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.
I work with building codes and permitting most days.
To try to convert ten to thirty year old office buildings into low income housing will not work.
Let’s look at one tiny aspect first. Electricity. Any major redesign will need to comply with new electrical codes and new building codes. That means all AFCI and GFCI electrical circuits or outlets. All the lighting will need to be converted to mostly LED lamps to get the kw per square foot lighting loads down to meet building codes. Each “housing unit” will need 240 volt stoves, electric dryers, and water heaters, probably all separately metered (shared electric heat or electric hot water needs to be separately metered in the name of conservation under current codes and natural gas is not considered green).
If that is not enough how does one get enough plumbing into existing concrete/brick walled buildings so that each “housing unit” has enough bathrooms, kitchens, etc.? Most office building floors do not have shower facilities, or enough toilets or kitchen sinks, garbage disposals, etc. to handle a typical number of housing units on a per 100 square foot basis. Offices use far less plumbing and electrical infrastructure.
And let’s not even bring up HVAC.
It is not going to work unless the new low income housing is “traditional slum lord” substandard housing were bathrooms, kitchens, and heating and cooling systems often don’t work. But the federal government could never structure an entitlement program around a slum lord model.
Keep them in the cities … that’s all I ask
Better even yet is ship the illegals to the Ukraine for cannon fonder.
Turn them into psych hospitals and detox/addiction treatment facilities. Way more effective.
Five to ten years? Much faster than that!
The pressure on cities to house bums, druggies, and invaders is intense. Have you seen the pics of what they do to upscale hotel rooms? They are ruined in WEEKS.
Then who pays for the rent?
It was reported the other day here that 80% of federal office space is ‘unoccupied’.
All this demonstrates is the federal government’s incredible ability to waste $$.
“Then who pays for the rent?”
Do you have a mirror handy?
In the good old days, poverty was concentrated in places like Cabrini-Green instead of being pushed out into the suburbs like today.
This is simply the beginning bailout of the collapsing commercial loan industry.
I always wondered why empty high rises downtown were not turned into apts/condos. If no developer wanted to do it the reason is obvious. Now that Biden makes $45 billion of our hard earned pay available, you know it won’t work out financially.
More money for BLUE corrupt Democrat cities.
These will be turned into high-rise slums.
I see developers are now turning old shopping malls into part condo/apartments. Many people no longer go to malls to be harassed by the yute thuggery and "helped" in stores by Green haired tatted up nosed ringed kids on their cell phones pretending to work.
“I see you’ve applied to move into one of our newly renovated apartments. Since you’re a white person, we will need your social media posting history, your voting history and a picture of any stickers you currently have on your car. We can’t have just any riff-raff moving in here.”
I suspect some city tax-revenue people will argue that if you give up on office space...you will never get the ultimate tax revenue level back.
Another argument (particularly in SF)...what little commerce you have left, if they know what your plan is...massive shut-down of grocery/store-fronts will start up. You might find a 20-block circle where no coffee shop or grocery exists near a designed ghetto section.
All you are designing is a release for the stupid owners or banks left holding the non-use office building or hotel.
First, stop digging. Close the border.
His next idea will be caves due to global warming.
Got to have a front for every scam
Questions abound. Assume you can convert offices into homes, who wants to live in them? Is a tear-down cheaper?
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No, DO NOT ASSUME you can convert offices into homes!
As a developer/builder for 50 years this is another Democratic Party/Federal Government boondoggle.
Yes, people can live in tents and under bridges but spending money on converting an office building to “apartment homes” is “economically” impossible.
I could write a book on how this fantasy will not work! In shear stupidity, the idea rivals the 80 billion in equipment left in Afghanistan (by democrats) and the 15 billion thrown away on Littoral Combat Ships and the Federal Government boondoggle list is endless. Rise up and wake up people!
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