This Shocking Fact Might Be the Secret to Solving the Housing Crisis
Currently, thousands of Americans are struggling to find affordable housing. With real estate prices far outpacing inflation or wage growth, many people are being priced out of home ownership. Even renters are facing challenges, as more and more affordable housing is converted into pricey luxury apartments. Harvard Business Review has recently discovered a potential solution to this problem.
45,000 Public Buildings Are Currently Unoccupied
Did you know that there are a shocking 45,000 publicly owned buildings that are underused? The United States government owns many buildings that used to be schools, offices, research facilities, and more. However, many of these are now fully or partially empty.
Government buildings get abandoned as things move online or new facilities are built. As political focus shifts, government offices often get removed from a region and shifted to another. This has led to hundreds of thousands of square footage that is just sitting around entirely unused. Some of these empty buildings may have cultural or historic value, but often, they are just standard office space with little use to the government anymore.
Turning Public Buildings Into Housing Is Beneficial for Everyone
Harvard Business Review has recently published a clever solution for how to handle all this underutilized real estate. Real estate expert Sheila Botting suggests that the government sell these properties to companies that can provide affordable housing. This idea could be beneficial to all sorts of public and private entities.
For governments, the big benefit is budgetary. A lot of local and federal departments are severely underfunded. Instead of having to keep paying for upkeep on these unused properties, they could sell them to make a profit. For example, in Ontario, the government made $120 million selling surplus properties, and they also save $10 million on operating expenses each year now. There is also the possibility of the government retaining ownership and converting the property to housing themselves. This could ease financial pressures on certain housing and welfare departments.
For investors, the advantage would be having access to new properties. In crowded urban environments, this could give investors the opportunity to create housing in otherwise impossible locations. If the government further incentivized creating affordable housing, investors could have the chance for helpful tax breaks that would save them money. In areas where the government has sold unused buildings, investors have incorporated these buildings into larger developments, providing people with housing, daycares, and more.
Of course the biggest benefit would be for those who need affordable housing. Many empty or partially empty government buildings are located in urban environments. Often, lower income residents who perform essential jobs in these areas find it impossible to afford a home in the area. Turning government buildings into low cost housing could help many lower class Americans pay for living expenses and find stable housing.
The Challenges of Repurposing Public Buildings
Botting's proposal definitely has a lot of advantages, but actually implementing it could take a bit more work. Some of the empty government buildings are unused because they are damaged or uninhabitable. For these, it could take a fair amount of effort to actually turn the building into something livable again. Investors would need to carefully look at ways of reusing and repurposing these buildings if they want to create financially sound plans.
Of course another challenge may be bureaucracy itself. Repurposing public land as housing could be difficult in an environment where many politicians are too busy handling crises to think ahead for ways of helping their constituents in the long term. In most cases, selling or repurposing public buildings would require devoted, coordinated efforts from multiple departments and branches of the government. For this to be worth the effort, many developers, individual citizens, and affordable housing advocates would need to bring attention to the idea.
With the right real estate expertise and interest from relevant government agencies, it could be possible to provide affordable housing to many people in the United States. This could take pressure off lower income residents while providing financial gain for the government. Actually turning thousands of government buildings into housing is probably still many years in the future, but it could one day help solve the housing crisis.
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