The White House recently unveiled a fact sheet aimed at helping spur commercial-to-residential conversions.
As the affordable housing crisis continues to take center stage both nationally and in Maryland, the White House recently unveiled a fact sheet aimed at helping spur commercial-to-residential conversions. In the wake of the COVID-19 pandemic, the use of commercial office spaces dramatically plummeted, and the demand for residential units exploded. This dramatic market change has remained persistent, even as society has fully reopened and the federal government declared an end to the COVID-19 emergency. The high demand for residential units has led many commercial building owners and local governments to begin exploring converting these spaces to address the current affordable housing crisis.
The new White House Fact Sheet outlines several programs open to states, localities, and developers to help rethink and redesign their current commercial infrastructure. Highlighs include:
- Through the Better Buildings Initiative, DOE also launched a commercial to zero emissions housing toolkit that includes technical and financial guidance on how to achieve zero emissions commercial to residential conversions.
- A Commercial to Residential Federal Resources Guidebook with over 20 federal programs across six federal agencies that can be used to support conversions.
- Through the Better Buildings Initiative, DOE also launched a commercial to zero emissions housing toolkit that includes technical and financial guidance on how to achieve zero emissions commercial to residential conversions.
- Through the Better Buildings Initiative, DOE also launched a commercial to zero emissions housing toolkit that includes technical and financial guidance on how to achieve zero emissions commercial to residential conversions.
- USDOT’s new guidance to states, localities, and developers on how the Transportation Infrastructure Finance and Innovation Act (TIFIA) and Railroad Rehabilitation & Improvement Financing (RRIF) programs – which combined have over $35 billion in available lending capacity for transit-oriented development projects at below-market interest rates, can be used to finance housing development near transportation, including conversion projects.
- HUD’s updated notice on how the Community Development Block Grant fund can be used to boost housing supply – including the acquisition, rehabilitation, and conversion of commercial properties to residential uses and mixed-use development.
- The General Services Administration (GSA) will expand on its Good Neighbor Program to promote the sale of surplus federal properties that buyers could potentially redevelop for residential use.
Maryland’s counties have been feeling the impact of this shift. Downtown Baltimore has a 20% vacancy rate. Bethesda, in Montgomery County, has a 22.5% vacancy rate (and Montgomery more broadly stood at 20.5%). Neighboring Washington, D.C., is experiencing a similarly high 19.2% vacancy rate. The national average vacancy rate is 16.4%. Only a handful of urban areas, such as Columbia in Howard County (which has a 12.5% vacancy rate), are at or below the national average. Commercial-to-residential conversions offer a path to rethink of the communities we call home and revitalize struggling neighborhoods.
Read the MACo Deep Dive – Commercial Real Estate: Apocalypse or Opportunity?
