The federal government is going back to the future to help reduce housing costs, slow global warming and make better use of the one billion square feet of vacant office space left by the Covid-19 pandemic — by converting it to dense, transit-oriented urban housing.
On Thursday, the Biden Administration announced several initiatives to spur commercial-to-residential conversions and transit-oriented building with new housing finance policies and assistance for local and state governments to get grants.
Perhaps what's most unique about Thursday's housing announcement, though, is that Transportation Secretary Pete Buttigieg made it. Alongside with Housing and Urban Development and the General Services Administration, the Biden administration will give the Department of Transportation a leading role to better deploy $35 billion in lending capacity from both the Transportation Infrastructure Finance and Innovation Act and the Railroad Rehabilitation & Improvement Financing to promote TOD at below-market rates.
Both of these programs fall under the DOT’s purview and could help finance conversion projects near transit. Crucially, the DOT is releasing guidance to help transit agencies to transfer properties to public or private developers at no cost.
“These downtown central business districts that we're talking about today are often already designed and oriented around public transit," Buttigieg told reporters in a conference call. “Our intention is to make the most of this opportunity to add more housing near transit in ways that not only reduce the cost of housing, but also often reduce the cost of transportation. And the cost of transportation is often the second biggest cost for low-income Americans, second only to housing itself.”
Buttigeig said the DOT will have a three-prong role: First, the DOT is releasing guidance to help state and local governments wield TIFIA and RRIF funds to build housing conversions using below-market financing. To assist, the department will offer technical assistance to navigate to those financing opportunities. Perhaps most important, Buttigieg said that the department will “make it easier for transit agencies to transfer properties that are no longer needed for direct transit purposes,” citing underutilized storage facilities as an example.
A White House press release said that these policies will build on the Housing Action Plan introduced last May, adding that lowering the cost of living, easing access to good jobs, and reducing pollution are “key tenets of Bidenomics.”
“We know that commercial building vacancies are at an all-time high in some cities and communities across the country, while housing supply in those same communities remains constrained,” added White House National Economic Council Director Lael Brainard during the press briefing.
Buttigieg concluded the brief presser on a big picture note. “We should also include the meaningful reductions in pollution that can come from good transit oriented development,” he said.
After the word got out about the federal announcement, union groups and builders hailed the news.
"The White House's plan to support office-to-residential conversions with an eye toward Transit Oriented Development is a much-needed shot in the arm for the dual housing and affordability crises plaguing New York," said Carlo A. Scissura, president and CEO of the NY Building Congress."
