrating affordable housing into DOT Programs. DOT will also issue updated program guidelines that increase financial support for Transportation Infrastructure Finance and Innovation Act (TIFIA) program projects that include residential development.
Including land use within the U.S. Economic Development Administration’s (EDA) investment priorities.EDA evaluates all project applications for its competitive grants to determine the extent to which they align with EDA’s investment priorities. EDA already includes transit-oriented and infill development within its “Environmentally-Sustainable Development” priority. Over the coming year and before its next round of grants, EDA will add language to its investment priorities to encourage economic development projects that enhance density in the vicinity of the development.
Thinking through how to optimize this office space in South Bend.
