Council member wants to take up office-to-resi conversions debate

With various state-level proposals on the table, a City Council member wants to take the issue of office-to-housing conversions back to City Hall.

Brooklyn Council member Justin Brannan plans to introduce a bill on Thursday that would create a task force to study the feasibility of converting vacant office space into affordable housing. Real estate groups, along with state officials, have voiced support for such an idea, but have disagreed over the best way of implementing it.

Gov. Andrew Cuomo included a proposal in his executive budget that would override the city’s zoning rules to allow for hotel and office conversions that set aside 25 percent of apartments as affordable. Housing groups have panned that proposal for incentivizing more market-rate than affordable housing. The Senate has put forth a different measure that would permit the state to purchase distressed hotels and office buildings and convert them into housing exclusively for low-income and homeless New Yorkers.

Brannan, who also floated the idea of conversions last year, said the issue should be discussed at the city level to determine the specific challenges of moving forward with a plan.

“I think this falls somewhere between, ‘This is a great idea but it would never work,’ and a panacea,” he said. He noted that the focus would be office conversions, in anticipation of demand returning for hotels once tourism picks back up.

Other cities, including Washington, D.C., have explored ways to incentivize commercial conversions. In August 2019, a task force concluded that there were opportunities in D.C. but that such conversions were “not the most efficient way to address the city’s pressing housing needs.” It recommended offering subsidies and zoning incentives instead.

Conversions of older office buildings are already permitted in certain parts of New York City. The state also previously employed tax breaks to encourage office-to-residential changes in use, including the 421g program, which helped fuel the transformation of commercial buildings in Lower Manhattan in the 1990s. None of the state proposals under consideration include tax incentives.

Mayor Bill de Blasio has criticized the governor’s plan, calling it a giveaway to the real estate industry. Several mayoral hopefuls have backed the idea of hotel and office conversions in general. During a forum last week, Andrew Yang projected that he could build roughly 5,000 housing units by investing $250 million in such projects.

Brannan’s proposed task force would be headed by the commissioner of the Department of Housing Preservation and Development, and would include the head of the Department of Buildings, the City Council Speaker and Public Advocate. The group would be required to report its recommendations and findings within 270 days of the bill’s passage.