Incentives offered to convert office buildings into apartments
Thoughts on changing zoning and urban planning rules.
Mayors in East Coast cities of New York are relaxing zoning rules that can stand in the way of converting buildings from offices to residences, and in some cases, offering generous tax incentives to developers who build new homes.
In New York, a task force of planners convened by Mayor Eric Adams is studying the effects of zoning changes and potential tax breaks for real estate developers that include affordable housing units in developments that involve reusing existing buildings in downtown areas.
There have been similar moves in the past by cities like Philadelphia to revitalize their downtowns, with homeowners and investors receiving more than $1 billion in tax breaks for their renovation projects. According to CBRE in the US from 2000 to the last quarter of 2022, about 498 existing mixed-use buildings have been "transformed", creating 49,390 new homes by a small group of developers.
Majors Societe Generale and KKR have partnered with real estate developers such as Philadelphia-based Post Brothers to finance office conversions in expensive central business districts.
Local governments are already rolling out changes to zoning laws and zoning codes to facilitate these conversions.