Posted on 11/10/2023 8:16:30 AM PST by Kaiser8408a
Has anyone considered the impact of Biden/Mayorkas’s open southern border with Mexico? Other than the crime, stress on existing services like healthcare, schools and Social Security. But where will the 8 million illegal immigrants reside? Well. the Biden Administration has an answer: throw money at it! This time, $45 billion to convert empty office space to homes. Not just for illegals, but for anyone.
Conversion from office space to apartments is getting harder. Let’s discuss why, and also what the effort is really all about.
Only 3,575 apartment units were converted from office space last year. The already fraught process now faces even more challenges.
The Wall Street Journal explains why in its report Turning Empty Offices Into Apartments Is Getting Even Harder
Cities hoping to convert emptying office buildings into apartments are running into financing issues, stagnating rental markets and other challenges that are bottling up their efforts.
Developers last year created just 3,575 apartment units in the U.S. through office conversions, according to an analysis by rental listing site RentCafe. That amounts to less than 1% of all apartments built that year through new construction.
Federal and local governments are also trying to give conversions a boost. The White House said last month that it was updating guidance for existing grants and spending programs to make billions in federal dollars available for these projects. It also said it would seek the conversion of more government-owned properties into housing.
Some cities, such as Washington, D.C., New York and San Francisco, are also taking steps to encourage more conversions. Tax incentives and faster approvals are “rocket fuel” for these projects, said Sheila Botting, a principal at commercial property brokerage Avison Young.
Even so, the process has always been fraught with difficulty and few office buildings are natural candidates. Conversions are easiest in older, lower-quality and mostly empty buildings with small floors. But less than 1% of office space in the biggest U.S. cities ticks those boxes, according to Avison Young.
In significant ways, the conversion process is getting even harder now. Slowing rent growth might make apartment conversions less attractive to investors, if the trend persists into next year. Asking rents for apartments have fallen 1.2% nationally over the past 12 months, according to rentals website Apartment List.
Projects Not Economical
Without massive subsidies these projects are not economically feasible. Many aren’t even with massive subsidies.
In downtown Dallas, developer Wolfe Investments seeks to convert an 18-story, 1950s office tower into residential apartments, but has recently been fighting off foreclosure from its lender, Thistle Creek Partners, court records show.
Developers of One Camelback, a 200,000-square-foot office building in central Phoenix, are trying to convert it into what would be one of the city’s most expensive rental-apartment properties. A website advertises $8,000-a-month apartments, with floor-to-ceiling windows and crystal-clear views of nearby mountains.
But the developers, Sagamore Capital and partners defaulted on a loan of about $70 million. The project’s lender, Delphi Financial Group, has moved to foreclose. An auction of One Camelback is set for later this month, according to documents filed in Maricopa County, Ariz.
Biden Throws $45 Billion in Federal Funds to Convert Offices into Homes
On October 29, Mish (Mike Shedlock) commented Biden Throws $45 Billion in Federal Funds to Convert Offices into Homes
Questions abound. Assume you can convert offices into homes, who wants to live in them? Is a tear down cheaper?
The government has 1,500 office buildings nationally and leases on almost 200 million square feet of additional space that it does not need. Instead of canceling leases and selling the real estate, it’s going to convert them into clean energy spaces.
With enough subsidies, developers will try nearly anything. Then when the projects fail, the developers ask for more money.
How is this Being Paid For?
Taxpayers of course. But Biden is funneling $45 billion from clean energy incentives in the ridiculously named Inflation Reduction Act (IRA) into housing conversions.
You might also be wondering what this has to do with clean energy, and the answer is nothing. The questions keep piling up and I have answers.
What’s Really Going On Here?
Biden is hoping to spread the IRA dollars around to buy more votes.
But to do so, he is taking money away from his other pet projects to fund the idea of the moment. His idea of the moment is to do something about the price of rent.
According to RentCafe, Washington DC had two zip codes that led the nation in apartments completed in the last five years (up to 2022).
Why is the private sector doing so few conversions? THAT is the right question. The answer? Office-to-housing conversion is hard and the demand may not be there. But with 8 million illegal immigrants having crossed the border, Biden has to do something. So Biden steps in with $45 billion to convert empty office space to homes. And I have to ask: is this a shadow wealth transfer to large Democrat-controlled cities as an apology for the havoc caused by Biden/Mayorkas open border policy?? Just asking!
So if an idea is really bad and won’t work, like solar power in areas with limited/spotty sunlight or wind turbines in areas with little/sporadic wind, Federal and State governments are always on stand-by to do something really stupid. Like rent control, which creates even worse distortions.
Hello?
WE are the (Neo) Marxists now.
Wouldn’t it just be cheaper to fly them all back home?
Need housing for the freeloaders? Empty the UN building and turn it into apartments. Empty all of the publik screwals and turn them into apartments and finally, turn all Starbucks into “tiny houses” for the younger freeloaders.
If every Federal Employee was required to take 4 into their homes to care for and feed, it would be a good start.
Office-to-housing conversion is hard and the demand may not be there. But with 8 million illegals pouring across the “secure border,” Biden has to do something. So he stupidly throws money at the problem; $45 billion tax dollars (less 10%) to convert empty office space to homes.
And I have to ask: is this Biden pipe dream a shadow wealth transfer to failing Democrat-controlled cities as his woebegone apology for the havoc caused by his open border policy?
Just asking!
Some govt brainstorms are really bad and don’t work,
<><>like solar power in areas with limited/spotty sunlight
<><>wind turbines in areas with little/sporadic wind,
<><>offshore wind farms that kill animal life.
Federal and State governments are always on stand-by to do something really stupid that looks great on paper. Like rent control, which creates even worse distortions.
Back to the 60s and the housing projects.
It’s tough trying to come up with 8 million instant “american dreams” for your 8 million freeloader, banana boater voters.
Anyone see the obvious flaw in this wishful thinking?
These were once units for gainfully employed people.
Now, spaces for people who couldn’t afford even subsided rent.
Obvious meaning anyone not working for the federal government, that is.
“The center will not hold”
The money is there simply to feed political campaigns and enrich family members. It is designed to be skimmed, like all Ukraine $$.
They could be made like a Hotel F1 with shared bathroom facilities.
This would be a lot cheaper.
“ut with 8 million illegals pouring across the “secure border,” Biden has to do something.”
We are currently fighting the thousands of “low income” rental units that are being planned for our suburban/rural area. Mind you that we have no infrastructure, buses or stores within walking distance of the planned invasion. This is a very nice mixed area of high priced homes, parks and condos.
It is going to look like a ******** one these units are built if we can’t get it stopped.
There must be a reason why NYC apartments are expensive.
Why would any new NYC living space ever be expected to be cheap?
If such space could be cheap, why would people pay dearly for a NYC apartment?
One of the cost/feasibility issues is that plumbing is limited in office buildings mostly to only where restrooms are on the a floor. That leaves most of a large office building floor without plumbing while most of the floor would have to be divided up into multiple apartments, needing kitchens and bathrooms. An office building generally has to be “re-plumbed” for conversion to apartments.
An easier conversion is coverting former mall stores/space to offices. There was some good beginnings of that until the covid lockdowns and increases in “remote work” slowed it down.
You have my utmost sympathy.
Because they don’t make economic sense....
I like it. Then the libs can deal with the problems of 24 year olds attending their local high schools and trying to pick up on the teenage girls.
The rights of citizens in the community are ignored. Think Brazil as our future.
Biden that!
BUYEM a bus ticket!
Yep, and heating/cooling for each apartment seems like it would be a challenge as well.
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