Cuomo Pledges Proposed Legislation to Convert Commercial Space into Housing

In his 11th State of the State address, Governor Cuomo proposed legislation that would open a five-year window for the conversion of office buildings and hotels into residential use. "The housing problem in our cities has gotten worse. But the crisis of growing vacancies in our commercial property provides an opportunity," Cuomo said. "We should convert vacant commercial space to supportive and affordable housing and we should do it now."

This idea to convert vacant office spaces to housing has been supported by the Real Estate Board of New York. The pandemic has forced many office spaces to shut down and companies are reconsidering how much space they really need moving forward. The office-to-housing conversion idea was inspired by what happened in Lower Manhattan in the early 1990s. The area was then dominated by office buildings, and many were struggling, with vacancy rates around 25 percent. As a result, the state and city created a tax exemption and abatement program to facilitate the conversion of older office buildings into residential uses. In the area of Lower Manhattan, approximately 25,000 residential units were added due to incentive changes brought on by the 421-g tax incentive program.

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