Mayor Unveils Plans to Convert Office Space into Apartments

Mayor Eric Adams recently released details of a plan to facilitate the conversion of underused office space into new housing. The plan’s recommendations were made by the Office Adaptive Reuse Task Force, led by NYC Department of City Planning (DCP) Director Dan Garodnick. The task force was convened by the Adams administration in July 2022 following Local Law 43 of 2022.

According to the New York City Office Adaptive Reuse Study, office conversions could potentially create as many as 20,000 homes in the next decade, enough to house up to 40,000 New Yorkers. “With this study, we have a roadmap to deliver on a vision for a more vibrant, resilient, prosperous, and affordable city,” said Mayor Adams. “The need for housing is desperate, and the opportunity offered by underused office space is clear — we know what we need to do. These concrete reforms would clear red tape and create the incentives to create the housing we need for New Yorkers at all income levels.”

The context: The study outlines a path forward to deliver on goals outlined in “‘New’ New York: Making New York Work for Everyone,” an action plan released in December by Mayor Adams and New York Governor Kathy Hochul. It also builds on Mayor Adam’s “Get Stuff Built,” “City of Yes,” and “Housing Our Neighbors” plans, which include significant steps to tackle the city’s severe housing shortage. Increasing opportunities to repurpose underused office space for housing and other uses is critical to achieving those goals.

The plan’s intent is to reduce barriers and facilitate the process of turning empty offices into new apartments to help relieve New York City’s affordable housing crunch should property owners decide to convert their buildings. Remote work has drastically reduced the use of office space throughout New York City. The task force’s study found that employees come to the office less than half as often as they did before the COVID pandemic, and about 20 percent of Manhattan offices were available to rent in the second half of 2022—up from 10 percent in 2019.

One level deeper: It remains to be seen whether building owners in the targeted commercial districts will decide to convert their buildings. Prior plans to turn empty hotels into apartments have stalled despite widespread support and the state setting aside $200 million to encourage developers to convert these hotels into housing.

The Office Adaptive Reuse Task Force’s recommendations include:

• Expanding the universe of office buildings with the most flexible regulations for conversion to residential use from buildings constructed through 1961 to those constructed through 1990 — easing the potential conversion process for an additional 120 million square feet of office space;
• Expanding flexible conversion regulations to all high-intensity office districts, including Downtown Flushing and the Bronx Hub — easing the potential conversion process for an additional 16 million square feet of office space;
• Finding opportunities to allow housing, whether through conversions or new construction, in a centrally located, high-density part of Midtown that currently prohibits residential development;
• Allowing office buildings to convert to various much-needed types of housing, including supportive housing;
• Providing flexibility for offices to convert all existing space into housing, eliminating limitations that incentivize only partial conversions or make conversion projects infeasible;
• Exploring and pursuing a tax incentive program to support the production of affordable and mixed-income housing through office conversions — adding to the city’s affordable housing stock without deterring other private investment in conversions and housing creation; and
• Creating a property tax abatement program to incentivize retrofitting office space for child care centers, building on Mayor Adams’ “Accessible, Equitable, High-Quality, Affordable: A Blueprint for Child Care & Early Childhood Education in New York City.”

These recommended reforms would be implemented via changes to state law and regulatory changes through a city zoning text amendment.