Empty Offices to Become Affordable Housing
New York City is one of the world's most populous and most popular cities. There isn't a whole lot of space available for anything, which is why people build up. They won't construct wide; they will instead construct tall. After the COVID lock-downs last year closed so many thousands of businesses that never opened back up, the city was left with a surplus of commercial space. Though through all the business closures and the way that the pandemic smacked New York City, the city still grew by about 400 thousand people over the course of a year. They have to live somewhere, of course, which is why the city is now proposing that empty commercial space is transformed into affordable housing for the neediest people in the city.
This move in NYC is coming off the back of a federal bill passed by Congress just last month: The Revitalizing Downtowns Act. In essence, this is the federal government making it financially rewarding for cities to revitalize their downtown areas with housing and businesses by offering them a 20% tax incentive. Another way to think of this is a kickback. A developer funds this project and gets to do it a lot cheaper in NYC than in another city or state, which can increase their profit margin drastically. It's this sort of incentive that will lead developers to risk their investment for such revitalization projects.
New York was hit harder by COVID than most other places in the world. Nearly 80% of their businesses just vanished. Not to mention that hundreds were chased out in fear due to the Antifa and BLM riots that were legally allowed to run roughshod through the streets, as windows were knocked out, fires were set, and store owners were attacked, all with the full backing of law enforcement. It's really scary to think about, but that's precisely what happened.
The city is hoping that the dust has settled on a very tumultuous year and that they can get the ball rolling again on a project like this. They want to transform old office space into low-income housing, and they want to get it done quickly.
Most Initiatives Fizzle Out
There are a few initiatives like this around every year. The truth is that most of them fizzle out. A few million dollars will exchange hands, permits will be filed for, and news will break. But when it's time to actually get going on the project, we end up with a "bridge to nowhere" situation. What typically happens is that some property is claimed, some initial demolition is completed, and then nothing else happens. A property ends up sitting there vacant for a few years, until it becomes some Mexican restaurant or some Walmart. It's sad but it's true; these affordable housing initiatives are constantly proposed but rarely seen to fruition.
The thing New York City has going for it is few options in terms of housing. When these projects are proposed elsewhere, they're given the green light in places that have other areas for housing and also places with a lot fewer people. There are 8.5 million people in New York City, and so that is very hard to ignore if people want houses. Plus, there are already so many businesses in NYC and so much commercial space that the city actually needs housing a lot more than places for people to work.
New York does this sort of thing a lot anyway, which is another thing working in its favor. It's not a very big city at all. The bulk of living in NYC is already in stacked apartments and other complexes. When this sort of thing is tried elsewhere, it has a habit of turning into residential row homes or something else other than the proposed transformation projects. Though for the city in particular, it makes a lot of sense that they would essentially refurbish old office spaces into new houses. So the odds are pretty good that this is a project that will happen in the city.
As far as it being actually low-income, we will all just have to wait and see how serious the city is about that. Although NYC will actually follow through on turning some of its properties into housing, they have a habit of going to ritzy, trendy upper-class demographics and not to poorer people. So, everyone will have to cross their fingers that the city will actually do something for their poorest residents for a change.
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