Posted on 10/30/2023 9:39:28 PM PDT by SeekAndFind
Questions abound. Assume you can convert offices into homes, who wants to live in them? Is a tear-down cheaper?
To ease the housing crisis, White House Opens $45 Billion in Federal Funds to Convert Offices Into Homes
Taking aim at the nation’s housing crisis, the White House kicked off a multiagency push on Friday to help real-estate developers convert more office buildings emptied by the pandemic into affordable housing.
The initiative aims to harness $35 billion in low-cost loans already available through the Transportation Department to fund housing developments near transit hubs, folding the initiative into the Biden administration’s clean-energy push.
It also opens up additional funding sources and tax incentives and offers a new guide to 20 federal programs that developers can tap and that offers technical assistance in what can be tricky and expensive conversions.
A third part of the program will see the federal government draw up a public list of buildings it owns that could be made available for sale to help bolster development.
The federal government owns about 1,500 office buildings nationally and had leases on almost 200 million square feet of additional space as of April, according to Barclays analysts, who said in a recent report that much of that office space was underused.
Also consider San Francisco’s push to turn office buildings into homes hinges on this simple idea
“Hope is not a strategy,” said Nick Romito, co-founder and CEO of VTS, a leasing and asset-management data company. “The hope that if you convert it, they will come —well, a lot depends on where that building is.”
While New York City’s downtown financial district is home to a number of successful office-to-residential conversions, it also takes a vibrant neighborhood, with bustling cafés, grocery stores and more.
“That is not the same for San Francisco,” Romito said. “The infrastructure and the cost of converting a building — that’s part of it,” he said. “But I’d be more concerned about, even if you can convert it, who wants to live there?”
“What’s cheaper?” Romito said. “Is it cheaper to add amenities in maybe a zombie building, add a floor or two, to create a better experience? Or is it cheaper to knock the entire building down, rebuild something else, and pray to God you lease it?”
Warren Wachsberger, CEO of Aecom Capital, a subsidiary of Aecom ACM, said revamping old office buildings isn’t that simple. “Less than 1% of all apartment units underway, being built nationally, are office-to-residential conversions, despite everybody’s love affair with them,” Wachsberger said, speaking from Los Angeles.
“Many buildings probably won’t work,” Wachsberger said, observing that thick, concrete office floorplates often need to be drilled through and plumbing and heating systems overhauled, with local building codes adding to the headache.
“It’s a lot easier and cheaper to demolish it and start over from scratch,” he said. “That means buying buildings essentially at the cost of land.”
Wachsberger said hopes for an expansion of an office-to-residential conversion effort in Los Angeles in the 2000s likely hinge on incentives for developers and the buildings being in places where people wanted to work, eat, live and shop. “Until that’s able to come back, it’s difficult to create the vibrancy that was there prepandemic,” he said.
I had to read that article twice to find the simple idea mentioned in the headline. The article never really explained. But I believe It’s in that last paragraph above: Incentives and free money from governments.
With enough subsidies, developers will try nearly anything. Then when the projects fail, the developers ask for more money.
What the heck does this have to do with clean energy?
The answer is clearly nothing. Nonetheless, $45 billion is siphoned from the Biden administration’s clean-energy push.
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.
Please note Biden’s Green Energy Inflation Reduction Act Needs a Big Bailout Already
Surprise, surprise. Subsidies were not enough to make Biden’s energy projects profitable.The Inflation Reduction Act (IRA) includes hundreds of billions of dollars in subsidies for green energy, yet now renewable developers want utility rate-payers in New York and other states to bail them out.
According to a report late last month by the New York State Energy Research and Development Authority (Nyserda), large offshore wind developers are asking for an average 48% price adjustment in their contracts to cover rising costs. The Alliance for Clean Energy NY is also requesting an average 64% price increase on 86 solar and wind projects.
Supposedly, this office conversion idea will only cost $45 billion.
I assume it will eventually cost $450 billion minimum by the time Biden finishes. He is guaranteed to add subsidized low income, clean energy, free electric heat, and free child care into the mix.
Soviet style flats at 450k incoming!
Simple...make them rent-free for ten years and you have...
1. Bums
2. Homeless
3. Druggies
4. Illegal invaders
Especially if maid service, fresh linens, daily new fresh cut flowers, laundry service, drug and booze delivery, and three squares a day are included at no cost.
Reconstruction contracts likely to be awarded to the highest bidder, like usual.
Bus illegals to Rehobeth.
hahahaha
Yup.
Government solutions.
It’s really easy to spend other people’s money when you don’t have to get the approval of the Legislature.
Since the offices are empty due to business failures, where are the inmates going to WORK? Oh, right. Their only job will be to vote Democrat. Five or six times.
Sounds like a cut-rate Cabrini Green to me.
Much better to convert that $45B to ammo and ship it to Ukraine.
Cabrini Green New Deal
One has to think over this idea for a while. Empty office-buildings to be re-used?
So why are the buildings unused? Companies see no value to maintain them...since going to a smaller footprint and using home-office strategies.
Negatives here? You purchase and renovate for apartment-like homes...when there are no jobs in these locations (SF, LA, NYC, etc). I would imagine the renovation cost per unit to be greater than $250,000 per unit (you’ve already got high union cost in these urban locations).
In the end, you have some junkie in SF that you give a unit that is valued at $300,000....that $200,000 of renovation was poured into. Half-a-million spent on this and it’s turned into a ghetto within five to ten years.
Reason to go this path? Real estate owners are holding onto properties that are now worthless, and it’s a favor for the gov’t to buy their property at top-dollar.
But it's the real estate developers (oligarchs?) who are lobbying for these "Soviet style flats."
If we had a free market, developers would convert these buildings at their own expense, then sell them at market rates.
Instead, as with Big Pharma, we have Big Real Estate demanding the government buy its product. Then these apartments will be distributed to the people for "free" or at subsidized rates.
“who wants to live in them”
When the government is paying the bills after illegally entering the nation, there will be plenty of illegal turd worlders.
From
In the federal government’s 2015 fiscal year, agencies reported more than 7,000 excess or underutilized properties, according to the Government Accountability Office.
https://www.nytimes.com/2021/09/14/business/sale-surplus-federal-buildings.html
The Projects II
If the Feds gave up the 200,000,000 million square feet they do not need and converted that real estate to 1,000 square foot apartments, there would be an additional 200,000 domiciles available for living space or if the average were 650 square feet, there would be some 300,000 new homes available that would create additional tax revenue and add to GDP for services that support new neighborhoods
Preferences tor BIPOC and female (if that’s still a thing) owned companies, I presume.
$45 billion subsidy for Friends of Brandon.
Absolutely! Priorities, don’t you know.
smells like a bailout
I have started calling Biden, Moby. He is just a big white D@#k
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.