Insight: Zoning/tax exemptions could expedite DTSJ office-to-residential conversions

Edward Hopper: Office in a Small City, 1953. Image by Peter E

Practically speaking, transforming empty offices into apartments is not a simple task; local developers are paying through the nose to complete projects in areas like Downtown SJ. On top of that, add tax and regulatory barriers like CEQA and stringent zoning codes. NPR's Erin Kenney says that to incentivize sustainable construction, jurisdictions should consider zoning/tax allowances.

City centers are struggling to fill the gap left by commuters who now come into the office a few days a week, if at all. These workers were patrons of downtown businesses, from restaurants to dry cleaners. Without them, offices are desolate and businesses are shuttering.

To save these downtowns, cities are trying to turn unused office space into housing. San Francisco officials are making efforts to adjust current building codes and get rid of extra fees for office-to-residential projects. In Washington, D.C., the mayor wants to put more money into a tax relief program for office conversions....

Converting an office building into a residential space can be difficult, and that's when the building already has the right structure to work with. A lot of buildings don't — they're too wide, or have the wrong kind of windows, which makes conversion more expensive. But politics may be a greater factor in a project's success.

Even as cities try to entice developers to turn office buildings into apartments, they've also put up obstacles. In New York, strict zoning rules already impact which buildings — and in some cases, how many floors — can be converted into housing. Rezoning a property for residential use can be timely and costly. Alderman said approval also requires support from politicians, who often add requirements for affordable housing a developer may be unable to afford.

Right now, many developers in New York are adjusting after the expiration of a state tax exemption for builders who include affordable housing in their projects. The exemption played a large role in multifamily housing construction in the city. According to a study from NYU's Furman Center, 70% of multifamily properties built from 2010-2020 took advantage of the tax exemption.

This article originally appeared in the National Public Radio. Read the whole thing here.

Related:

• Local adaptive reuse expert: When office-to-residential conversions aren't possible—how SJ/SF can reactivate decaying downtowns

• Could Silicon Valley’s unused offices be repurposed for homeless citizens?

• New CA bill “a hopeful sign” that strict zoning codes are becoming artifacts of the past

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