Biden Administration Announces New Actions for Converting Commercial Properties to Residential Use to Increase Housing Supply

The Biden administration announced on October 27 new actions to support the conversion of high-vacancy commercial buildings to residential buildings, including through new financing, technical assistance, and the sale of federal properties.

“Office and commercial vacancies across the country are affecting urban downtowns and rural main streets,” said the administration in a press release addressing the new actions. “At the same time, the country has struggled for decades with a shortage of affordable housing units, which is driving up rental costs, and communities are seeking new ways to cut emissions, especially from existing buildings and transportation.”

The announcement includes several administrative actions:

  • The U.S. Department of Transportation (DOT) will release guidance on how the “Transportation Infrastructure Finance and Innovation Act” (TIFIA) and Railroad Rehabilitation and Improvement Financing (RRIF) programs can be used to finance housing development near transportation, including conversion projects.
  • DOT will release additional guidance on how transit agencies can repurpose properties for transit-oriented development and affordable housing projects, including conversions near transit. Under the new guidance, transit agencies can transfer properties to local governments, as well as non-profit and for-profit affordable housing developers, at no cost.
  • HUD will release an updated notice on how communities can use Community Development Block Grant (CDBG) funding for affordable housing, including for acquiring, rehabilitating, and converting commercial properties to residential and mixed-use properties.
  • The General Services Administration (GSA) will expand its Good Neighbor Program to promote the sale of surplus federal properties that can be redeveloped by buyers as residential units.
  • The White House released a guidebook, Commercial to Residential Conversions, highlighting over 20 federal programs across six agencies that can be used to support commercial-to-residential conversions. The White House will also hold training workshops on how to use these programs for conversions.
  • The U.S. Department of Energy (DOE) released a Supporting Commercial to Zero Emissions Housing Toolkit that includes technical and financial guidance on achieving zero emissions conversions.
  • The U.S. Department of the Treasury is highlighting tax incentives for builders of multifamily housing, including resources available through the “Inflation Reduction Act.”

These actions are the latest initiatives from the White House Housing Supply Action Plan, which aims to provide the resources and technical assistance needed to lower housing costs, boost housing supply, and promote fair housing (see Memo, 6/1/22).