More Cities Giving Away Money For Office-To-Resi Projects As Threat Of Obsolescence Grows
April 12, 2023 | Olivia Lueckemeyer | Bisnow
Falling tax revenue. Aging downtowns losing their vitality. Record office vacancy. A housing crisis. One strategy could tackle all of these problems in one fell swoop: a wave of office-to-residential conversions.
Developers are interested, and the opportunities are there, with hundreds of millions of square feet of office identified throughout the country as potentially feasible for conversion. But the cost to do these projects is too often prohibitive, and completed projects have been limited.
Cities and states are starting to do something about it. Incentives aimed at encouraging office-to-residential conversions are gaining traction.
From Chicago, which will make at least $197M in tax increment financing dollars available to developers willing to convert old buildings to multifamily units, to a $400M program in California and a $2.5M tax abatement scheme in Washington, D.C., meant to achieve the same end, cities and states in the U.S. and beyond have introduced programs at the behest of developers who say the math doesn’t work without public funds.
