White House unveils strategy to increase commercial-to-residential property conversions.
The White House Takes Action to Address Housing Affordability
The White House has unveiled new measures to support the conversion of commercial buildings into residential properties, as part of a broader initiative to tackle the issue of housing affordability. Administration officials have highlighted the high vacancy rates in office spaces and the scarcity of affordable housing as key factors driving this decision. The Biden administration aims to leverage this imbalance to increase the supply of housing units.
Boosting Economic Growth Despite High Interest Rates
During a press call, National Economic Council Director Lael Brainard emphasized that this latest initiative will involve utilizing resources from various government departments to address the housing affordability challenge and encourage the conversion of commercial properties into residential spaces.
“We recognize that some cities and communities across the country are experiencing record-high vacancies in commercial buildings, while facing a shortage of housing supply. This presents an opportunity to not only increase housing availability but also revitalize main streets,” said Brainard.
The Department of Transportation, led by Secretary Pete Buttigieg, has also announced expanded federal financing options for housing development near transit hubs. Brainard stated that the Transportation Department will issue guidance to facilitate the construction of housing near transit, with programs offering a combined lending capacity of $35 billion.
The Department of Housing and Urban Development has released new guidance on how existing funding can be utilized to address the housing situation. The White House explained in a fact sheet that the Community Development Block Grant fund, which has received $10 billion in allocation during this administration, can be used to boost housing supply through the acquisition, rehabilitation, and conversion of commercial properties into residential and mixed-use developments.
Buttigieg highlighted that some localities, such as Washington, D.C., and New York, have already taken independent steps to convert unused commercial office spaces into residential units. The Biden-Harris administration aims to support and advance these efforts to increase housing supply and reduce housing costs.
“Many downtowns and central business districts are already designed around public transit, making them ideal for our department to provide support. We are committed to helping these areas thrive,” said Buttigieg.
Mayor Muriel Bowser of Washington, D.C., has been actively pushing for the rezoning of office-only districts to allow for more mixed-use properties. Bowser’s goal is to convert unused office spaces into residential units and bring 15,000 residents into downtown Washington, D.C.
According to data from Yardi Matrix, Washington, D.C., saw the highest number of office-to-apartment conversions in the country between 2020 and 2021, with 1,565 new units. Philadelphia and Chicago also experienced significant conversions during that period.
In addition to the recent announcement, the White House has released a fact sheet outlining additional efforts to promote homeownership. This includes a Federal Housing Administration policy that allows prospective borrowers to count income from renting out accessory dwelling units towards qualifying for an FHA mortgage.
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How can the conversion of commercial buildings into residential properties support the goal of increasing housing supply?
Nding can be used to support the conversion of commercial buildings into residential properties. This guidance will provide clarity and flexibility for local communities to utilize resources effectively for housing development.
Tackling Affordability and Increasing Housing Supply
The Biden administration recognizes the urgent need to address housing affordability in the United States. The skyrocketing prices of housing are putting an increasing burden on Americans, especially low-income individuals and families. By repurposing underutilized commercial spaces, the administration aims to increase the supply of affordable housing units. This will help alleviate the housing crisis and provide more opportunities for individuals and families to find safe and affordable homes.
However, the conversion of commercial buildings into residential properties comes with its own set of challenges. To address these challenges, the White House has proposed tax credits and grants to support the development of affordable housing. These incentives will encourage private developers to invest in the conversion of commercial properties and create more affordable housing options for communities across the country.
Revitalizing Main Streets and Promoting Economic Growth
In addition to addressing the issue of housing affordability, the White House’s initiative also aims to revitalize main streets in cities and communities. The conversion of vacant commercial buildings into residential spaces will not only increase housing availability but also bring life back to downtown areas. This will have a positive impact on local businesses and contribute to economic growth in these communities.
Moreover, the Department of Transportation’s expanded federal financing options for housing development near transit hubs will further contribute to economic growth and accessibility. By providing convenient housing options near public transportation, individuals will have easier access to employment opportunities and essential services, reducing the need for long commutes and improving overall quality of life.
A Comprehensive Approach to Housing Affordability
The White House’s measures to address housing affordability demonstrate a comprehensive approach to tackling this pressing issue. By leveraging the availability of vacant commercial buildings and providing incentives for their conversion into residential properties, the administration aims to increase the supply of affordable housing units. This, in turn, will alleviate the burden on families struggling with high housing costs and contribute to economic growth and revitalized communities.
As the administration continues to implement these measures, it is crucial for local communities, private developers, and government agencies to work together to ensure the success of this initiative. By collaborating and leveraging the resources available, we can make meaningful progress in addressing the problem of housing affordability and creating a more equitable and inclusive society for all Americans.
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