Message From PD&R Leadership

Message From PD&R Leadership

To address the growing crisis of housing affordability, the Biden-Harris Administration has been working tirelessly to increase the supply of housing. Last year, the administration released the Housing Supply Action Plan with a set of agency actions designed to boost the supply of high-quality housing in communities nationwide by improving land use policies, expanding opportunities for federal financing, and reducing barriers to housing construction.

In this issue of Evidence Matters, we add another approach to expanding the supply of housing: the conversion of underutilized office buildings to residential use.

Office conversion can help to increase the supply of housing in neighborhoods where it is desperately needed, including neighborhoods with rich transit access and proximity to job centers.

Converting underutilized office space to residential use has additional benefits. The rise in office vacancies since the beginning of the COVID-19 pandemic has dramatically shifted the landscape of American downtowns. As many Americans continue to work from home, the market for downtown office space has shifted. Whereas downtown neighborhoods once offered lively, mixed-use communities, they often are underpopulated during the daytime hours and nearly vacant in the evenings. Businesses serving office workers, including restaurants and bars, often struggle to survive. Cities that rely on revenue from these commercial spaces are beginning to see the budgetary impact of the changing nature of urban downtowns.

Converting underutilized office space to residential use can both increase the supply of housing and reinvigorate America’s downtowns. With this issue of Evidence Matters, we detail research and case studies on the conversion of office space to residential use.

Cities nationwide have already taken bold steps to incentivize these conversions using tax abatements and other policy tools. In this issue, we highlight the work of Chicago’s LaSalle Street revitalization as a model of adaptive reuse. Building from the work of local community activists, city officials in Chicago launched the LaSalle Reimagined initiative to transform the neighborhood’s underutilized office space. Similarly, we point to the work of the Pittsburgh Downtown Conversion Program to convert aging commercial infrastructure in the downtown community. Acknowledging the enduring impact of the pandemic on the demand for downtown office space, the program is working with developers to incentivize conversions that include affordable housing.

In addition to these citywide examples, we highlight two individual projects — one from Baltimore and the other from Kansas City — that examine the financing of these conversions. Together, these case studies underscore how partnerships between local developers and governments aid in the conversion of these buildings.

As the Biden-Harris Administration works to increase the supply of affordable housing while acknowledging the realities of America’s downtowns, converting office buildings to residential use must be part of the conversation, and HUD is taking a leading role in these conversations. Ensuring that local policymakers have the tools and resources needed to maintain healthy downtowns and increase the supply of housing is essential to the future of American cities.

— Brian J. McCabe, Deputy Assistant Secretary for Policy Development