> Getting approval for funds would take 18 to 24 months. “In a typical real estate financing deal, you’re closing that loan within 60 to 90 days,” he says.<p>Who designs these programs? Yeah, what bank in their right mind would sit around for up to <i>2 years</i> (aka, <i>until the next administration</i>) to close on a loan? That's insanity!<p>The only orgs getting funding out of these programs are people <i>who already have tons of cash on hand</i>. So only existing real estate barons need apply.
There was an Odd Lots pod on this (from Bloomberg). Quite interesting. I didn't realize how many issues there are in the potential conversion from office to residential. A very small percentage of office builds can actually be converted.
Another reason (than the ones listed): it's physically hard. Office buildings have to be essentially gutted, new utilities designed (heat/cooling/light/power/access) and rebuilt. Not as hard as building a new shell, but still a big chunk to bite off. And probably not quick, it'll take months.
Existing programs appear too complex by focusing on "conversion". Government should just fund tear down of the existing office building and subsidize development of multi-family on these lots that had office prior.<p>The theoretical arguments against office conversion are overblown and too fixated on what the "perfect" or currently regulated apartment setup is... both of which are flexible. An apartment or condo doesn't have to be "ideal" to be viable.<p>But it is true that many don't know how or want to invest into figuring out how to do the conversions. Each project is unique and requires careful thought. Building multi-family on an empty lot is far simpler, and government can hand office lots to developers as if they were an empty lot.
I think I do not get the article point much... For me conversions can't work for two reasons:<p>- converting existing buildings is more expensive then create new residential areas from scratch, city density and original totally different design simply makes such conversions a crazy idea;<p>- even if some buildings get converted who might want to live in them? Before the masses have tasted and so learned the WFH model downtown was a place to be to have interesting jobs, now they start to be a place to stuff poor people in social housing setups. Let's say those who have no choice accept, what they do to live? There are not much factories of tertiary sector jobs in the modern city, only city-services related jobs, and there are more "service consumers" than "service operators", so there is a growing slice of people unable to find a job.
Sad that people will focus on the details of this problem but not step back and ask what incentives and macroeconomic conditions created the problem in the first place. We’ll get solutions that are worse than doing nothing, rinse repeat.
i have a fairly ill-informed question.<p>my sense is that office-to-residential just rarely makes sense. but could one change building codes so that, when new office buildings are constructed, they have to be designed to make a future residential conversion relatively cheaper and more feasible?<p>how much extra cost would this impose in the construction process? is it something that's relatively cheap/not that much downside, if only you plan ahead?<p>this solves no problems now but I am still curious about it.
I can't read the article (maybe someone can post an archive link?) but I wouldn't be surprised if there isn't some implicit sabotage built in.<p>Checking the rates per square foot for residential versus commercial (office) space in my area, residential is going about $2/sqft but commercial is $20/sqft. So in addition to the cost of conversion, the rents would have to be cut by an order of magnitude.<p>Since the banks are on both sides of this equation (they probably hold loans against the buildings people are looking to convert, and they'd be making new loans to finance the conversion) I'm sure there will be some foot-dragging because of increased risk and higher loan values and longer loan repayment terms.
Just another ill advised "solution" from this administration. What the drafters of this bill don't understand is you have a huge percentage of unlivable space in the middle of every floor(no windows!). There are building codes and one of the biggest is having windows in rooms. No city in America would allow that. In addition lets talk about plumbing, you need alot more plumbing going to each floor due to bathrooms(sinks, showers and bathtubs), and dishwashers and washing machines. Office space per floor has a fraction of this. Lets also talk about electricity and gas. Each "unit" would require gas and electricity needs which far exceed what is available in most commercial buildings. Having done extensive remodel work on houses I have owned there is a huge web of building codes that would prevent these comercial buildings from ever being converted to residential, I just can't imagine anyone in their right mind putting something like this forward.
If the Biden administration wanted to expand housing (lower housing cost) they would offer low interest loans to home builders and attach zoning-change strings to federal dollars given to states/municipalities.<p>But it's likely they don't really want to shake things up. High housing cost is primarily a problem in Blue districts, and Democrats hate losing asset value as much as anyone else.