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NYC Converting Vacant Offices to Solve Housing Shortage

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In a bold move to tackle its housing shortage, New York City is unveiling a groundbreaking strategy that aims to transform vacant office spaces into up to 20,000 new housing units. This ambitious endeavor involves the establishment of a multi-agency task force, designed to assist developers in navigating regulatory obstacles, alongside rezoning a prominent section of Manhattan known as Midtown South.

The origins of this plan stem from Mayor Eric Adams and Governor Kathy Hochul’s endeavor to combat the state’s housing crisis, an initiative that encountered setbacks from fellow Democratic lawmakers in Albany earlier this year. While a significant portion of Adams’s vision hinges on state approval, the city is taking proactive steps to address its housing challenges head-on.

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However, during a press briefing on Thursday, Mayor Adams expressed his determination to move forward despite initial hurdles. “We could not just sit back and just lick our wounds,” Adams stated, highlighting the city’s resolve to take decisive action.

 

The proposal responds to a pressing issue faced by major US cities such as New York, Boston, and San Francisco – repurposing underutilized office buildings due to the remote work shift and addressing the escalating affordable housing crisis. However, the conversion of office spaces into housing units is a complex and costly process. To facilitate this transformation, city officials are considering measures such as tax incentives and streamlined approval procedures.

Central to New York City’s plan is an expansion of the scope for office-to-housing conversions. Office buildings constructed before 1990 would become eligible for repurposing into residential units, a notable update from the previous thresholds of 1961 and 1977, depending on the specific area. This expansion in eligibility could encompass an additional 136 million square feet of office space, equivalent to the office capacity of the entire city of Philadelphia. Moreover, the proposal aims to allow office-to-housing conversions in any zone within the city that permits residential construction, thus maximizing the potential for new housing development. In light of this transformative initiative, stakeholders in the real estate and construction sectors should also consider the impact on related services, such as competitive pricing for equipment hire. As the landscape of development projects evolves with the increased emphasis on repurposing office spaces into residences, ensuring access to cost-effective equipment becomes crucial for efficient and budget-friendly construction practices.

Bess Freedman, CEO of the real estate brokerage Brown Harris Stevens, voiced her support for the initiative, underscoring the city’s need for increased housing options. “We could definitely use more housing in the city,” Freedman commented during an appearance on Bloomberg Television. The novel Office Conversions Accelerator will comprise representatives from various city agencies, including the Department of Buildings, the Department of City Planning, and the Board of Standards and Appeals. This dedicated team will guide property owners through the conversion process, providing feasibility analysis and aiding in obtaining the necessary permits.

The proposal’s vision for Midtown South, a prominent area south of Times Square, envisions a dynamic mixed-use neighborhood between 23rd Street and 40th Street, bounded by Fifth Avenue and Eighth Avenue. Within this revitalized district, residential construction, including affordable housing, would be permitted in zones originally designated for manufacturing half a century ago. City officials acknowledge that securing state approval remains a pivotal step in materializing this transformative plan. Mayor Adams specifically called upon the state to institute tax incentives for office conversions, noting that the expiration of the 421-a tax incentive for affordable housing construction has left a void.

Mayor Adams emphasized the city’s commitment to pushing forward on multiple fronts. “We will do everything we can to get Albany to continue to move forward,” Adams stated, while underscoring the city’s simultaneous dedication to executing its own responsibilities.

As New York City takes these innovative steps to address its housing challenges, it serves as a trailblazer in finding creative solutions to the urban housing crisis that many major cities across the US are grappling with.

source: bloomberg.com

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